U.S. SECURITIES AND EXCHANGE COMMISSION 
                          Washington, D.C. 20549 
 
                               Form 10-KSB 
 
(Mark One) 
[ X ]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
        SECURITIES EXCHANGE ACT OF 1934(FEE REQUIRED)
 
For the fiscal year ended    September 30, 1997 
                             ------------------
[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF 
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)	 
 
For the transition period  _____________   to _____________ 
 
Commission file number:     0-16657 
                            --------

                     FIRST GEORGIA HOLDING, INC. 
                   -------------------------------
                   (Name of Small Business Issuer) 
 
 
Georgia                                             58-1781773 
-------------------------------------------------------------- 
(State or other jurisdiction                    (IRS Employer
of incorporation or organization)                identification number)
 
 
               1703 Gloucester Street, Brunswick, GA 31521 
               -------------------------------------------
                (Address of principal executive offices) 
 
Registrant's telephone number, including area code:		(912) 267-7283 
Securities registered pursuant to Section 12(b) of the Act:		None 
Securities registered pursuant to Section 12(g) of the Act:	
	Common Stock, par value $1.00 
 
Check whether the issuer (1) has filed all reports required to be filed by 
section 12 or 15(d) of the Exchange Act of 1934 during the past 12 months (or 
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 60 days.		
Yes [ X ]		No [   ] 
 
Check if there is no disclosure of delinquent filers in response to Item 405 of 
Regulation S-B contained in this form, and no disclosure will be contained, to 
the best of registrant's knowledge, in definitive proxy or information statement
incorporated by reference in Part III of this Form 10-KSB or any amendment to 
this Form 10-K.  [ X ] 
 
State issuer's revenues for its most recent fiscal year		$14,402,614 
 
State the aggregate market value of the voting stock held by non-affiliates of 
the registrant as of December 1, 1997: 
3,052,319 Shares of Common Stock, $1.00 par value -- $25,563,172 based 
----------------------------------------------------------------------
upon approximate market value of $8.375 per share at December 1, 1997. 
---------------------------------------------------------------------- 

State the number of shares outstanding of each of the issuer's classes of 
common stock, as of December 1, 1997:	 

Common Stock, $1.00 par value --3,052,319 shares 
------------------------------------------------ 

DOCUMENTS INCORPORATED BY REFERENCE 
 
Portions of the Company's Proxy Statement (the "Proxy Statement") for the 
Annual Meeting of Shareholders scheduled to be held January 21, 1998 are 
incorporated by reference into Part I and Part III. 
 
Portions of the Company's Annual Report (the "Annual Report") to 
Shareholders for the year ended September 30, 1997 are incorporated by 
reference into Part I, Part II and Part III. 
 
<PAGE> 
 
FIRST GEORGIA HOLDING, INC. 
 
FORM 10-KSB 
 
INDEX 
 
Part I								      	
	                                                                       PAGE 
 
	Item 1.	Business  . . . . . . . . . . . . . . . . . . . . . . . .  . . . 3 
	Item 2.	Description of Properties . . . . . . . . . . .. . . . . . . .  38 
	Item 3.	Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . .  39 
	Item 4.	Submission of Matters to a Vote of  
			Security Holders. .. . . . . . . . . . . . . . . . . . . . . . . . .  39 
 
Part II 
 
	Item 5.	Market for Common Equity and Related  
			Stockholder Matters . . . . . . . . . . . . . . . . ..  . . . . . . . 39 
	Item 6.	Management's Discussion and Analysis or Plan . .. . . . . . . . 39 
	Item 7.	Financial Statements . . . . . . . . . . . . . . . . . . . . .. 39 
	Item 8.	Changes in and Disagreements with Accountants 
			on Accounting and Financial Disclosure   . . . . . . . . . . . . . .  39 
 
Part III	 
 
	Item 9.	Directors, Executive Officers, Promoters and  
			Control Persons;  Compliance with  
			Section 16(a) of the Exchange Act . . . . .. . . . . . . . . . . . . .40 
		  	  
	Item 10.	Executive Compensation . . . . . . . .. . . . .. . . . . . . . 40 
	Item 11.	Security Ownership of Certain  
			  Beneficial Owners and Management . .. . . . . . . . . . . . . . . . 40 
	Item 12.	Certain Relationships and Related 
			  Transactions . . . . . . . . . . . . . . . . . . . . .. . . . . . . 40 
 
	Item 13.	Exhibits and Reports on Form 8-K .. . . .. . . . . . . . . . . 40 
	 
	Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41 
	Exhibit Index . . . . . . . . . . . . . . . .  . . . . . . . . . . . . .43 
 
<PAGE>	 


PART I 
 
Item 1.  DESCRIPTION OF BUSINESS 
 
                      Business of the Company 
                       ----------------------- 
	First Georgia Holding, Inc. (the Company), was incorporated as a 
Georgia corporation on December 16, 1987, for the purpose of acquiring all of 
the issued and outstanding shares of First Georgia Bank, F.S.B. (formerly 
known as First Georgia Savings Bank, F.S.B.)(the Bank) pursuant to a plan of 
reorganization.  The reorganization of the Bank into a holding company 
structure became effective on April 30, 1988, and the Bank is now a wholly-
owned subsidiary of the Company. 
 
	Besides its ownership of the Bank, the Company has not engaged in 
any material operations to date and management of the Company has no 
immediate plans to engage in any non-banking activities. 
 
	The holding company structure provides the Company with the ability 
to expand and diversify its financial services beyond those currently offered 
through the Bank.  As a holding company, the Company has greater flexibility 
than the Bank to diversify its business activities, through existing or newly-
formed subsidiaries, or through acquisition or merger.  Commencement of non-
banking operations by subsidiaries, if they are organized, will be contingent 
upon approval by the Board of Directors of the Company and by regulatory 
authorities as appropriate.  While the Company has no plans, arrangements, 
agreements or understandings regarding diversification through acquisition or 
development of other businesses, the Board of Directors believes that the 
holding company structure offers significant advantages. 
 
	The Company may, in the future, enter into a management agreement 
for the purpose of rendering certain services to the Bank.  No proposal and no 
terms of such agreement, however, have been considered as yet and it has not 
been decided that such an agreement will be made.  Certain restrictions on the 
total compensation under management and similar agreements are imposed by 
federal regulation and, under certain circumstances, regulatory approval may be 
required. 
 
	Except for the officers of the Bank who presently serve as officers of 
the Company, the Company does not have any employees. 
 
	The Company's executive office is located at 1703 Gloucester Street, 
Brunswick, Georgia 31520.  At the present time the Company does not have 
any plans to establish additional offices. 
 
                         Business of the Bank 
                         --------------------
	The Bank is a federal stock savings bank headquartered in Brunswick, 
Georgia.  It was chartered in 1983 and opened for business on January 31, 1984 
with approximately $8.6 million of acquired deposits. 
 
	The Bank's business consists primarily of residential and consumer 
lending and retail banking.  To a lesser extent the Bank engages in commercial 
real estate lending and construction lending. 

                                      3
<PAGE>
 
	The Bank's retail banking operation consists of attracting deposits and 
making commercial and consumer loans.  It attracts deposits by offering a wide 
array of banking services, including checking accounts, overdraft protection, 
various savings programs, IRAs, and access to the AVAIL network of 
automatic teller machines.  Similarly, the Bank offers a full range of 
commercial loans, including short-term loans for working capital purposes, 
seasonal loans, lines of credit, accounts receivable loans and inventory loans, 
as well as a full range of consumer loans, including automobile, boat, home 
improvement and other similar loans. 
 
	Commercial real estate and construction lending includes construction 
and permanent loans on multi-family apartment buildings, shopping centers, 
office buildings and other income producing properties located mainly in the 
Bank's primary market area. 
 
	The principal executive offices of the Bank are located at 1703 
Gloucester Street, Brunswick, Georgia 31520 and the telephone number at that 
address is (912) 267-7283. 
 
 
Summary of Financial Results 
---------------------------- 
	First Georgia Holding, Inc. reported net income of $1,593,665 in 
1997, an increase of $832,299.  The lower earnings in 1996 were due primarily 
to a SAIF special assessment paid last year.   Net interest income after 
provision for loan losses increased a total of $338,968.  Other income increased
by a total of $638,822, and other expenses, exclusive of the SAIF assessment,
increased $399,120.  
 
Return on Average Assets and Equity 
----------------------------------- 
	Return on average assets for the year ended September 30, 1997 was 
1.04% as compared to 0.55% for the year ended September 30, 1996.  Return 
on average equity for the year ended September 30, 1997 was 12.55% 
compared to 6.52% for the year ended September 30, 1996.  These increases 
were due primarily to an increase in loan volumes and the gain on sale of our 
Hinesville branch. 

                                     4
<PAGE>

SELECTED STATISTICAL INFORMATION 
 
The following tables set forth certain statistical information and should be 
read in conjunction with the consolidated financial statements of the Company 
and Bank. 
 
 
                                                 Years  Ended September 30, 
                                                 -------------------------
                                                   1997            1996 
                                                 -------------------------
Return on Average Assets                            1.04%           0.55% 
 
Return on Average Equity                           12.55%           6.52% 
 
Average Equity to Average Assets                    8.28%           8.39% 
 
Dividend Payout Ratio                              10.22%          17.42% 
 
 
 
                            AVERAGE BALANCE SHEETS 
 
                                                             September 30, 
                                                      -------------------------
                                                          1997           1996 
                                                      -------------------------
 
Cash                                                  $  3,524,884    2,711,372
Interest-bearing deposits in other banks                 3,618,065    1,835,076
Investment securities                                   10,585,567    9,514,086
Loans receivable, net                                  127,953,987  117,481,323
Real estate owned                                          249,500       88,293
Federal Home Loan Bank stock                             1,160,300    1,575,700 
Premises and equipment, net                              3,190,698    3,309,094 
Intangible assets, net                                   1,104,133    1,325,933 
Accrued interest receivable                                916,855      855,218 
Other assets                                             1,089,037      601,993 
                                                       -----------  -----------
                                                      $153,393,026  139,298,088 
                                                       ===========  ===========
 
LIABILITIES AND STOCKHOLDERS' EQUITY 
 
Liabilities: 
    Deposits                                          $124,790,096  112,422,778 
    Federal Home Loan Bank advances                     12,491,666   12,822,012 
    Other borrowed money	                                   88,333      160,493 
    Accrued expenses and other liabilities               3,319,512    2,209,824 
                                                       -----------  -----------
                                                       140,689,607  127,615,107 
                                                       -----------  ----------- 
Stockholders' equity                                    12,703,419   11,682,981 
                                                       -----------  -----------
    Total liabilities and stockholders' equity        $153,393,026  139,298,088 
                                                       ===========  ===========
 
                                            5
 <PAGE>
 
                         INTEREST EARNINGS AND YIELD 
                         ---------------------------
 
 
 
                                             Years  Ended September 30,
                                             --------------------------
                                                 1997          1996 
                                             --------------------------
Interest earned on: 
 
Loans                                       $ 11,975,499    10,986,155 
 
Investment securities                            610,423       699,732 
 
Interest-bearing deposits in other banks         198,010       108,029 
                                             --------------------------
    Total interest income                     12,783,932    11,793,916 
                                             --------------------------

Interest paid on: 
 
Deposits                                       6,175,696     5,682,330 
 
Federal Home Loan Bank advances and other 
borrowings                                       763,159       867,052 
                                              -------------------------
    Total Interest expense                     6,938,855     6,549,382 
                                              -------------------------
 
NET INTEREST EARNED                         $  5,845,077     5,244,534 
                                              =========================
 
Average percentage earned on: 
 
Loans                                              9.36%          9.35% 
 
Taxable investment securities                      5.76%          7.35% 
 
Interest-bearing deposits in other banks           5.47%          5.89% 

    Total interest earning assets                  8.99%          9.15% 
 
 
 
Average percentage paid on: 
 
Deposits                                          4.95%           5.05% 
 
Federal Home Loan Bank advances and other
borrowings                                        6.07%           6.68% 
 
  Total interest bearing liabilities              5.05%           5.23% 
 

NET YIELD ON INTEREST EARNING ASSETS              4.11%           4.07% 
                                               =========================
 
"Management's Discussion and Analysis of Financial Condition and Results of 
operations - Yields Earned and Rates Paid" in the Company's Annual Report is 
incorporated by reference herein. 

                                        6 
<PAGE>
 
                             Lending Activities 
                             ------------------
General 
------- 
	Thrift institutions are permitted to invest up to 400% of their capital in 
commercial real estate loans.  Thrift institutions are also permitted to invest 
up to 10% of their assets in secured or unsecured loans for commercial, 
corporate, business or agricultural purposes.  Institutions may also invest up 
to 35% of their assets in consumer loans and up to 10% of their assets in 
tangible personal property in order to engage in personal property leasing. 
	 
Loan Portfolio Analysis 
----------------------- 
	The Bank's net loan portfolio totaled approximately $137,865,000 at 
September 30, 1997, representing approximately 86% of its total assets.  On 
that date, approximately 74% of its total outstanding loans were secured by 
mortgages on residential property.  The balance of the Bank's outstanding loans 
at that date consisted of commercial real estate loans, construction loans, 
consumer loans and commercial loans. 
 
	The Bank extends credit to customers throughout its market area with 
a concentration in real estate mortgage loans.  The real estate loan portfolio 
is substantially secured by properties located throughout Southeast Georgia.  
Although the Bank has a diversified loan portfolio, a substantial portion of its
borrowers' ability to repay such loans is dependent upon the economy in the 
Bank's market area. 
 
	Set forth on the next page is selected data relating to the composition 
of the Bank's loan portfolio by type of loan and type of security on the dates 
indicated. 
 
                                           7
<PAGE>
 
 
                             LOAN ANALYSIS 
                             -------------

                                                       September 30, 
                                        ----------------------------------------
                                                1997                 1996 
                                        ----------------------------------------
Loans by Type of Security:                             (In Thousands) 
 
Real Estate Loans: 
  Residential: 
    One-four family: 
      Conventional                     $  77,272   56.05%      66,695    54.48%

      FHA-VA                                 253    0.18%         259     0.21%

      Multi-family conventional              462    0.33%       6,205     5.07% 
                                        ----------------------------------------
         Total residential                77,987   56.56%      73,159    59.75% 
 
Commercial property                       24,431   17.72%      21,283    17.38% 
 
Land development and other                16,997   12.33%      11,654     9.52% 
 
Less loans held for sale                     -      0.00%        -        0.00% 
                                        ----------------------------------------
    Total real estate loans              119,415   86.61%     106,096    86.66% 
 
Non-real estate loans:                    19,522   14.16%      17,340    14.16% 
 
Unearned interest income                     (73)  -0.05%         (32)   -0.03% 
 
Allowances for loan losses                (1,012)  -0.73%        (955)   -0.78% 
 
Deferred loan (fees) cost                     13    0.01%         (17)   -0.01% 
                                        ----------------------------------------
   Total                               $ 137,865  100.00%     122,432   100.00% 
                                        ========================================
 
                                            8
 <PAGE>
 
                                 LOAN ANALYSIS (Continued) 
                                 ------------------------
 
                                                      September 30, 
                                         ---------------------------------------
                                               1997                  1996 
                                         ---------------------------------------
Loans by Type of Loan:                                (In Thousands) 
 
Real Estate Loans: 
 
   Loans on existing property: 

     Fixed rate                          $  21,713    15.75%    30,967   25.29% 
 
     One year ARM and variable rate(1)      79,137    57.40%    62,581   51.11% 
  
     Three year ARM                          1,568     1.13%     1,130    0.92% 
 
Construction loans                          16,997    12.33%    11,418    9.33% 
 
Less loans held for sale                      -        0.00%      -       0.00% 
                                           -------------------------------------
  Total real estate loans                  119,415    86.61%   106,096   86.66% 
 
Consumer loans                              10,384     7.53%     9,448    7.72% 
 
Commercial and other loans                   9,138     6.63%     7,892    6.45% 
 
Unearned interest income                       (73)   -0.05%       (32)  -0.03% 
 
Allowance for loan losses                   (1,012)   -0.73%      (955)  -0.78% 
 
Deferred loan (fees) cost                       13     0.01%       (17)  -0.01% 
                                           -------------------------------------
Total                                    $ 137,865   100.00%   122,432  100.00% 
                                           =====================================
(1) An ARM is an adjustable rate mortgage 

                                                  9
 <PAGE>

                                 LOAN MATURITY SCHEDULE 
 
	The following table sets forth certain information at September 30, 
1997 regarding the dollar amounts of loans maturing in the Bank's portfolio 
based on their contractual terms to maturity.  Demand loans, loans having no 
stated schedule of repayments and no stated maturity , and overdrafts, are 
reported as due in one year or less.  This table does not consider the repricing
of loans to be maturities.  Interest rate sensitivity is incorprated herein by 
reference from the Management's Discussion and Analysis of Financial 
Condition and Results of Operations - Asset/Liability Management in the 
Annual Report to Shareholders for 1997. 
 
 
Maturities during 
year ended            Real Estate    Real Estate               Commercial
September 30,          Mortgage     Construction    Consumer   and other   Total
--------------------------------------------------------------------------------
                                          (In Thousands) 
 
  1998             $    18,072         15,022         4,444      4,954   42,492 
 
  1999                   8,620          1,205         2,928      1,437   14,190 
  
  2000                   7,436            770         1,586        992   10,784 
 
  2001                   3,310              0           844        655    4,809 
 
2002-2006                5,683              0           527        815    7,025 

2007-2011               13,619              0            29        285   13,933 
 
After 2011              45,678              0            26          0   45,704 
                    ------------------------------------------------------------
Total              $   102,418         16,997        10,384      9,138  138,937 
                    ============================================================
 
                                       Less: Unearned interest income       (73)
 
                                             Allowance for loan losses   (1,012)
 
                                             Deferred loan fees              13 
                                                                        --------
                                                                      $ 137,865
                                                                        ========
 
                                    10
<PAGE>
 
	The next table sets forth the dollar amount of all loans due more than 
one year after September 30, 1997 which have predetermined interest rates and 
which have floating or adjustable interest rates. 

                        Real estate  Real estate             Commercial
                         mortgage    contruction   Consumer   and other    Total
                        --------------------------------------------------------
                                            (In Thousands) 
 
Predetermined rates   $   19,126           12        5,824       1,840    26,802
 
Floating or 
adjustable rates          65,220        1,963          116       2,344    69,643
                         -------------------------------------------------------
                      $   84,346        1,975        5,940       4,184    96,445
                         =======================================================
 
                                              11
<PAGE>

Lending Policies 
---------------- 
	Federal regulations limit the amount which federally chartered thrift 
institutions may lend in relation to the appraised value of the real estate 
securing the loan, as determined by an appraisal at the time of loan 
origination.  Those regulations permit a maximum loan-to-value ratio of 100% for
real estate loans.  The Bank's lending policies generally limit the maximum 
loan-to-value ratio on residential mortgage loans to 95% of the lesser of the 
appraised value or purchase price. Multi-family residential and commercial real 
estate loans and unimproved real estate loans generally do not exceed 90% of 
value.  The loan-to-value ratio, maturity and other provisions of the loans made
by the Bank generally reflect the policy of making less than the maximum loan 
permissible under applicable regulations in accordance with sound lending 
practices, market conditions and underwriting standards established by the 
Bank. 
 
	In an effort to keep the yields on its loan portfolio and investments 
more interest rate sensitive, the Bank has implemented a number of measures 
including: (a) generally originating long-term fixed rate mortgage loans for 
brokerage to other financial institutions; (b) emphasizing origination of ARMs 
on residential and commercial properties when market conditions permit; (c) 
originating construction loans secured by residential properties generally for a
12-month period at interest rates determined by reference to the Bank's prime 
rate; and (d) originating consumer and commercial loans having either 
adjustable rates or relatively short maturities. 
 
Single Family Residential Loans 
------------------------------- 
	One of the lending activities of the Bank has been the origination of 
single family residential loans through its mortgage lending operation.  
Through an arrangement with another financial institution, the Bank brokers 
substantially all of its fixed rate single family residential loans.  This 
allows the Bank to offer a broader base of financing alternatives than would be 
possible if the Bank were structuring all of its loans to sell to the Federal 
Home Loan Mortgage Corporation (FHLMC) or the Federal National Mortgage 
Association (FNMA).   
 
	Federally chartered thrift institutions are authorized to make home 
loans on which the interest rate, loan balance or maturity may be adjusted, 
provided that the adjustments are tied to specified indices.  The rate 
adjustments are determined by reference to cost of funds and Treasury 
securities indices and are limited generally to 1.5-2.0% per adjustment period 
and 5-6% over the life of the loan. 
 
Commercial Real Estate Loans 
-----------------------------
	Current regulations permit federal institutions to invest up to 400% of 
their capital in commercial real estate loans.  At September 30, 1997, the Bank 
had 201% of its capital invested in commercial real estate loans.  The 
commercial real estate loans originated by the Bank are primarily secured by 
multi-family apartment buildings, shopping centers, office buildings and other 
income-producing properties.  The interest rates on commercial real estate 
loans presently offered by the Bank generally adjust every one to three years.  
The rate is generally determined by reference to money center banks' prime 
rates.  The Bank's commercial real estate loans have various terms, with the 
payments based on a 15 to 25 year amortization schedule, and have balloon 
maturities of 5 to 7 years.  The Bank generally requires that such loans have a 
minimum debt service coverage of 1.15 and a loan-to-value ratio of not more 
than 90%. 
 
	Commercial real estate lending entails significant additional risks 
compared to residential lending.  Commercial real estate loans typically involve
large loan balances to single borrowers or groups of related borrowers.  The 
payment experience of such loans typically depends upon the successful 
operation of the real estate project.  These risks can be significantly affected
by supply and demand conditions in the market for office and retail space and 
for apartments, and as such may be subject, to a greater extent than residential
real estate loans, to adverse conditions in the economy.  In dealing with these 
risk factors, the Bank generally limits itself to a real estate market or to 

                                       12
<PAGE>

borrowers with which it is familiar and sells a portion of its commercial real 
estate loans.  The Bank concentrates on originating commercial real estate loans
secured by properties generally located within its primary market area, 
although the Bank will continue, on a limited basis, to originate commercial 
real estate loans secured by properties located in other parts of Georgia and in
other states. 
 
Construction Loans 
-------------------
	The Bank originates construction loans on single family residences.  
Such construction loans generally have a term of 12 months or less.  The 
interest rates charged by the Bank on construction loans are determined by 
reference to the prime rate charged by money center banks and vary depending 
upon the type of property, the loan amount and the credit worthiness of the 
borrower.  The Bank generally requires personal guarantees of payment from 
the principals of the borrowing entities for the full amount of the loan, and it
is the policy of the Bank to enforce guarantees in the event of non-payment of 
the loan. 
 
	The Bank also originates construction loans on multi-family and 
commercial real estate.  The interest rates on such loans presently offered by 
the Bank are also determined by reference to the prime rate charged by money 
center banks.  Multi-family and commercial real estate construction financing 
generally exposes the lender to a greater risk of loss than long-term financing 
on improved, occupied real estate, due in part to the fact that the loans are 
underwritten on projected rather than historical income and rental results.  The
Bank's risk of loss on such loans depends largely upon the accuracy of the 
initial appraisal of the property's value at completion of construction and the 
estimated cost (including interest) of completion.  If either estimate proves to
have been inadequate and the borrower is unable to provide additional funds 
pursuant to his or her guarantee, the Bank either may be required to advance 
funds beyond the amount originally committed to permit completion of the 
development or be confronted at the maturity of the loan with a project whose 
value is insufficient to assure full repayment. 
 
	The Bank's underwriting criteria are designed to evaluate and to 
minimize the risks of each commercial real estate construction loan.  The Bank 
considers evidence of the financial stability and reputation of both the 
borrower and the contractor, the amount of the borrower's cash equity in the 
project, independent evaluation and review of the building costs, local market 
conditions, pre-construction sales and leasing information based upon 
evaluation of similar projects, the use of independent engineers to examine 
plans and monitor construction and the borrower's cash flow projections upon 
completion.  The Bank may require a performance bond in the amount of the 
construction contract based on management's evaluation of the project and the 
financial strength of the contractor and also requires personal guaranties of 
payment by the principals of any borrowing entity.  At September 30, 1997, 
approximately $16,997,000 of the Bank's loan portfolio consisted of 
construction loans. 
 
 
Consumer Loans 
--------------
	Current regulations permit federal savings institutions to invest up to 
35% of their assets in consumer loans.  The Bank currently offers a wide 
variety of consumer loans including secured and unsecured personal loans 
(such as home improvement loans and loans secured by savings accounts), 
automobile, boat and other loans.  Total consumer loans amounted to 
approximately $10,386,000 at September 30, 1997. 
 
	The Bank markets consumer loans in order to provide a full range of 
retail banking services to its customers and because of the shorter term and 
normally higher interest rates on such loans.  The Bank's underwriting 
standards for consumer loans include a determination of the applicant's 
payment history on other debts and an assessment of his or her ability to meet 
existing obligations and to make payments on the proposed loan.  Loan-to-
value, cash equity and debt service-to-income ratios are also generally 
considered. Risks associated with consumer loans include, but are not limited 

                                13
<PAGE>

to, fraud, deteriorated or non-existing collateral, general economic downturn, 
and customer financial problems. 
 
Commercial Loans 
----------------
	Current regulations authorize federal thrift institutions to make 
secured and unsecured loans for commercial, corporate, business and 
agricultural purposes, including issuing letters of credit.  The aggregate 
amount of such loans outstanding generally may not exceed 10% of the 
institution's assets. 
 
	The Bank makes commercial loans primarily on a secured basis.  
Substantially all of such loans to date have interest rates which adjust with 
changes in the prime rate charged by money center banks.  The Bank's 
commercial loans primarily consist of short-term loans for working capital 
purposes, seasonal loans, lines of credit, accounts receivable loans and 
inventory loans.  The Bank customarily requires personal guaranties of 
payment by the principals of any borrowing entity and reviews the financial 
statements and income tax returns of the guarantors generally on an annual 
basis.  At September 30, 1997, the Bank had approximately $8,214,000 
outstanding in commercial loans. Risks associated with these loans can be 
significant.  Risks include, but are not limited to, fraud, bankruptcy, 
deteriorated or non-existing collateral, general economic downturn, and 
changes in interest rates. 
 
Loan Solicitation and Processing 
--------------------------------
	The Bank actively solicits mortgage loan applications from existing 
customers, walk-ins, referrals, builders and real estate brokers.  Commercial 
real estate loan applications are also obtained through direct solicitation. 
 
	Detailed loan applications are obtained to determine the borrower's 
ability to repay, and the more significant items on these applications are 
verified through the use of credit reports, financial statements and 
confirmations.  After analysis of the loan applications and property or 
collateral involved, including an appraisal of the property by independent 
appraisers approved by the Bank's management, the lending decision is made in 
accordance with the underwriting guidelines of the Bank.  With respect to 
commercial loans, the Bank also reviews the capital adequacy of the business, 
the ability of the borrower to repay the loan and honor its other obligations, 
and general economic and industry conditions.  All applications for loans 
greater than $250,000 but less than $500,000 require the approval of the Bank's 
Loan Committee, which consists of the Bank's president and three outside 
directors.  All loan applications in excess of $500,000 must be approved by the 
full Board of Directors. 
 
	Loan applicants are promptly notified of the decision of the Bank, 
together with the terms and conditions of the decision.  In this regard, the 
Bank seeks to handle loan processing and origination faster than its 
competition.  If approved, these terms and conditions include the amount of the 
loan, interest rate basis, amortization term, a brief description of the real 
estate to be mortgaged to the Bank, notification that insurance coverage must be
maintained to protect the Bank's interest and any other special conditions. 
 
	It is the Bank's policy to obtain a title insurance policy insuring that 
the Bank has a valid first lien on the mortgaged real estate and that the 
property is free of encumbrances.  Borrowers are also to obtain paid hazard 
insurance policies prior to closing and, when the property is in a flood plain 
as designated by the Department of Housing and Urban Development, paid flood 
insurance policies.  It is the Bank's policy to require flood insurance for the 
full insurable value of the improvements for any such loan located in a 
designated flood hazard area.  In certain coastal areas, however, there are 
limits on the amount of insurance available.  Substantially all borrowers are 
also required to advance funds on a monthly basis, together with each payment of
principal and interest, to a mortgage escrow account from which the Bank makes 
disbursements for items such as real estate taxes, hazard insurance premiums 

                                      14
<PAGE>

and private mortgage insurance premiums.  See "Lending Activities - General" 
regarding the Bank's recent efforts to ensure compliance with federal 
regulations pertaining to flood insurance, Truth-In-Lending, and the 
Community Reinvestment Act. 
 
Loan Originations, Sales and Purchases 
-------------------------------------- 
	  It is a policy of the Bank not to originate for its own portfolio any 
long term fixed rate mortgage loans.  The Bank instead originates long term 
fixed rate mortgages to be brokered out to various mortgage lenders.  The Bank 
may sell its commercial real estate and construction loans, generally retaining 
a percentage of the loans in its own portfolio.  Loan sales provide additional 
funds for lending, generate income for the Bank and generally reduce exposure 
to interest rate risk.  The Bank generally continues to collect payments on the 
loans and otherwise to service the loans sold.  The Bank retains a portion of 
the interest paid by the borrower on these loans as consideration for its 
servicing loans sold to others.  At September 30, 1997, the Bank was servicing
loans for others of approximately $2,308,000. 
 
	The Bank has purchased a number of loans in the past, and intends to 
consider future purchases of residential mortgage loans as market conditions 
warrant.  The Bank has also sold loans as discussed above and, similarly, 
intends to consider future sales as conditions warrant. 
 
	It is the current intention of management to continue offering 
residential fixed rate mortgage loans through the Bank's brokerage lending 
arrangement and to continue offering adjustable rate instruments to be held in 
the Bank's portfolio. 
 
Loan Commitments 
----------------
	Upon loan approval, short-term commitments of 45 days are issued to 
the applicant and in most cases provide for the loan to be closed at the 
prevailing rate of interest as of the date of approval.  At September 30, 1997 
the Bank had loan commitments outstanding of approximately $243,000 excluding 
the undisbursed portion of loans in process. 
 
Loan Origination Fees 
--------------------- 
	The Bank defers and amortizes loan origination fees, net of certain 
direct origination costs incurred, and recognizes such fees over the life of the
related loan as a yield adjustment. 
 
	The Bank also receives other fees and charges relating to existing 
loans along with late charges and fees collected in connection with a change in 
borrower or other loan modifications. 
 
Delinquencies and Asset Classifications 
--------------------------------------- 
	The Bank's collection procedures provide that when a loan is 15 days 
past due, the borrower will be contacted by mail and payment requested.  If the 
delinquency continues, subsequent efforts will be made to contact the 
delinquent borrower.  In certain instances, the Bank may modify the loan or 
grant a limited moratorium on loan payments to enable the borrower to 
reorganize his or her financial affairs.  If the loan continues in a delinquent 
status for 90 days or more, the Bank generally will initiate foreclosure 
proceedings, but there is no requirement that the Bank defer foreclosure 
proceedings or other enforcement action.  Any property acquired as the result of
foreclosure is classified as real estate acquired in settlement of loans until 
such time as it is sold or otherwise disposed of by the Bank to recover its 
investment. 
 
	As a measure of the soundness of a thrift institution's loans, federal 
regulatory authorities have developed the concept of asset classification and 
have established four categories of problem assets:  "Special Mention," 
"Substandard," "Doubtful" and "Loss".  Assets designated Special Mention do 
not require that a bank take any specific action.  For assets classified 
Substandard or Doubtful, a bank's examiner is authorized to direct the 
establishment of a general allowance for loan losses based on the assets 
classified and the overall quality of the bank's asset portfolio.  

                                    15
<PAGE>

This valuation allowance must be established in accordance with generally 
accepted accounting principles.  For assets or portions of assets classified 
Loss, a bank is required either to establish specific allowances of 100% of the 
amount so classified, or to charge off such amount.  These specific allowances 
or charge offs must also be established in accordance with generally accepted 
accounting principles. 
 
	The Bank is responsible for determining the valuation and classification of
its assets, subject to review by regulatory authorities.  Portions 
of an asset may be classified in more than one category. 
 
	An asset will be designated Special Mention if it does not justify a 
classification of Substandard but does constitute undue and unwarranted credit 
risk to the Bank.  An asset will be classified Substandard if it is determined 
to involve a distinct possibility that the Bank may sustain some loss if 
deficiencies associated with the loan, such as inadequate documentation, are not
corrected.  An asset will be classified as Doubtful if full collection is highly
questionable or improbable.  An asset will be classified as Loss if it is
considered uncollectible, even if a partial recovery may be expected in the 
future. 
 
	The Bank closely monitors its classified loans and actively attempts to 
dispose of real estate acquired in settlement of loans.  Real estate acquired 
through foreclosure is appraised when acquired and is recorded at the lower of 
cost or fair market value. 
 
	At September 30, 1997, the following amounts of loans were classified 
as follows: 
 
Special Mention	        	$2,474,000 
Substandard			            1,959,000 
Doubtful			                   - 
Loss				                      -   
				                   ------------------ 
                     				$4,433,000 
                   				================== 
 
Nonaccrual, Past Due and Restructured Loans 
------------------------------------------- 
	The Bank has approximately $1,959,000 of loans in nonaccrual status 
at September 30, 1997.  The Bank had approximately $1,951,000 of loans in 
nonaccrual status at September 30, 1996.  The Bank has had no restructured 
loans.  ("Management's Discussion and Analysis of Financial Condition and 
Results of Operations - Provision for Loan Losses" in the Company's Annual 
Report is incorporated by reference herein.)  Had all nonaccrual loans at 
September 30, 1997 actually accrued interest for the full fiscal year, 
approximately $49,000 of additional interest income would have been added to 
fiscal 1997 earnings.   
 
	Accrual of interest is discontinued when either principal or interest 
become 90 days past due unless, in management's opinion, the loan is well 
secured and in the process of collection. 
 
Allowance for Loan Losses 
-------------------------  
	For a detailed analysis of the allowance for loan losses, Management's 
Discussion and Analysis of Financial Condition and Results of Operations - 
Provision for Loan Losses is incorporated by reference from the Annual Report 
to Shareholders herein. 
 
   The Company has allocated the allowance for possible loan losses according 
to the amount deemed to be reasonably necessary to provide for the possibility 
of losses being incurred within the categories of loans set forth in the table 
below.  This allocation is based on management's evaluation of the loan 
portfolio under current economic conditions, past  loan loss experience, 
adequacy and nature of collateral, and such factors which, in the judgment of 
management, deserve recognition in estimating loan losses.  Regulatory 

                                   16
<PAGE>

agencies, as an integral part of their examination process, periodically review 
the Company's allowances for possible losses on loans and real estate acquired 
through foreclosure and other nonperforming assets.  Such agencies may 
require the Company to make additions to the allowance based on their 
judgments about information available to them at the time of their examination.
Because the allocation is based on estimates and subjective judgment, it is not 
necessarily indicative of the specific amounts or loan categories in which 
charge-offs may occur. 
	 
	The allocation of the allowance for possible loan losses to the various 
loan categories and the ratio of each loan category to total loans outstanding 
at September 30, 1997 and 1996 are presented in the following table.  
 
 
                                  September 30, 1997       September 30, 1996
                             ---------------------------------------------------
                                        Percent of                Percent of
                                        loans in each             loans in each
(In Thousands)                          category to               category to
                             Amount     total loans     Amount    total loans
                             ---------------------------------------------------
Balance at the end of the 
year applicable to: 
 
 Commercial, financial, 
  and agricultural         $    150         6.58%           89         6.40% 

 Real estate-construction        35        12.23%           28         9.25% 

 Real estate-mortgage           300        73.72%          272        76.70% 
 
 Consumer                        40         7.47%           20         7.65% 
 
 Unallocated                    487          N/A           546          N/A    
                             ---------------------------------------------------
                           $  1,012       100.00%          955       100.00% 
                             ===================================================

Other 
------ 
	The Company has no foreign operations and, accordingly, there are no 
assets or liabilities attributed to foreign operations. 
 
	At September 30, 1997, the Company had no concentration of loans 
exceeding 10% of total loans to borrowers engaged in any single industry. 
 
 
Investment Activities 
---------------------
	The Bank is required under federal regulations to maintain a 
minimum amount of liquid assets and is also permitted to make certain other 
securities investments.  It is the intention of management to hold securities 
with short maturities in the Bank's investment portfolio in order to enable the 
Bank to match more closely the interest rate sensitivities of its assets and 
liabilities. All of the Bank's investments are subject to interest rate risk.  
Since some securities have fixed interest rates, as interest rates rise the
value of the securities falls and as rates decline the value increases.  In 
addition, mortgage-backed securities are subject to prepayment risk.  As rates 
fall, prepayments increase and the amount of the security earning the coupon 
rate declines.  

	Investment decisions are made by senior officers of the Bank.  The 
actions of the officers are within policies established by the Board of 
Directors.  At September 30, 1997 the investment portfolio totaled approximately
$9,634,000. 

                                     17
<PAGE>
 
	The following table sets forth the amortized cost, approximate fair 
value, and weighted average yield of the investment portfolio.  The weighted 
average yield with respect to maturities is also presented. 


                         INVESTMENT SECURITIES ANALYSIS 
 
 
 
 
                                                         Weighted
                                         Amortized       Average 
                                            Cost          Yield      Fair Value 
                                      ------------------------------------------
September 30, 1997: 
 
Investment securities: 
 
   U.S. Government agencies          $  1,500,000         3.80%       1,471,809
 
   Mortgage-backed securities 
    and SBA's                           7,314,453         6.93%       7,403,565 
 
   State and municipal bonds              570,000         4.12%         566,483 
 
   Corporate bonds                        250,000         8.50%         250,000 
                                      ------------------------------------------
                                     $  9,634,453         6.32%       9,691,857 
                                      ==========================================

                                                        Weighted          
                                        Amortized       Average
                                           Cost          Yield       Fair Value
                                       -----------------------------------------
September 30, 1996: 
 
Investment securities: 
 
   U.S. Government agencies          $  5,500,683        4.71%        5,423,659 
 
   Mortgage-backed securities 
    and SBA's                           3,704,854        7.62%        3,688,295 
 
   State and municipal bonds              870,000        4.12%          866,790 
 
   Corporate bonds                        250,000        8.50%          230,000 
                                       -----------------------------------------
                                     $ 10,325,537        5.80%       10,208,744 
                                       =========================================
 
 
	A summary of investment and mortgage-backed securities by 
maturities as of September 30, 1997 follows: 
 
                                                    Weighted 
                                     Amortized       Average  
                                        Cost          Yield         Fair Value 
                                  ----------------------------------------------
Investment securities: 

 Within 1 year                   $    1,600,000        3.78%        1,571,606 
 
 After 1 year through 5 years           480,611        6.02%          484,125 
 
 After 5 years through 10 years       1,102,271        7.18%        1,113,487 
 
 After 10 years                       6,451,571        6.83%        6,522,639 
                                   ---------------------------------------------
                                 $    9,634,453        6.32%        9,691,857 
                                   =============================================
 
                                        18
<PAGE>


                                 INTEREST DIFFERENTIAL 
 
	The following table describes the extent to which changes in volume of 
interest-earning assets and interest-bearing liabilities and changes in interest
rates have affected the Bank's interest income and expense during the periods 
indicated.  For each category of interest-earning asset and interest-bearing 
liability, information is provided on changes attributable to (a) change in 
volume (change in volume multiplied by old rate) and (b) change in rate 
(change in rate multiplied by old volume).  The net change attributable to the 
combined impact of volume and rate has been allocated to both components in 
proportion to the relationship of the absolute dollar amounts of the change in 
each. 
 
 
 
                                            Year Ended September 30, 1997 vs. 
                                             Year Ended September 30, 1996 
                                           -----------------------------------
                                               Increase (Decrease) due to 
                                           -----------------------------------
                                             Total         Rate       Volume 
 
Interest income: 
                                                      (In Thousands) 
 
 Loans                                    $   989            12         977 
 
 Investment securities                        (89)         (162)         73 
 
 Interest-bearing deposits in other banks      90            (8)         98 
                                           -----------------------------------
Total interest-earning assets                 990          (158)      1,148 
                                           -----------------------------------
Interest expense: 

 Deposits                                     493          (115)        608 
                                                                         
 Federal Home Loan Bank advances
  and other borrowings                       (104)          (78)        (26) 
                                           -----------------------------------
Total interest-bearing liabilities            389          (193)        582 
                                           ----------------------------------- 
Net interest income                       $   601            35         566 
                                           ===================================
 
                                  19
<PAGE>

                         INTEREST DIFFERENTIAL (Cont'd) 
 
 
 
                                            Year Ended September 30, 1997 vs. 
                                             Year Ended September 30, 1996 
                                           -----------------------------------
                                               Increase (Decrease) due to 
                                           -----------------------------------
                                             Total         Rate       Volume 
 
Interest income: 
                                                      (In Thousands) 
 
 Loans                                    $   114           (37)        151 
 
 Investment securities                        193           101          92 
 
 Interest-bearing deposits in other banks    (139)          (40)        (99) 
                                           -----------------------------------
Total interest-earning assets                 168            24         144 
                                           -----------------------------------
Interest expense: 

 Deposits                                     337           113         224 
                                                                         
 Federal Home Loan Bank advances
  and other borrowings                       (195)           19        (214) 
                                           -----------------------------------
Total interest-bearing liabilities            142           132          10 
                                           ----------------------------------- 
Net interest income                       $    26          (108)        134 
                                           ===================================
 
 
 
 
 
 
 
 
 
 
Retail Banking Activities and Sources of Funds 
------------------------------------------------- 
General 
-------
	The Bank's retail banking activities consist of attracting deposits and 
making consumer and commercial loans.  A principal objective of the Bank is 
to establish a total banking relationship, including a deposit relationship as 
well as a lending relationship, between the Bank and the customer. 
 
	Savings accounts and other types of deposits generated by the Bank's 
retail banking division are the primary source of the Bank's funds for use in 
lending and for other general business purposes.  In addition to savings 
accounts, the Bank derives funds from loan repayments, FHLB advances, other 
borrowings and operations.  Loan repayments are a relatively stable source of 
funds while deposit inflows and outflows vary widely and are influenced by 
prevailing interest rates and money market conditions.  Borrowings may be 
used on a short-term basis to compensate for reductions in normal sources of 
funds such as deposit inflows at less than projected levels and may be used on a
longer-term basis to support expanded lending activities.  The Bank's sources of
borrowings have been advances from the FHLB of Atlanta and obligations 
under repurchase agreements. 
 


Deposits 
-------- 
	Savings deposits in the Bank at September 30, 1997 and 1996 were 
represented by the various types of programs described as follows: 
 
 
                    DEPOSITS AT SEPTEMBER 30, 1997 
 
 
 
 
      Type                                     Weighted   Balance    Percentage
       of                             Minimum  Average  (Dollars in   of Total
     Account             Term         Amount    Rate     thousands)   Deposits
-------------------------------------------------------------------------------
 
Easy Checking                       $   --       --      $   1,937      1.49% 
 
Commercial Checking                     --       --          4,055      3.12% 
 
NOW Accounts                            750     1.25%       11,429      8.80% 
 
Super NOW and MMDA                    1,000     2.30%        4,756      3.66% 
 
Statement Savings                       100     2.35%        4,320      3.33% 
 
Certificate of deposit accounts: 
 
 Jumbo certificates   30 days
                      to 5 years   100,000      6.10%       18,900     14.55% 
 
Other time deposits: 
 
3 months              3-5 months     1,000      4.57%          358      0.28% 
 
6 months              6-11 months    1,000      5.26%        4,284      3.30% 
 
1 year               12-17 months      500      5.66%       37,863     29.15% 
 
1.5 years            18-23 months      500      6.21%          433      0.33% 
   
2 years              24--29 months     500      6.21%        6,196      4.77% 
 
2.5 years            30-35 months      500      5.91%        1,303      1.00% 
 
3 years              36-41 months      500      5.91%        6,067      4.67% 
 
3.5 years            42-47 months      500      6.10%          101      0.08% 
 
4 years              48-59 months      500      6.10%        1,514      1.17% 
 
5 years                 60 months      500      6.10%        9,028      6.95% 
 
18 month IRA            18 months      500      5.94%       16,043     12.35% 
 
Other                   30 days        500      4.57%        1,303      1.00% 
                                              --------     --------   --------
                                                4.97%    $ 129,890    100.00% 
                                              ========     ========   ========
 
Deposits at September 30, 1996 are represented on the next page. 
 
                                        21
<PAGE>
 
 
 
                               DEPOSITS AT SEPTEMBER 30, 1996 
   
 
 
      Type                                     Weighted   Balance    Percentage
       of                             Minimum  Average  (Dollars in   of Total
     Account             Term         Amount    Rate     thousands)   Deposits
-------------------------------------------------------------------------------
 
Easy Checking                       $   --       --      $   1,632      1.34% 
 
Commercial Checking                     --       --          4,635      3.81% 
 
NOW Accounts                            750     1.25%       11,598      9.54% 
 
Super NOW and MMDA                    1,000     2.35%        2,410      1.98% 
 
Statement Savings                       100     2.30%        4,565      3.76% 
 
Certificate of deposit accounts: 
 
 Jumbo certificates   30 days
                      to 5 years    99,000      4.48%       18,298     15.05% 
 
Other time deposits: 
 
3 months              3-5 months     1,000      4.32%          649      0.54% 
 
6 months              6-11 months    1,000      6.35%        6,281      5.17% 
 
1 year               12-17 months      500      5.25%       21,470     17.66% 
 
1.5 years            18-23 months      500      5.27%          199      0.16% 
   
2 years              24--29 months     500      5.30%       11,025      9.07% 
 
2.5 years            30-35 months      500      5.31%        2,524      2.08% 
 
3 years              36-41 months      500      5.35%        5,032      4.14% 
 
3.5 years            42-47 months      500      5.36%          100      0.08% 
 
4 years              48-59 months      500      5.40%        3,853      3.17% 
 
5 years                 60 months      500      5.45%       10,954      9.00% 
 
18 month IRA            18 months      500      5.29%       15,747     12.96% 
 
Other                   30 days        500      2.78%          593      0.49% 
                                              --------     --------   --------
                                                4.49%    $ 121,555    100.00% 
                                              ========     ========   ========
                                         22

<PAGE>
	The Bank has a number of different programs designed to attract both 
short-term and long-term savings of the general public.  The programs include 
commercial demand deposits (checking), NOW accounts, money market 
deposits accounts (MMDA), traditional passbook savings, time deposits in a 
minimum amount of $100,000 (Jumbo Certificates), other certificates of 
deposits and individual retirement accounts (IRAs). 
 
	The minimum amount required to open a certificate of deposit for 
other than retirement accounts varies from $500 to $100,000, depending on the 
type of deposit.  Rates on certificates of deposit are determined weekly by the 
Bank, based upon local market rates, national money market rates and yields on 
assets of the same maturity. 
 
	The variety of deposit accounts offered by the Bank allows it to be 
competitive in obtaining new funds, although the threat of disintermediation 
(the flow of funds away from the Bank into direct investment vehicles, such as 
mutual funds and government and corporate securities) still exists.  The ability
of the Bank to attract and retain deposits and the Bank's cost of funds have 
been, and will continue to be, significantly affected by capital and money 
market conditions. 
 
	The Bank attempts to control the flow of deposits by pricing its 
accounts to remain generally competitive with other financial institutions in 
its market area. 
 
	The Bank has generated Jumbo Certificates from both local 
individuals and businesses and from out-of-town individuals and businesses 
who have ties to its market area.  In addition, the Bank accepts public 
deposits.  The Bank responds to requests for rate information but does not 
accept deposits for which a broker's commission must be paid.  As with other
deposits, rates on Jumbo Certificates are set in a manner to be competitive in 
the Bank's market area. 
 
	The following table sets forth the composition of deposits, excluding 
accrued interest payable, by type and interest rate at the dates indicated. 
 
                                  23
<PAGE>
 
 
                         DEPOSITS BY TYPE 
                        ------------------ 
                                                        September 30,
                                               ---------------------------------
                                                1997         1996         1995 
                                               ---------------------------------
 
Access accounts:                                        (In thousands) 

 Commercial checking - 0.00%                 $   5,992        6,266       4,602
 
 NOW accounts - 1.25%                           11,429       11,599      11,607 
 
 Money Market deposit account - varable rate     4,756        2,410       2,345 
 
 Statement savings - 2.30%                       4,320        4,565       4,713 
 
Certificates of deposits: 
 
 2.75% - 5.00%                                   2,564        6,408      10,134 
  
 5.01% - 7.00%                                  98,628       81,918      52,078 
  
 7.01% - 9.00%                                   2,201        8,389      20,993 
 
 9.01% - 11.00%                                   --           --            56 
                                               ---------------------------------
Subtotal                                       129,890      121,555     106,528 
  
 Accrued interest                                  496          548         527 
                                               ---------------------------------
Total                                        $ 130,386      122,103     107,055
                                               =================================
 
                       TIME DEPOSIT MATURITIES 
                       -----------------------
 
                                         Balances at September 30, 
------------------------------------------------------------------------------- 
Interest Rates      1998     1999     2000     2001     Thereafter     Total 
------------------------------------------------------------------------------- 
                                       (In thousands) 
 
2.75% - 5.00%    $  2,547      -         17      -            -         2,564 
 
5.01% - 7.00%      85,305    9,651    1,524    1,262          885      98,627 

7.01% - 9.00%         795      518      889      -            -         2,202 
 
9.01% - 11.00%        -        -        -        -            -           -   
                   ------------------------------------------------------------ 
                 $ 88,647   10,169    2,430    1,262          885     103,393 
                   ============================================================ 
 
                                              24
<PAGE>

 
 
                            JUMBO CD MATURITIES 
                            -------------------
 
        Maturity                                   September 30, 1997 
        --------                                   ------------------
                                                     (In thousands) 
 
Three months or less                             $           3,970 
 
Three to six months                                          8,065 
 
Six to twelve months                                         3,699 
 
Over twelve months                                           3,166 
                                                   ---------------
 Total                                           $          18,900 
                                                   ===============
 
 
                          AVERAGE DEPOSIT BY TYPE 
                          -----------------------
                              September 30, 1997         September 30, 1996 
                              ------------------         -------------------
          
                           Average         Weighted     Average      Weighted 
                           Balance       Average Rate   Balance    Average Rate
                         ----------------------------  -------------------------
                                               (In thousands) 
 
Non-interest bearing 
deposits                $    6,394            --          5,804         --   
 
NOW's                       11,633           1.25%       12,509        1.84% 
 
MMDA's                       3,226           2.35%        2,471        2.47% 
 
Savings                      4,384           2.30%        4,747        2.28% 
 
Time Deposits               99,153           5.94%       86,891        6.11% 
                  
                         ---------------------------   ------------------------
Total average deposits  $  124,790           4.97%      112,422        5.05% 
                         ---------------------------   ------------------------
 
 
Loan Repayments 
--------------- 
	In addition to regularly scheduled repayments, loans are prepaid in full 
as properties are sold, or are refinanced by the Bank or other lenders, or are 
satisfied in full by the borrower.  Loan repayments constitute a major source of
funding for the Bank. 
 
                                    25
<PAGE>

Borrowings
---------- 
	Savings deposits are the primary source of funds for the Bank's 
lending and investment activities and for its general business purposes.  The 
Bank has, however, used advances from the FHLB of Atlanta and other 
borrowings to supplement its supply of lendable funds.  Advances from the 
FHLB are typically secured by a portion of the Bank's first mortgage loans.  A 
summary of  the Bank's borrowings from the FHLB is set forth below: 
 
 
 
Due during  
year ending 
September 30,           Interest Rates                  1997            1996 
-------------------------------------------------------------------------------
 
1997                    4.93% to 8.45%         $        -            4,000,000 
 
1998                    5.32% to 7.27%               7,750,000       4,500,000 
 
1999                    5.68% to 6.76%               2,100,000       2,100,000 
 
2000                         6.77%                   3,000,000          -   
 
2001                         7.90%                     500,000         500,000 
 
2002                         5.66%                   1,000,000          -     
                                                 ------------------------------
                                               $    14,350,000      11,100,000 
                                                 ==============================
 
	The FHLB System functions as a central reserve bank providing credit 
for savings institutions.  As a member of the FHLB of Atlanta, the Bank is 
required to own capital stock in the FHLB of Atlanta and is authorized to apply 
for advances on the security of its home mortgage loans and other assets 
(primarily, securities which are obligations of, or are guaranteed by, the 
United States) provided certain standards related to creditworthiness have been 
met. 
 
	The FHLB offers several different credit programs each with its own 
interest rate and term.  It prescribes the acceptable uses for advances as well
as size limitations.  The FHLB periodically reviews its credit limitations and 
standards.  Under its current policies, the FHLB limits its advances based on a 
member institution's net worth or the FHLB's assessment of the institution's 
creditworthiness. 

                                    26
<PAGE>


	The following table sets forth certain information regarding 
borrowings by the Bank at the end of and during the periods indicated: 
 
 
                       FEDERAL HOME LOAN BANK ADVANCES 
                       -------------------------------
 
                                                     At September 30, 
                                           ------------------------------------
                                             1997         1996         1995    
                                           ------------------------------------ 
Balance outstanding                     $  14,350,000   11,100,000   11,948,000 
 
Weighted average rate                        5.79%        6.44%        7.10% 
 
Maximum amount of short-term 
borrowings outstanding at any 
month end                                  10,150,000    5,198,000    4,448,000 
 
Approximate average short-term 
borrowings outstanding                      7,100,000    4,092,000    2,157,000 
 
Approximate weighted average paid 
on short-term borrowings(1)                  6.47%        7.27%        5.90% 
--------------------------------------------------------------------------------
(1) The average method used is the average end of month totals 
 
Employees 
--------- 
	At September 30, 1997, the Bank employed 86 full-time equivalent 
employees.  Management considers relations with its employees to be excellent.  
The Bank currently maintains a comprehensive employee benefits program 
including, among other benefits, hospitalization and major medical insurance, 
life insurance, dental insurance, long term disability, a 401(k) plan and 
educational assistance.  Management considers these benefits to be generally 
competitive with those offered by competing financial institutions in its 
market area.  The Bank's employees are not represented by any collective
bargaining group. 
 
Competition 
----------- 
	The Bank's primary market area is southeastern Georgia.  The Bank 
competes for loans primarily through referrals and quality of the services it 
provides to borrowers and home builders.  It competes for savings by offering 
depositors a wide variety of savings accounts, checking accounts, NOW 
accounts, convenient office locations, tax-deferred retirement programs and 
other services. 
 
	Federal deregulation of financial institutions has contributed to the 
dramatic increase in competition for savings dollars between savings 
institutions and other types of investment vehicles, such as money market 
mutual funds, U.S. Treasury securities and municipal bonds, as well as an 
increase in competition with commercial banks for loans, checking accounts 
and other types of financial services.  In addition, large conglomerates and 
investment banking firms have entered the market for financial services.  
Accordingly, the Bank, like other institutions, faces increased competition in 
the future in attracting and retaining customers for the services it offers. 
 
 
                     Supervision and Regulation 
                     --------------------------
	Savings and loan holding companies and federal savings banks are 
extensively regulated under both Federal and state law.  The following is a 
brief summary of certain statutes and rules and regulations that affect or will
affect the Company and the Bank.  This summary is qualified in its entirety by 
reference to the particular statute and regulatory provision referred to below 
and is not intended to be an exhaustive description of the statutes or
regulations applicable to the business of the Company and the Bank.  

                                28
<PAGE>

Supervision, regulation and examination of the Company and the Bank by the 
regulatory agencies are intended primarily for the protection of depositors 
rather than shareholders of the Company.  The terms savings association, federal
savings bank and thrift are used interchangeably in this section. 
 
Savings and Loan Holding Company Regulation 
 
	The Company is a registered holding company under both the Savings 
and Loan Holding Company Act (the "SLHCA") set forth in Section 10 of the 
Home Owners Loan Act ("HOLA") and the Financial Institutions Code of 
Georgia ("FICG").  The Company is regulated under such acts by the Office of 
Thrift Supervision (the "OTS") and by the Department of Banking and Finance 
(the "Georgia Department"), respectively.  As a savings and loan holding 
company, the Company is required to file with the OTS an annual report and 
such additional information as the OTS may require pursuant to the SLHCA.  
The OTS also conducts examinations of the Company and each of its 
subsidiaries. 
 
	Savings and loan holding companies and their subsidiaries are 
prohibited from engaging in any activity or rendering any services for or on 
behalf of their savings institution subsidiaries for the purpose or with the 
effect of evading any law or regulation applicable to the institution.  This 
restriction is designed to prevent the use of holding company affiliates to 
evade requirements of the SLHCA that are designed to protect the holding 
company's savings institution subsidiaries.  A unitary holding company, that is,
a holding company that owns only one insured institution whose subsidiary 
institution satisfies the qualified thrift lender test (discussed below), is not
restricted to any statutorily prescribed list of permissible activities, and the
SLHCA and the FICG impose no limits on direct or indirect non-savings 
institution subsidiary operations. 
 
	The SLHCA and the FICG makes it unlawful for any savings and loan 
holding company, directly or indirectly, or through one or more subsidiaries or 
one or more transactions, to acquire control of another savings association or 
another savings and loan holding company without prior approval from the 
OTS and the Georgia Department, respectively.  An acquisition by merger, 
consolidation or purchase of assets of such an institution or holding company or
of substantially all of the assets of such an institution or holding company is 
also prohibited without prior OTS or Georgia Department approval.  When 
considering an application for such an acquisition, the OTS and the Georgia 
Department take into consideration the financial and managerial resources and 
future prospects of the prospective acquiring company and the institution 
involved.  This includes consideration of the competence, experience and 
integrity of the officers, directors and principal shareholders of the acquiring
company and savings institution.  In addition, the OTS and the Georgia 
Department consider the effect of the acquisition on the institution, the 
insurance risk to the Savings Association Insurance Fund ("SAIF") and the 
convenience and needs of the community to be served. 
 
	The OTS may not approve an acquisition that would result in the 
formation of certain types of interstate holding company networks.  The OTS is 
precluded from approving an acquisition that would result in the formation of a 
multiple holding company controlling institutions in more than one state unless 
the acquiring company or one of its savings institution subsidiaries is 
authorized to acquire control of an institution or to operate an office in the 
additional state pursuant to a supervisory acquisition authorized under Section 
13(k) of the Federal Deposit Insurance Act or unless the statutes of the state 
in which the institution to be acquired is located permits such an acquisition.

	Savings and loan holding companies are allowed to acquire or to 
retain as much as 5% of the voting shares of a savings institution or savings 
and loan holding company without regulatory approval. 
 
                                     28
<PAGE>

Bank Regulation 
--------------- 
	General.  The Bank is a federal savings bank organized under the laws 
of the United States subject to examination by the OTS.  The OTS regulates all 
areas of the Bank's banking operations including reserves, loans, mergers, 
payment of dividends, interest rates, establishment of branches, and other 
aspects of operations.  OTS regulations generally provide that federal savings 
banks must be examined no less frequently than every 12 months, unless the 
federal savings bank (i) has assets of less than $250 million; (ii) is well 
capitalized; (iii) was found to be well managed and its composite condition was 
found to be outstanding (or good, if the bank had total assets of not more than 
$100,000) during its last examination; (iv) is not subject to a formal 
enforcement proceeding or an order from the Federal Deposit Insurance 
Corporation ("FDIC") or another banking agency; and (v) has not undergone a 
change of control during the previous 12-month period.  Federal savings banks 
must be examined no less frequently than every 18 months.  The Bank also is 
subject to assessments by the OTS to cover the costs of such examinations. 
 
	The Bank is also insured and regulated by the FDIC.  The major 
functions of the FDIC with respect to insured federal savings banks include 
paying depositors to the extent provided by law in the event an insured bank is 
closed without adequately providing for payment of the claims of depositors 
and preventing the continuance or development of unsound and unsafe banking 
practices. 
 
	Subsidiary institutions of a savings and loan holding company, such as 
the Bank, are subject to certain restrictions imposed by the Federal Reserve Act
on any extension of credit to the holding company or any of its subsidiaries, on
investment in the stock or other securities thereof, and on the taking of such 
stock or securities as collateral for loans to any borrower.  In addition, a 
holding company and its subsidiaries are prohibited from engaging in certain 
tying arrangements in connection with any extension of credit or provision of 
any property or services. 
 
	Capital Requirements.  OTS regulations require that federal savings 
banks maintain (i) "tangible capital" in an amount of not less than 1.5% of 
total assets, (ii) "core capital" in an amount not less than 3.0% of total 
assets, and (iii) a level of risk-based capital equal to 8% of risk-weighted 
assets.  Under OTS regulations, the term "core capital" generally includes 
common stockholders' equity, noncumulative perpetual preferred stock and related
surplus, and minority interests in the equity accounts of consolidated 
subsidiaries less unidentifiable intangible assets (other than certain amounts 
of supervisory goodwill) and certain investments in certain subsidiaries plus 
90% of the fair market value of readily marketable purchased mortgage servicing 
rights ("PMSRs") and purchased credit card relationships (subject to certain 
conditions).  "Tangible capital" generally is defined as core capital minus 
intangible assets and investments in certain subsidiaries, except PMSRs. 
 
	In determining total risk-weighted assets for purposes of the risk-based 
requirement, (i) each off-balance sheet asset must be converted to its 
on-balance sheet credit equivalent amount by multiplying the face amount of each
such item by a credit conversion factor ranging from 0% to 100% (depending upon 
the nature of the asset), (ii) the credit equivalent amount of each off-balance 
sheet asset and each on-balance sheet asset must be multiplied by a risk factor 
ranging from 0% to 200% (again depending upon the nature of the asset) and 
(iii) the resulting amounts are added together and constitute total 
risk-weighted assets.  "Total capital," for purposes of the risk-based capital 
requirement equals the sum of core capital plus supplementary capital (which, as
defined, includes the sum of, among other items, perpetual preferred stock not
counted as core capital, limited life preferred stock, subordinated debt, and 
general loan and lease loss allowances up to 1.25% of risk-weighted assets) less
certain deductions.  The amount of supplementary capital that may be counted 
towards satisfaction of the total capital requirement may not exceed 100% of 
core capital, and OTS regulations require the maintenance of a minimum ratio of 
core capital to total risk-weighted assets of 4%. 

                                  29
<PAGE>
 
	OTS regulations have been amended to include an interest-rate risk 
component to the risk-based capital requirement.  Under this regulation, an 
institution is considered to have excess interest rate-risk if, based upon a 
200-basis point change in market interest rates, the market value of an 
institution's capital changes by more than 2%.  This new requirement is not 
expected to have any material effect on the ability of the Bank to meet the 
risk-based capital requirement.  The OTS also revised its risk-based capital 
standards to ensure that its standards provide adequately for concentration of 
credit risk, risk from nontraditional activities and actual performance and 
expected risk of loss on multi-family mortgages. 
 
	Capital requirements higher than the generally applicable minimum 
requirement may be established for a particular savings association if the OTS 
determines that the institution's capital was or may become inadequate in view 
of its particular circumstances. 
 
	Additionally, the Georgia Department requires that savings and loan 
holding companies, such as the Company, must maintain a 5% Tier 1 leverage 
ratio on a consolidated basis. 
 
	Prompt Corrective Action.  The Federal Deposit Insurance 
Corporation Improvement Act of 1991 (the "FDIC Act") imposes a regulatory 
matrix which requires the federal banking agencies, which include the OTS, 
the FDIC, the Office of the Comptroller of Currency (the "OCC"), and the 
Federal Reserve Board, to take prompt corrective action to deal with depository 
institutions that fail to meet their minimum capital requirements or are 
otherwise in a troubled condition.  The prompt corrective action provisions 
require undercapitalized institutions to become subject to an increasingly 
stringent array of restrictions, requirements and prohibitions, as their capital
levels deteriorate and supervisory problems mount.  Should these corrective 
measures prove unsuccessful in recapitalizing the institution and correcting its
problems, the FDIC Act mandates that the institution be placed in receivership. 
 
Pursuant to regulations promulgated under the FDIC Act, the 
corrective actions that the banking agencies either must or may take are tied 
primarily to an institution's capital levels.  In accordance with the framework 
adopted by the FDIC Act, the banking agencies have developed a classification 
system, pursuant to which all banks and thrifts will be placed into one of five 
categories: well-capitalized institutions, adequately capitalized institutions, 
undercapitalized institutions, significantly undercapitalized institutions and 
critically undercapitalized institutions.  The capital thresholds established 
for each of the categories are as follows: 
 
                                                        Tier 1
                                        Risk-Based    Risk-Based
Capital Category     Tier 1 Capital      Capital       Capital        Other 
------------------------------------------------------------------------------- 
 
Well-Capitalized       5% or more      10% or more    6% or more    Not subject 
                                                                    to a capital
                                                                    directive 
 
Adequately 
 Capitalized           4% or more       8% or more    4% or more       --- 
 
Undercapitalized      less than 4%     less than 8%  less than 4%      --- 
 
Significantly 
 Undercapitalized     less than 3%     less than 6%  less than 3%      --- 
 
Critically 
 Undercapitalized     2% or less           ---           ---           ---
                      tangible equity 
 
 
	The undercapitalized, significantly undercapitalized and critically 
undercapitalized categories overlap; therefore, a critically undercapitalized 
institution would also be an undercapitalized institution and a significantly 
undercapitalized institution.  This overlap ensures that the remedies and 
restrictions prescribed for undercapitalized institutions will also apply to 
institutions in the lowest two categories. 

                             30
<PAGE>

 
	The down-grading of an institution's category is automatic in two 
situations:  (i) whenever an otherwise well-capitalized institution is subject 
to any written capital order or directive, and (ii) where an undercapitalized 
institution fails to submit or implement a capital restoration plan or has its 
plan disapproved.  The federal banking agencies may treat institutions in the 
well-capitalized, adequately capitalized and undercapitalized categories as if 
they were in the next lower capital level based on safety and soundness 
considerations relating to factors other than capital levels. 
 
	The FDIC Act prohibits all insured institutions regardless of their 
level of capitalization from paying any dividend or making any other kind of 
capital distribution or paying any management fee to any controlling person if 
following the payment or distribution the institution would be undercapitalized.
While the prompt corrective action provisions of the FDIC Act contain no 
requirements or restrictions aimed specifically at adequately capitalized 
institutions, other provisions of the FDIC Act and the agencies' regulations 
relating to deposit insurance assessments, brokered deposits and interbank 
liabilities treat adequately capitalized institutions less favorably than those 
that are well-capitalized. 
 
	A depository institution that is not well capitalized is prohibited from 
accepting deposits through a deposit broker.  However, an adequately 
capitalized institution can apply for a waiver to accept brokered deposits.  
Institutions that receive a waiver are subject to limits on the rates of 
interest they may pay on brokered deposits. 
 
	Capital Distributions.  An OTS rule imposes limitations on all capital 
distributions by savings associations (including dividends, stock repurchases 
and cash-out mergers).  Under the current rule, a savings association is 
classified based on its level of regulatory capital both before and after givinG
effect to a proposed capital distribution.  Under a proposed rule, the OTS woulD
conform its three classifications to the five capital classifications set forth 
under the prompt corrective action regulations.  Under the proposal, 
institutions that are at least adequately capitalized would still be required to
provide prior notice.  Well capitalized institutions could make capital 
distributions without prior regulatory approval in specified amounts in any 
calendar year. 
 
	An institution that both before and after a proposed capital distribution 
has net capital equal to or in excess of its capital requirements may, subject 
to any otherwise applicable statutory or regulatory requirements or agreements 
entered into with the regulators, make capital distributions in any calendar 
year up to 100% of its net income to date during the calendar year plus the
amount that would reduce by one-half its "surplus capital ratio" (i.e., the 
percentage by which the association's capital-to-assets ratio exceeds the ratio
of its fully phased-in capital requirement to its assets) at the beginning of 
the calendar year.  No regulatory approval of the capital distribution is 
required, but prior notice must be given to the OTS. 
 
	An institution that either before or after a proposed capital distribution 
fails to meet its then applicable minimum capital requirement or that has been 
notified that it needs more than normal supervision may not make any capital 
distributions without the prior written approval of the OTS.  In addition, the 
OTS may prohibit a proposed capital distribution, which would otherwise be 
permitted by the regulation, if the OTS determines that such distribution would 
constitute an unsafe or unsound practice. 
 
	Liquidity.  Under applicable federal regulations, savings associations 
are required to maintain an average daily balance of liquid assets (including 
cash, certain time deposits, certain bankers' acceptances, certain corporate 
debt securities and highly rated commercial paper, securities of certain mutual 
funds and specified United States government, state or federal agency 
obligations) equal to a monthly average of not less than a specified percentage 
of the average daily balance of the savings association's net withdrawable 
deposits plus short-term borrowings.  Under HOLA, this liquidity requirement may
be changed from time to time by the OTS to any amount within the range of 4% to 
10% depending upon economic conditions and the deposit flows of member 
institutions, and currently is 5%.  Savings institutions also are required to 
maintain an average daily balance of short-term liquid assets at a specified 
percentage (currently 1%) of the total of the average daily balance of its net 
withdrawable deposits and short-term borrowings.   

                                      31
<PAGE>
 
	Equity Investments.  The OTS has revised its risk-based capital 
regulation to modify the treatment of certain equity investments and to clarify 
the treatment of other equity investments.  Equity investments that are 
permissible for both savings banks and national banks will no longer be 
deducted from savings associations' calculations of total capital over a 
five-year period.  Instead, permissible equity investments will be placed in the
100% risk-weight category, mirroring the capital treatment prescribed for those 
investments when made by national banks under the regulations of the OCC.  
Equity investments held by savings associations that are not permissible for 
national banks must still be deducted from assets and total capital. 
 
	Qualified Thrift Lender Requirement.  A federal savings bank is 
deemed to be a "qualified thrift lender" ("QTL") as long as its "qualified 
thrift investments" equal or exceed 65% of its "portfolio assets" on a monthly 
average basis in nine out of every 12 months.  Qualified thrift investments
generally consist of (i) various housing related loans and investments (such as 
residential construction and mortgage loans, home improvement loans, mobile home
loans, home equity loans and mortgage-backed securities), (ii) certain 
obligations of the FDIC and (iii) shares of stock issued by any FHLB, the 
FHLMC or the FNMA.  In addition, the following assets may be categorized as 
qualified thrift investments in an amount not to exceed 20% in the aggregate of 
portfolio assets:  (i) 50% of the dollar amount of residential mortgage loans 
originated and sold within 90 days of origination; (ii) investments in 
securities of a service corporation that derives at least 80% of its income from
residential housing finance; (iii) 200% of loans and investments made to 
acquire, develop or construct starter homes or homes in credit needy areas 
(subject to certain conditions); (iv) loans for the purchase or construction of 
churches, schools, nursing homes and hospitals; and (v) consumer loans (in an 
amount up to 20% of portfolio assets).  For purposes of the QTL test, the term
"portfolio assets" means the savings institution's total assets minus goodwill 
and other intangible assets, the value of property used by the savings 
institution to conduct its business, and liquid assets held by the savings 
institution in an amount up to 20% of its total assets. 
 
	OTS regulations provide that any savings association that fails to meet 
the definition of a QTL must either convert to a national bank charter or limit 
its future investments and activities (including branching and payments of 
dividends) to those permitted for both savings associations and national banks.
Further, within one year of the loss of QTL status, a holding company of a 
savings association that does not convert to a bank charter must register as a 
bank holding company and will be subject to all statutes applicable to bank 
holding companies.  In order to exercise the powers granted to federally 
chartered savings associations and maintain full access to FHLB advances, the 
Bank must meet the definition of a QTL. 
 
	Loans to One Borrower Limitations.  HOLA generally requires savings 
associations to comply with the loans to one borrower limitations applicable to 
national banks.  National banks generally may make loans to a single borrower 
in amounts up to 15% of their unimpaired capital and surplus, plus an 
additional 10% of capital and surplus for loans secured by readily marketable 
collateral.  HOLA provides exceptions under which a savings association may 
make loans to one borrower in excess of the generally applicable national bank 
limits.  A savings association may make loans to one borrower in excess of such 
limits under one of the following circumstances: (i) for any purpose, in any 
amount not to exceed $500,000; or (ii) to develop domestic residential housing 
units, in an amount not to exceed the lesser of $30 million or 30% of the 
savings association's unimpaired capital and unimpaired surplus, provided 
other conditions are satisfied.  The Federal Institutions Reform, Recovery, and 
Enforcement Act of 1989 provided that a savings association could make loans 
to one borrower to finance the sale of real property acquired in satisfaction of
debts previously contracted in good faith in amounts up to 50% of the savings 
association's unimpaired capital and unimpaired surplus.  The OTS, however, 
has modified this standard by limiting loans to one borrower to finance the sale
of real property acquired in satisfaction of debts to 15% of unimpaired capital 
and surplus.  That rule provides, however, that purchase money mortgages 

                                   32
<PAGE>

received by a savings association to finance the sale of such real property do 
not constitute "loans" (provided no new funds are advanced and the savings 
association is not placed in a more detrimental position holding the note than 
holding the real estate) and, therefore, are not subject to the loans to one 
borrower limitations. 
 
	Commercial Real Property Loans.  HOLA limits the aggregate amount 
of commercial real estate loans that a federal savings association may make to 
an amount not in excess of 400% of the savings association's capital. 
 
	Community Reinvestment.  Under the Community Reinvestment Act 
(the "CRA") and the implementing OTS regulations, federal savings banks 
have a continuing and affirmative obligation to help meet the credit needs of 
its local community, including low and moderate-income neighborhoods, 
consistent with the safe and sound operation of the institution.  The CRA 
requires the board of directors of financial institutions, such as the Bank, to 
adopt a CRA statement for each assessment area that, among other things, 
describes its efforts to help meet community credit needs and the specific types
of credit that the institution is willing to extend.  The regulations 
promulgated pursuant to CRA contain three evaluation tests:  (i) a lending test 
which will compare the institution's market share of loans in low- and 
moderate-income areas to its market share of loans in its entire service area 
and the percentage of a bank's outstanding loans to low- and moderate-income
areas or individuals, (ii) a services test which will evaluate the provision of 
services that promote the availability of credit to low- and moderate-income 
areas, and (iii) an investment test, which will evaluate an institution's record
of investments in organizations designed to foster community development, small-
and minority-owned businesses and affordable housing lending, including state 
and local government housing or revenue bonds. 
 
	Fair Lending.  Congress and various federal agencies (including, in 
addition to the bank regulatory agencies, the Department of Housing and Urban 
Development, the Federal Trade Commission and the Department of Justice) 
(collectively the "Federal Agencies") responsible for implementing the nation's 
fair lending laws have been increasingly concerned that prospective home 
buyers and other borrowers are experiencing discrimination in their efforts to 
obtain loans.  In recent years, the Department of Justice has filed suit a
gainst financial institutions that it determined had discriminated, seeking
fines and restitution for borrowers who allegedly suffered from discriminatory 
practices.  Most, if not all, of these suits have been settled (some for 
substantial sums) without a full adjudication on the merits. 
 
	On March 8, 1994, the Federal Agencies, in an effort to clarify what 
constitutes lending discrimination and to specify the factors the agencies will 
consider in determining if lending discrimination exists, announced a joint 
policy statement detailing specific discriminatory practices prohibited under 
the Equal Credit Opportunity Act and the Fair Housing Act.  In the policy 
statement, three methods of proving lending discrimination were identified:
(i) overt evidence of discrimination, when a lender blatantly discriminates on a
prohibited basis, (ii) evidence of disparate treatment, when a lender treats 
applicants differently based on a prohibited factor even where there is no 
showing that the treatment was motivated by prejudice or a conscious intention 
to discriminate against a person, and (iii) evidence of disparate impact, when a
lender applies a practice uniformly to all applicants, but the practice has a 
discriminatory effect, even where such practices are neutral on their face and 
are applied equally, unless the practice can be justified on the basis of 
business necessity. 
 
	FDIC Insurance Assessments.  Federal deposit insurance is required 
for all federally chartered savings associations.  Deposits at the Bank are 
insured to a maximum of $100,000 for each depositor by Savings Association 
Insurance Fund (the "SAIF").  As a SAIF-insured institution, the Bank is 
subject to regulation and supervision by the FDIC, to the extent deemed 
necessary by the FDIC to ensure the safety and soundness of the SAIF.  The 
FDIC is entitled to have access to reports of examination of the Bank made by 
the OTS and all reports of condition filed by the Bank with the OTS.  The 
FDIC also may  require the Bank to file such additional reports as it determines
to be advisable for insurance purposes.  Additionally, the FDIC may determine 

                                   33
<PAGE>

by regulation or order that any specific activity poses a serious threat to the 
SAIF and that no SAIF member may engage in the activity directly. 
 
	Insurance premiums are paid in semiannual assessments.  Under a 
risk-based assessment system, the FDIC is required to calculate a savings 
association's semiannual assessment based on (i) the probability that the 
insurance fund will incur a loss with respect to the institution (taking into 
account the institution's asset and liability concentration), (ii) the potential
magnitude of any such loss, and (iii) the revenue and reserve needs of the 
insurance fund.  The semiannual assessment imposed on the Bank may be 
higher depending on the SAIF revenue and expense levels, and the risk 
classification applied to the Bank. 
 
	The deposit insurance assessment rate charged to each institution 
depends on the assessment risk classification assigned to each institution.  
Under the risk-classification system, each SAIF member is assigned to one of 
three capital groups: "well capitalized," "adequately capitalized," or "less 
than adequately capitalized," as such terms are defined under the OTS's prompt 
corrective action regulation (discussed above), except that "less than 
adequately capitalized" includes any institution that is not well capitalized or
adequately capitalized.  Within each capital group, institutions are assigned to
one of three supervisory subgroups "healthy" (institutions that are financially 
sound with only a few minor weaknesses), "supervisory concern" (institutions 
with weaknesses which, if not corrected could result in significant 
deterioration of the institution and increased risk to the SAIF) or "substantial
supervisory concern" (institutions that pose a substantial probability of loss 
to the SAIF unless corrective action is taken).  The FDIC will place each 
institution into one of nine assessment risk classifications based on the 
institution's capital group and supervisory subgroup classification. 
 
	Historically, SAIF premiums had been equivalent to deposit insurance 
premiums paid by banks on deposits to the Bank Insurance Fund ("BIF").  
Deposit insurance premiums were set to facilitate each fund achieving its 
designated reserve ratios.  As each fund achieves its designated reserve ratio, 
however, the FDIC has the authority to lower the premium assessments for that 
fund to a rate that would be sufficient to maintain the designated reserve 
ratio.  In August 1995, the FDIC determined that the BIF had achieved its 
designated reserve ratio and approved lower BIF premium rates for deposit 
insurance by the BIF for all but the riskiest institutions.  On November 14, 
1995, the FDIC determined that BIF deposit insurance premiums for well 
capitalized banks would be further reduced to the then-statutory minimum of 
$2,000 per institution per year, effective January 1, 1996.  Because the SAIF 
remained significantly below its designated reserve ratio, insurance premiums 
for assessable SAIF deposits were not reduced in either FDIC action. 
 
	The financial condition of the SAIF resulted in the adoption of the 
Deposit Insurance Funds Act of 1996 ("DIFA"), which was enacted on 
September 30, 1996 as part of the Omnibus Consolidated Appropriations Act.  
Under DIFA, a special one-time assessment of 65.7 cents per $100 of assessable 
SAIF deposits was collected on November 27, 1996 and applied retroactively to 
SAIF deposits as of March 31, 1995.  DIFA provides that special assessments 
are deductible under Section 162 of the Internal Revenue Code in the year in 
which the assessment is paid.  After collection of the special assessment, the 
SAIF achieved its designated reserve ratio and SAIF premium rates became the 
same as BIF rates.  DIFA further provides that BIF and SAIF are to be merged, 
creating the "Deposit Insurance Fund," on January 1, 1999, provided that bank 
and savings association charters are combined by that date.  The Treasury 
Department has submitted a report to Congress on the development of a 
common charter for all insured depository institutions.  See "Supervision and 
Regulation - Elimination of Federal Savings Charter." 
 
	DIFA further assesses premiums for Financing Corporation Bond debt 
service ("FICO").  Beginning January 1, 1997, FICO premiums for BIF and 
SAIF became 1.3 and 6.4 basis points, respectively.  Full pro rata sharing of 
FICO will begin no later than January 1, 2000. 
 
	Effective January 1, 1997, SAIF members had the same risk-based 
assessment schedule as BIF members, which is 0 to 27 cents per $100 of 
deposits.  FICO assessments of 1.3 cents for BIF deposits and 6.4 cents per 

                               34
<PAGE>

$100 of deposits for SAIF deposits will be added to the BIF-assessable base and 
SAIF assessable base, respectively, until December 31, 1999.  Thereafter, 
approximately 2.4 cents per $100 of deposits would be added to each regular 
assessment for all insured depositors, thereby achieving full pro rata FICO 
sharing. 
 
	Insurance of deposits may be terminated by the FDIC after notice and 
hearing, upon a finding by the FDIC that the savings association has engaged 
in unsafe or unsound practices, is in an unsafe or unsound condition to continue
operations, or has violated any applicable law, rule, regulation, order or 
condition imposed by, or written agreement with, the FDIC.  Additionally, if 
insurance termination proceedings are initiated against a savings association, 
the FDIC may temporarily suspend insurance on new deposits received by an 
institution under certain circumstances.   
 
	Federal Home Loan Bank System.  The FHLB System consists of 12 
regional FHLBs, each subject to supervision and regulation by the Federal 
Housing Finance Board (the "FHFB").  The FHLBs provide a central credit 
facility for member savings associations.  The maximum amount that the FHLB 
of Atlanta will advance fluctuates from time to time in accordance with 
changes in policies of the FHFB and the FHLB of Atlanta, and the maximum 
amount generally is reduced by borrowings from any other source.  In addition, 
the amount of FHLB advances that a savings association may obtain will be 
restricted in the event the institution fails to constitute a QTL. 
 
	Federal Reserve System.  The Federal Reserve Board has adopted 
regulations that require savings associations to maintain nonearning reserves 
against their transaction accounts (primarily NOW and regular checking 
accounts).  These reserves may be used to satisfy liquidity requirements 
imposed by the OTS.  Because required reserves must be maintained in the 
form of cash or a non-interest-bearing account at a Federal Reserve Bank, the 
effect of this reserve requirement is to reduce the amount of the Bank's 
interest-earning assets. 
 
	Savings institutions also have the authority to borrow from the Federal 
Reserve "discount window."  Federal Reserve Board regulations, however, 
require savings associations to exhaust all FHLB sources before borrowing from 
a Federal Reserve bank. 
 
	Transactions with Affiliates Restrictions.  Transactions engaged in by 
a savings association or one of its subsidiaries with affiliates of the savings 
association generally are subject to the affiliate transaction restrictions 
contained in Sections 23A and 23B of the Federal Reserve Act in the same 
manner and to the same extent as such restrictions apply to transactions 
engaged in by a member bank or one of its subsidiaries with affiliates of the 
member bank.  Section 23A of the Federal Reserve Act imposes both 
quantitative and qualitative restrictions on transactions engaged in by a 
member bank or one of its subsidiaries with an affiliate, while Section 23B of 
the Federal Reserve Act requires, among other things that all transactions with 
affiliates be on terms substantially the same, and at least as favorable to the 
member bank or its subsidiary, as the terms that would apply to, or would be 
offered in, a comparable transaction with an unaffiliated party.  Exemptions 
from, and waivers of, the provisions of Sections 23A and 23B of the Federal 
Reserve Act may be granted only by the Federal Reserve Board.  The HOLA 
and OTS regulations promulgated thereunder contain other restrictions on 
loans and extension of credit to affiliates, and the OTS is authorized to impose
additional restrictions on transactions with affiliates if it determines such 
restrictions are necessary to ensure the safety and soundness of any savings 
association.  Current OTS regulations are similar to Sections 23A and 23B of 
the Federal Reserve Act. 
 
	Future Requirements.  Statutes and regulations are regularly 
introduced which contain wide-ranging proposals for altering the structures, 
regulations and competitive relationships of financial institutions.  It cannot 
be predicted whether or what form any proposed statute or regulation will be 
adopted or the extent to which the business of the Company and the Bank may 
be affected by such statute or regulation. 

                                        35
<PAGE>

 
Elimination of Federal Savings Association Charter 
-------------------------------------------------- 
	Legislation that would eliminate the federal savings association 
charter is under discussion.  If such legislation is enacted, the Bank would be 
required to convert its federal savings bank charter to either a national bank 
charter or to a state depository institution charter. Various legislative 
proposals also may result in the restructuring of federal regulatory oversight, 
including, for example, consolidation of the OTS into another agency, or 
creation of a new Federal banking agency to replace the various such agencies 
which presently exist.  The Bank is unable to predict whether such legislation 
will be enacted or, if enacted, whether it will contain relief as to bad debt 
deductions previously taken. 
 
 
Item 2.	DESCRIPTION OF PROPERTIES 
 
	The executive office of the Company and Bank is located at 1703 
Gloucester Street, Brunswick, Georgia 31520, and its telephone number at that 
office is (912) 267-7283.  The Bank also has six full-service branch offices.  
The following table sets forth the addresses of the aforementioned offices, 
their net book value and the expiration dates of the leases applicable to the
offices not  owned by the Bank. 
 
 
Office                            Lease Expiration Date           Net Book Value
--------------                    ---------------------           --------------
 
Executive Office 
---------------- 
 
1703 Gloucester Street 
Brunswick, GA 31520                        owned                      $904,694 
 
 
Full Service Offices 
-------------------- 
 
Altama Avenue Office 
4510 Altama Avenue 
Brunswick, GA 31520                      7/28/2007                        --- 
 
Demere Village 
2461 Demere Road 
St. Simons Island, GA  31522                owned                     $241,218 
 
North Brunswick Office 
2001 Commercial Drive South 
Brunswick, GA 31525                        6/27/97                        --- 
 
Wal-Mart SuperCenter 
150 Altama Connector 
Brunswick, Georgia 31525                  10/10/06                        ---
 
Waycross-Plant 
1010 Plant Avenue 
Waycross, GA 31501	                         owned                     $206,429 
 
Blackshear 
129 Highway 82 East 
Blackshear, GA 31516                        owned                      $30,354 

                                             36
<PAGE>
 
Item 3.	LEGAL PROCEEDINGS 
 
	Neither the Company nor the Bank is a party to, nor is any of their 
property the subject of, any material pending legal proceedings, other than 
ordinary routine litigation incidental to their business, and no such 
proceedings are known to be contemplated by governmental authorities. 
 
Item 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY 
HOLDERS 
 
		Not applicable 
 
 
PART II 
 
Item 5.	MARKET FOR COMMON EQUITY AND RELATED 
STOCKHOLDER 			MATTERS 
 
	Information concerning common stock, shareholders and dividends 
appears in the Annual Report under the heading "Shareholder Information" 
and is incorporated by reference herein. 
 
Item 6.	MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF 	
			OPERATION 
 
	Management's discussion and analysis of the Company's financial 
condition and its results of operations appears in the Annual Report  under the 
heading "Management's Discussion and Analysis of Financial Condition and 
Results of Operations" and is incorporated by reference herein. 
 
Item 7.	FINANCIAL STATEMENTS 
 
	The consolidated financial statements of the Company and the Bank as 
of September 30, 1997 and 1996 and for each of the years in the three year 
period ended September 30, 1997, 1996, and 1995, and the report issued on the 
1997 financials by the Company's independent certified public accountant, 
appear in the  Annual Report and are incorporated herein by reference. 
 
Item 8.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS 
ON ACCOUNTING AND 	FINANCIAL DISCLOSURE 
 
	On May 21, 1997, the Company filed a Form 8-K to disclose a change 
in auditor for the Company. 
 
	On May 1, 1997, the Company's Board of Directors elected to dismiss 
KPMG Peat Marwick LLP as the independent auditors of the Company.  On 
May 1, 1997, the Company engaged Deloitte & Touche LLP to replace KPMG 
Peat Marwick LLP.  Pursuant to Item 304 of the Regulation S-B, the Company 
discloses the following information. 
 
1.	KPMG Peat Marwick LLP was dismissed on May 1, 1997. 
 
2.	The report prepared by KPMG Peat Marwick LLP on the consolidated 
financial statements of the Company for the fiscal years ended September 30, 
1996 and 1995 did not contain an adverse opinion or disclaimer of opinion, nor 
was the report qualified or modified as to uncertainty, audit scope or 
accounting principles. 
 
3.	The decision to dismiss KPMG Peat Marwick Llp was reccommended 
and approved by the Audit Committee of the Board of Directors. 

                                    37
<PAGE>
 
4.	There were no disagreements with KPMG Peat Marwick LLP on any 
matter of accounting princoples or prectices, financial statement disclosure, 
auditing scope or procedure or any other matter requiring disclosure pursuant 
to Item 304 of Regulation S-B. 
 
PART III 
 
Item 9.	DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND 
		CONTROL PERSONS; Compliance with Section 16(a) 
		of the Exchange Act 
 
	Information concerning the Company's and the Bank's Directors and 
Executive Officers appears in the Proxy Statement under the heading "Election 
of Directors", "Executive Officers", "Ownership of Stock", and "Compliance 
with Section 16(a) of the Securities Exchange Act of 1934" and is incorporated 
by reference herein. 
 
Item 10.	EXECUTIVE COMPENSATION 
 
	Information concerning the compensation of the Company's and the 
Bank's Management appears in the Proxy Statement under the heading 
"Executive Compensation" and is incorporated by reference herein. 
 
Item 11.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS 
AND 			MANAGEMENT 
 
	Information concerning beneficial owners of more than 5% of the 
Company's common stock appears in the Proxy Statement under the heading 
"Ownership of Stock - Principal Holders of Stock" and is incorporated by 
reference herein. 
 
	Information concerning the common stock owned by the Company's 
management appears in the Proxy Statement under the heading "Ownership of 
Stock - Stock Owned by Management" and is incorporated by reference herein. 
 
Item 12.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 
 
	Information concerning certain relationships and related transactions 
appears in the Proxy Statement under the heading "Executive Compensation - 
Certain Other Transactions" and is incorporated by reference herein.  
 
Item 13.	EXHIBITS AND REPORTS ON FORM 8-K 
 
	(a)	Exhibits 
 
		The list of documents set forth on the Exhibit Index that 
immediately follows the last signature page hereof is incorporated herein by 
reference, and such documents are filed as exhibits to this report on Form 10-
KSB. 
 
	(b)	Reports on Form 8-K: 
		 
		The  Form 8-K filed on May 21, 1997 regarding the change 
in our independent accountants is incorporated herein by reference. 
 
                                  38
<PAGE>
 
SIGNATURES 
 
	In accordance with Section 13 or 15(d) of the Securities Exchange Act 
of 1934, the Registrant has duly caused this report to be signed on its behalf 
by the undersigned, thereunto duly authorized. 
 
			 
			 
	                                                 	FIRST GEORGIA HOLDING, INC. 
                                                         	(Registrant) 
						
                                                 	BY: HENRY S. BISHOP 
                                                      -------------------
                                             							  Henry S. Bishop 
                                             							  Chairman 
			 

                                          							Date: December 15, 1997
                                                       ----------------- 

POWER OF ATTORNEY 
 
	KNOW ALL MEN BY THESE PRESENTS, that each person whose 
signature appears below constitutes and appoints Henry S. Bishop and G.F. 
Coolidge III, and each of them, the person's attorneys-in-fact, each with full 
power of substitution, for the person in his or her name, place and stead, in 
any and all capacities, to sign any amendment to this Report on form 10-KSB, 
and to file the same, with exhibits thereto, and other documents in connection 
therewith, with the Securities and Exchange Commission and hereby ratifies 
and confirms all that each of said attorneys-in-fact, or his or her substitute 
or substitutes, may do or cause to be done by virtue hereof. 
 
                                39
<PAGE>

In accordance with the Securities Exchange Act of 1934, this report has been 
signed by the following persons on behalf of the Registrant in the capacities 
and on the dates indicated. 
 
    
 
Signatures                                Title                      Date 
-------------                             -----                      ---- 

HENRY S. BISHOP                   Chairman and Director       December 15, 1997
Henry S. Bishop                (principal executive officer) 
 
B.W. BOWIE 
B.W.  Bowie                             Director              December 15, 1997 
 
TERRY DRIGGERS 
Terry Driggers                          Director              December 15, 1997 
 
M. FRANK DeLOACH 
M. Frank DeLoach                        Director              December 15, 1997


ROY K. HODNETT 
Roy K. Hodnett                          Director              December 15, 1997 
 
HUBERT W. LANG
Hubert W. Lang, Jr.                     Director              December 15, 1997 
 
E. RAYMOND MOCK 
E. Raymond Mock                         Director              December 15, 1997 
 
JAMES D. MOORE  
James D. Moore                          Director              December 15, 1997 
 
D. LAMONT SHELL 
D. Lamont Shell                         Director              December 15, 1997 
 
G.F. COOLIDGE III                Chief Financial Officer
G.F. Coolidge III               (principal financial and 
                                   accounting officer)        December 15, 1997 
 
                                      40 
<PAGE>

                              EXHIBIT INDEX 
 
Exhibit No.                      Document                                 Page 
 
 
  3.(I)             Articles of Incorporation of First Georgia 
                    Holding, Inc. incorporated by reference 
                    herein By reference to Appendix B to the 
                    Proxy Statement and Prospectus included in the  
                    Registration statement on Form S-4 
                    (SEC No. 33-19150), filed December 18, 1987 
                    ("Form S-4"), as amended on December 31, 1987 
                    ("Amendment No. 1") First Georgia Savings 
                    Bank, F.S.B. is now known as First Georgia Bank, 
                    F.S.B.                                                N/A 
 
  3.(ii)            Amended By-Laws of First Georgia Holding, Inc. 	
                    incorporated by reference to Exhibit 3(ii) of 
                    the Form 10-KSB for the year ended September 30, 
                    1994 (the "1994 10-KSB")                              N/A 
 
 *10.1              First Georgia Holding, Inc. 1995 Stock Incentive 
                    Plan incorporated by reference to Exhibit 10.1 
                    of the Form 10-KSB for the year ended September 30, 
                    1995 (the "1995 10-KSB")                              N/A 
 
 *10.2              First Georgia Holding, Inc.  Employee Stock 
                    Purchase Plan incorporated by reference to 
                    Exhibit 10.2 of the 1995 10-KSB                       N/A 
 
 *10.3              Qualified 401 (k) Standardized Profit Sharing 
                    Plan, Adoption Agreement, First Georgia Savings 
                    Bank, F.S.B., incorporated herein by reference to 
                    Exhibit 10.3 of the Form 10-K for the year ended 
                    September 30, 1992 (the "1992 10-K")                  N/A 
 
 *10.4              Qualified Retirement Plan, Basic Plan Document, 
                    First Georgia Savings Bank, F.S.B., incorporated 
                    herein by reference to Exhibit 10.4 of the 
                    1992 10-K                                             N/A 
 
  13                First Georgia Holding, Inc. 1997 Annual Report         45 
 
  21                Subsidiaries of First Georgia Holding, Inc. 
                    incorporated by reference to Exhibit 21.6 of the 
                    Form 10-KSB for the year ended September 30, 1993 
                    (the "1993 10-KSB)                                    N/A 
 
                                41
 
 <PAGE>
 
  23                Consent of Deloitte & Touche LLP                       46 
 
  24                A power of attorney is set forth 
                    on the signature pages to this Form 10-KSB             41 
 
                                42
 <PAGE>
 
EXHIBIT 13.0 
FIRST GEORGIA HOLDING, INC. 
1996 ANNUAL REPORT 

           
 
                               ANNUAL REPORT	 
  
                              First Georgia: 
                         Its Mission and Markets 
 
 
First Georgia Holding, Inc. owns 100% of the stock of First Georgia Bank, 
F.S.B.  The Bank is federally chartered and began operations in January 1984.  
First Georgia develops and provides a full range of financial services 
encompassing retail banking, real estate, commercial and consumer lending, 
and a host of related financial products.  The Bank currently operates eight 
full service offices in four Georgia counties. 
 
First Georgia's PRIMARY MISSION is to maximize stockholder value in a 
prudent manner.  We will concentrate on the following principles. 
 
We will maintain high levels of asset quality  through conservative lending 
policies, a vigorous comprehensive credit administration system and a 
diversified portfolio of earning assets.  Interest rate risk will be thoroughly 
evaluated and controlled. 
 
Our long-term goals for return on equity and assets will be set at the upper 
levels of peer bank comparisons.  We will strive to maintain a strong capital 
base supported by adequate loan loss reserves. 
 
We will continue to attract and retain exceptional people.  We will deliver the 
best quality customer service available in the banking industry.  This high 
level of personal service is what separates us from our competitors. 
 
Our officers and employees will be encouraged to provide leadership and 
support in civic and economic development activities.  We will also strive to 
assess and serve the credit needs of each community in which we are located. 
 
We are committed to the overall success of First Georgia.  The proper 
implementation of these principles will continue to maximize the value of the 
Company. 
 
  1 
<PAGE>

                            PRESIDENT'S MESSAGE 
 
                             Dear Stockholders: 
 
	The year 1997 was a record one for our Company with unprecedented 
gains on earnings as well as significant gains in loans, deposits, and total 
assets.  Because of these substantial gains in earnings, our capital also 
increased by a significant amount making our Company an even stronger 
financial entity.  The consummation of the sale of First Federal Savings Bank 
to Nationsbank this past year also provided us with significant 
opportunities in 1997 as well as for the future.  We believe that we are 
now situated as the premier community bank in Glynn County, and as such, 
will continue to enjoy growth in earnings and deposits. 
     
 
	The strongest asset we have is our people.  We have assembled the 
most capable, caring, and qualified staff of any financial institution in 
Southeast Georgia.  These employees are committed to the common goal of 
giving the best personal service to our customers that is humanly possible.  
With this strong work ethic in place and the vibrant economy of Coastal 
Georgia, the opportunities we have are virtually endless. 
 
	We look forward to 1998 with great optimism; and as always, thank 
you for your support and your business. 
 
 
Sincerely, 
     
     
    
     
Henry S. Bishop 
Chairman 
 


2
<PAGE> 
 
 
 
 
 
 
 
 
 
 
 
 
 
                       FIRST GEORGIA HOLDING, INC. 
                        C O N S O L I D A T E D 
 
                           F I N A N C I A L 
 
                          S T A T E M E N T S 
  September 30, 1997 and 1996 (With Independent Auditors' Report Thereon) 
 
 
 
 
<PAGE>
 
 


                      CONSOLIDATED BALANCE SHEETS
              First Georgia Holding, Inc. and subsidiary 
 
 
Assets 
 
                                                    September 30 
                                                 --------------------------
                                                 1997               1996 
                                                 --------------------------
Cash and cash equivalents                        $  2,985,350     2,956,328 
Interest bearing deposits in other banks            1,523,777     2,954,350 
Investment securities held to maturity, 
fair value approximately   $9,692,000 
and $10,209,000 at September 30, 1997 
and 1996, respectively   (note 2)                   9,634,453    10,325,537 
Loans receivable, net of allowance for loan 
loss of $1,012,322 and $955,288 at September 
30, 1997 and 1996, respectively 
(notes 3 and 7)                                   137,864,633   122,431,469 
Real estate owned                                     423,000        94,200 
Federal Home Loan Bank stock, at cost (note 7)      1,160,300     1,575,700 
Premises and equipment, net (note 4)                3,181,618     3,334,879 
Accrued interest receivable (note 5)                  960,160       852,632 
Intangible assets, net                              1,029,715     1,276,532 
Deferred income taxes (note 9)                        157,004       238,167 
Other assets                                          781,487       875,479 
                                                  ------------------------- 
Total Assets                                     $159,701,497   146,915,273 
                                                  =========================
 
Liabilities and Stockholders' Equity 
 
Liabilities: 
     Deposits (note 6)                           $129,889,936   121,554,457 
     Federal Home Loan Bank advances (note 7)      14,350,000    11,100,000 
     Other borrowed money                              -             92,000 
     Accrued interest payable                         496,305       547,939 
     Obligations under capital lease (note 10)        245,659       261,904 
     Accrued expenses and other liabilities 
     (note 9)                                       1,372,327     1,442,574 
                                                  -------------------------
        Total liabilities                         146,354,227   134,998,874 
                                                  -------------------------
Commitments and contingencies (notes 3 and 10) 
 
Stockholders' Equity (notes 8 and 13): 
    Common stock, $1.00 par value;  10,000,000 
    shares authorized; 3,052,319 shares issued 
    and outstanding at September 30,1997 and 1996   3,052,319     3,052,319 
Additional paid-in capital                          4,223,197     4,223,197 
Retained earnings                                   6,071,754     4,640,883 
                                                  -------------------------
Total stockholders' equity                         13,347,270    11,916,399 
                                                  -------------------------
Total Liabilities and Stockholders' Equity       $159,701,497   146,915,273 
                                                  =========================
See accompanying notes to consolidated financial statements. 
 
3
<PAGE> 
                CONSOLIDATED STATEMENTS OF  OPERATIONS         
               First Georgia Holding, Inc. and subsidiary 
 
 
                                           Years Ended September 30, 
                                         ----------------------------------
                                               1997        1996        1995 
                                         ----------------------------------
 
Interest Income:                                 
    Loans                               $11,975,499  10,986,155  10,871,713 
    Mortgage-backed securities              314,956     321,798     211,136 
    Investment securities                   295,467     377,934     295,873 
    Other                                   198,010     108,029     247,615 
                                         ---------------------------------- 
      Total interest income              12,783,932  11,793,916  11,626,337 
                                         ----------------------------------
Interest Expense: 
   Deposits (note 6)                      6,175,696   5,682,330   5,345,453 
   Advances and other borrowings            763,159     867,052   1,061,904 
                                         ----------------------------------
      Total interest expense              6,938,855   6,549,382   6,407,357 
                                         ----------------------------------
 
Net interest income                       5,845,077   5,244,534   5,218,980 
Provision for Loan Losses (note 3)          309,679      48,104     214,142 
                                         ----------------------------------
Net interest income after provision 
 for loan losses                          5,535,398   5,196,430   5,004,838 
                                         ----------------------------------
 
Other Income: 
 Loan fees                                  473,890     382,841     451,199 
 Deposit service charges                    689,152     555,174     601,059 
 Gain on sale of branch (note 11)           433,760       -         122,043 
 Other operating income                      45,917      65,882      94,515 
                                         ----------------------------------
Total other income                        1,642,719   1,003,897   1,268,816 
                                         ----------------------------------
Other Expenses: 
 Salaries and employee benefits           2,324,280   1,986,763   1,932,837 
 Net occupancy expense                    1,064,499     952,724     904,659 
 Amortization of intangibles                119,625     131,736     143,304 
 Federal insurance premiums                 111,267     254,944     281,033 
 SAIF special assessment                      -         727,704        -       
 Other operating expenses                 1,126,320   1,020,704     962,418 
                                         ---------------------------------- 
Total other expenses                      4,745,991   5,074,575   4,224,251 
                                         ----------------------------------
 
Income before income taxes                2,432,126   1,125,752   2,049,403 
Income Tax Expense (note 9)                 838,461     364,386     772,315 
                                         ----------------------------------
Net Income                              $ 1,593,665     761,366   1,277,088 
                                         ==================================

Net income per share and common share 
 equivalent (note 14)                   $      0.48        0.23        0.42 
Weighted average common shares 
 outstanding and common share 
 equivalents                              3,354,499   3,250,772   3,065,851 
                                         ---------------------------------- 
 
See accompanying notes to consolidated financial statements. 
4
<PAGE>

               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY 
                First Georgia Holding, Inc. and subsidiary 
 
 
 
 
  
 
                          Years Ended September 30, 1997, 1996, and 1995 
                       ----------------------------------------------------     
                                          Additional
                         Common Stock   Paid-in Capital    Retained 
                                                           Earnings    Total 
                       ----------------------------------------------------
 
Balance, 
September 30, 1994    $     1,989,962    5,122,843   2,814,691   9,927,496 
 
 
Three for two stock 
split effected as a 
50% stock dividend 
in 1997 (fractional 
shares paid in cash)         994,857      (994,154)      -             703 
                      -----------------------------------------------------
 
Balance, 
September 30, 1994, 
as adjusted               2,984,819      4,128,689    2,814,691  9,928,199 
Net income                   -              -         1,277,088  1,277,088 
Cash dividends, $.027 
per share                    -              -           (79,598)   (79,598) 
                      -----------------------------------------------------
Balance, 
 September 30, 1995       2,984,819      4,128,689    4,012,181 11,125,689 
Exercise of stock 
 options                     67,500         17,625        -         85,125 
Income tax benefit 
 resulting from exercise 
 of stock options             -             76,883        -         76,883 
Net income                    -               -         761,366    761,366 
Cash dividends,$.045 
 per share                    -               -        (132,664)  (132,664) 
                      -----------------------------------------------------
Balance, 
 September 30, 1996      3,052,319       4,223,197    4,640,883 11,916,399 
Cash dividends, 
 $0.053 per share             -               -        (162,794)  (162,794)     
Net income                                            1,593,665  1,593,665 
                      -----------------------------------------------------
Balance,  
 September 30, 1997  $   3,052,319       4,223,197    6,071,754 13,347,270 
                      =====================================================

See accompanying notes to consolidated financial statements. 

5
<PAGE>

                   CONSOLIDATED STATEMENTS OF CASH FLOWS          
                 First Georgia Holding, Inc. and subsidiary 
 
 
 
                                              Years Ended September 30, 
                                      -------------------------------------
                                       1997          1996          1995 
                                      -------------------------------------
Operating Activities 
 Net income                          $   1,593,665    761,366    1,277,088 
 Adjustments to reconcile net 
 income to net cash provided by               
 operating activities: 
 Provision for loan losses                 309,679     48,104      214,142 
 Depreciation and amortization, 
 net of accretion                          418,988    381,871      425,849 
 Amortization of intangibles               119,625    131,736      143,304 
 Amortization of net deferred loan 
 costs (fees)                               (1,230)    24,672     (106,755) 
 Gain on sale of branch                   (433,760)     -         (122,043) 
 (Gain) loss on sale of real estate 
 owned                                     (19,837)      (505)      17,969 
 Deferred income tax (benefit) expense      81,163   (287,279)      29,959 
 Increase  in accrued interest receivable (107,528)  (101,524)     (20,244) 
 Decrease (increase)  in other assets       93,992    154,407     (205,076) 
 (Decrease) increase in advance payments 
 by borrowers for property taxes 
 and insurance                             (20,078)   (29,619)       8,237 
 Increase (decrease)in accrued 
 expenses and other liabilities            (85,156)  (666,983)     364,447 
                                       ------------------------------------
 Net cash provided by operating 
 activities                              1,949,523    416,246    2,026,877 
                                       ------------------------------------
Investing Activities 
 Principal payments received on 
 mortgage-backed securities              506,640      478,221      311,364 
 Maturities of investment securities   4,300,000      100,000    1,000,000 
 Purchase of investment securities    (4,114,829)  (1,721,563)  (3,030,598) 
 Loan originations, net of 
 principal repayments                (16,277,228) (12,375,532)  (1,575,594) 
 Purchase of premises and equipment     (513,544)    (329,760)    (260,405) 
 Proceeds from sale of real estate 
 owned                                   219,837      416,159    1,380,599 
 Proceeds from sale of premises 
 and equipment                             -            -           21,008 
 Proceeds from redemption of 
 FHLB stock                              415,400        -             -        
                                     ---------------------------------------
Net cash used in investing activities(15,463,724) (13,432,475)  (2,153,626) 
                                     ---------------------------------------
6
<PAGE> 
 
                                         1997          1996            1995 
                                     --------------------------------------- 
Financing Activities                
 Net increase in deposits           $ 14,690,319   15,026,768    9,780,378 
 Net liabilities of branch 
 assumed by purchaser, 
 net of gain                          (5,573,578)      -        (2,868,419) 
 Repayments of other borrowed money      (92,000)    (100,000)  (1,048,000) 
 Proceeds from FHLB advances          14,500,000   19,600,000    4,000,000 
 Repayment of FHLB advances          (11,250,000) (20,448,000)  (8,800,000) 
 Net proceeds from exercise of 
 stock options                            -            85,125        - 
 Dividends paid                         (162,091)    (132,664)     (79,598) 
                                     ---------------------------------------
 
 Net cash provided by financing 
 activities                           12,112,650   14,031,229      984,361 
                                     --------------------------------------- 
 (Decrease) increase in cash 
 and cash equivalents                 (1,401,551)   1,015,000      857,612 
 
 Cash and cash equivalents at 
 beginning of year                     5,910,678    4,895,678    4,038,066 
                                      -------------------------------------
 
 Cash and cash equivalents at 
 end of year                         $ 4,509,127    5,910,678    4,895,678 
                                     ======================================
 
Supplemental disclosure of cash paid 
 during year for: 
    Interest                         $ 6,990,000    6,529,000    6,252,000 
    Income taxes                     $   622,000      828,000      538,000 
 
Supplemental disclosure of non-cash activities: 
 
    Loans receivable of approximately $645,000, $478,000, and $1,365,000 
were transferred to real estate owned during the years ended September 
30, 1997, 1996, and 1995, respectively. 
 
    No sales of real estate owned were financed by the Bank for September 
30, 1997.  Sales of real estate owned totaling approximately $173,000 
and $127,000 for the years ended September 30, 	1996 and 1995, 
respectively, were financed by the Bank. 
 
 
See accompanying notes to consolidated financial statements. 

7
<PAGE>

(1)  Summary of Significant Accounting Policies 
First Georgia Holding, Inc. (the Company) was incorporated on December 16, 
1987 for the purpose of acquiring all of the issued and outstanding stock of 
First Georgia Bank, F.S.B. (the Bank).  The accounting and reporting policies 
of First Georgia Holding, Inc. and subsidiary conform to generally accepted 
accounting principles.  The following is a description of the more 
significant of those policies which the Company follows in preparing 
and presenting its consolidated financial statements. 
  
(a) Basis of Financial Statement Presentation 
The financial statements have been prepared in conformity with generally 
accepted accounting principles.  In preparing the consolidated financial 
statements, management is required to make estimates and assumptions that 
affect the reported amounts of assets and liabilities and disclosure of 
contingent assets and liabilities at the date of the financial statements 
and the reported amounts of revenues and expenses during the reporting 
period.  Actual results could differ from those estimates. 
 
Material estimates that are particularly susceptible to significant change 
in the near term relate to the determination of the allowance for loan 
losses and the valuation of real estate acquired in connection with 
foreclosures or in satisfaction of loans.  In connection with the 
determination of the allowances for losses on loans and real estate 
acquired through foreclosure, management obtains independent appraisals 
and reviews available market data such as comparable sales and recent 
market trends through discussions with local real estate professionals. 
 
The consolidated financial statements include the accounts of the Company and 
the Bank.  All significant intercompany balances and transactions have been 
eliminated in consolidation. 
 
(b)  Investment Securities Held to Maturity  
The Company has classified all its investments in securities as held to 
maturity based upon positive intent and ability to hold those securities 
until maturity. 
 
Held to maturity securities are recorded at amortized cost adjusted for the 
amortization or accretion of premiums and  discounts.  Premiums and discounts 
are amortized or accreted over the life of the related investment security 
using a method which approximates level yield.  Purchase premiums and 
discounts on mortgage-backed securities are amortized and accreted to 
interest income using a method which approximates the interest method,  
over the remaining lives of the securities taking into consideration 
assumed prepayment patterns.  

(c)  Loans  and the Allowance for Loan Losses 
Loans are reported at principal amounts outstanding, less unearned income and 
the allowance for loan losses.  Interest income on loans is recognized on a 
level-yield basis. 
 
Loans are placed on a nonaccrual basis when reasonable doubt exists as to the 
full, timely collection of interest and principal or they become 
contractually in default for 90 days or more as to either interest or 
principal unless they are both well secured and in the process of collection. 
 
Additions to the allowance for loan losses are charged to operations based upon 
management's evaluation of the potential losses in its loan portfolio.  This 
evaluation considers the estimated value of the underlying collateral and such 
other factors as, in management's judgment, deserve recognition under existing 
economic conditions.  While management uses the best information available to 
make evaluations, future adjustments to the allowance may be necessary if 
conditions differ substantially from the assumptions used in making the 
evaluations.  In addition, various regulatory agencies, as an integral part of 
their examination process, periodically review the Bank's allowances for losses 
on loans and real estate owned.  Such agencies may require the Bank to 
recognize additions to the allowances based on their judgments of information 
available to them at the time of their examination.

8
<PAGE>    
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
 
A loan is considered impaired when it is probable that the Company will be 
unable to collect all amounts due according to the contractual terms of the 
loan agreement.  The Bank's impaired loans include nonaccrual loans, 
troubled debt restructurings, and large loans more than 90 days delinquent 
in which full payment of principal and interest is not expected.  Cash 
receipts on impaired loans are used to reduce principal balances.  
Impairment losses are included in the allowance for loan losses through a 
charge to the provision for loan losses.  
Impairment losses are measured by the present value of expected future cash 
flows discounted at the loan's effective interest rate, or at either the loan's 
observable market price or the fair value of the collateral.  Adjustment to 
impairment losses due to changes in the fair value of an impaired loan's 
underlying collateral are included in the provision for losses.  Upon 
disposition of an impaired loan, any related valuation allowance is 
reversed through a chargeoff to the allowance for loan losses. 
 
The Bank extends credit to customers throughout its market area with a 
concentration in real estate mortgage loans.  The real estate loan portfolio is 
substantially secured by properties located throughout Southeast Georgia.  
Although the Bank has a diversified loan portfolio, a substantial portion 
of its borrowers' ability to repay such loans is dependent upon the economy 
in the Bank's market area. 
 
(d)  Loan Origination and Commitment Fees 
Loan origination fees, net of certain direct origination costs, are 
deferred and amortized on a basis that approximates level yield over the 
contractual lives of the underlying loans.  In addition, fees for a 
commitment to originate or purchase loans are offset against direct loan 
origination costs incurred to make such commitments.  The net amounts are 
deferred and, if the commitment is exercised, recognized over the life of 
the related loan as a yield adjustment or, if the commitment expires 
unexercised, recognized as income upon expiration of the commitment. 
  
(e)  Real Estate Owned 
Real estate owned represents real estate acquired through foreclosure or deed
in lieu of foreclosure and is reported at lower of cost or fair value, 
adjusted for estimated selling costs.  Fair value is determined on the basis 
of current appraisals, comparable sales, and other estimates of value 
obtained principally from independent sources.  Any excess of the loan 
balance at the time of foreclosure over the fair value of the real estate 
held as collateral is recorded as a loan loss.  Gain or loss on sale and 
any subsequent permanent decline in fair value is recorded in income. 
 
(f) Federal Home Loan Bank Stock 
Investment in stock of a Federal Home Loan Bank is carried at cost and is 
required of those institutions who utilize its services.  No ready market 
exists for the stock, and it has no quoted value.  
 
(g)  Premises and Equipment 
Premises and equipment are carried at cost less accumulated depreciation.  
Depreciation is provided on a straight-line basis over the estimated useful 
lives of the related assets. 
 
(h) Intangible Assets 
Intangible assets consist of core deposit premiums and cost in excess of net 
assets acquired resulting from the Company's branch acquisitions in 1987.  
Such amounts are amortized using the straight-line method over the estimated 
life (19 years) of the customer deposit base.  The Company writes off the 
unamortized balance of the intangible assets upon the disposition of the 
related branches.  Intangible assets are reviewed for impairment whenever 
events or changes in circumstances indicate that the carrying amount of any 
such asset may not be recoverable.  In the event that facts and 
circumstances indicate that the carrying value of the intangible asset may 
be impaired, an evaluation of their recoverability would be performed and 
any resulting impairment loss recorded. 
 
(i)  Income Taxes 
The Company files consolidated income tax returns with its subsidiary.  

9
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D) 


Deferred tax assets and liabilities are recognized for temporary differences 
between the financial reporting basis of assets and liabilities and their 
respective tax bases.  Deferred tax assets and liabilities are measured using 
enacted tax rates expected to apply to taxable income in the years in which 
those temporary differences are expected to be recovered or settled.  The 
effect on deferred tax assets and liabilities of a change in tax rates is 
recognized in income in the period that includes the enactment date.  A 
valuation allowance is established for the portion of a deferred tax asset 
for which it is more likely than not that a tax benefit will not be realized. 
 
 
(j) Cash and Cash Equivalents 
For the purposes of the statement of cash flows, the Company considers cash on 
hand and in banks and  investments with a maturity of ninety days or less, at 
purchase, to be cash equivalents. 
 
 
(k) Reclassifications 
Certain reclassifications have been made to the 1996 and 1995 consolidated 
financial statements to conform with the presentation adopted in 1997. 
 
(l) Recent Accounting Pronouncements  
In March 1995, the Financial Accounting Standards Board issued Statement of 
Financial Accounting Standards No. 121, Accounting for the Impairment of 
Long-Lived Assets and for Long-Lived Assets to be Disposed Of (SFAS 121), 
which is effective for fiscal years beginning after December 15, 1995.  SFAS 
121 establishes accounting standards for the impairment of long-lived assets.  
The implementation of SFAS 121 did not materially impact the Company's 
financial position or results of operations because the Company periodically 
evaluates its assets for impairment using independent appraisals, cash flow 
analyses and other relevant information.  The Company has not experienced 
any significant impairment losses. 
 
In October 1995, Statement of Financial Accounting Standards No. 123 (SFAS 
123), Accounting for Stock-Based Compensation was issued.  SFAS 123 
established a fair value method of accounting for stock based compensation 
plans.  SFAS 123 allows companies to either measure stock based 
compensation using the fair value method, or to continue to apply existing 
accounting standards and include footnote disclosure of pro forma net income 
and earnings per share calculated as if the fair value had been applied.  Stock 
options outstanding at September 30, 1996 are not subject to the requirements 
of SFAS 123 since the option grant date is prior to the effective date of 
the pro forma disclosure.  The Company expects to continue to apply existing 
accounting standards for stock based compensation and to include disclosure 
required by SFAS 123 for stock options granted in the future. 
 
Statement of Financial Accounting Standards No. 128, Earnings per Share 
(SFAS 128), was issued in February 1997 and is effective for the Company for 
the quarter ending December 31, 1997.  SFAS 128 requires presentation of 
earnings per share based on a basic computation and a diluted computation.  
The basic computation divides net income by only the weighted average 
number of common shares outstanding for the year and the diluted computation 
gives effect to all dilutive potential common shares that were outstanding 
during the year.  Had the Company used the provisions of SFAS 128 in 
computing earnings per share for the year ended September 30, 1997, the 
Company would have reported basic earnings per share of $0.52 and diluted 
earnings per share of $0.48. 
 
Statement of Financial Accounting Standards No. 130, Reporting 
Comprehensive Income (SFAS 130) was issued in June 1997 and is effective 
for the Company for the fiscal year beginning October 1, 1998.  SFAS 130 
establishes standards for reporting and displaying comprehensive income and 
its components in a full set of general-purpose financial statements.  The 
Company does not expect any material changes to its current reporting format 
in response to SFAS 130. 
 
10
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

Statement of Financial Accounting Standards No. 131, Disclosure about 
Segments of an Enterprise and Related information (SFAS 131) was issued in 
June 1997 and is effective for the Company for the fiscal year beginning 
October 1, 1998.  SFAS 131 establishes standards for reporting operating 
segments by  
public business enterprises in annual financial statements and requires that 
those enterprises report selected information about operating segments in 
interim financial reports issued to shareholders.  SFAS 131 also establishes 
standards for related disclosures about products and services, geographic 
areas, and major customers.  The Company does not expect any significant 
changes to its current reporting format in response to SFAS 131. 
 
 
(2)  Investment Securities Held to Maturity 
Investment securities held to maturity consist of the following: 
 
                       Amortized      Unrealized   Unrealized
                         Cost           Gains        Losses     Fair Value 
                      -----------------------------------------------------
 
September 30, 1997:   
   
 U.S. Government 
 agencies            $  1,500,000        -           28,191     1,471,809       
 Mortgage-backed 
 securities and SBA's   7,314,453       89,112         -        7,403,565 
 State and municipal      570,000        -            3,517       566,483 
 Corporate bonds          250,000        -             -          250,000 
                      ----------------------------------------------------
                     $  9,634,453       89,112       31,708     9,691,857 
                      ====================================================

September 30, 1996: 
 
 U.S. Government 
 agencies            $  5,500,683        3,107       80,131     5,423,659 
 Mortgage-backed 
 securities and SBA's   3,704,854       64,441       81,000     3,688,295 
 State and municipal      870,000          -          3,210       866,790 
 Corporate bonds          250,000          -         20,000       230,000 
                      ----------------------------------------------------
                     $ 10,325,537       67,548      184,341    10,208,744 
                      ====================================================
 
A summary of investment and mortgage-backed securities by maturity as of 
September 30, 1997 are shown below.  The entire principal amount of 
mortgage-backed securities is shown in the year of contractual maturity.  
Expected maturities will differ from the maturities shown because borrowers 
have the right to prepay obligations without prepayment penalties, and 
principal is paid down over the contractual life of the mortgage-backed 
securities. 
 
 
                                            Amortized Cost    Fair Value 
                                          ---------------------------------- 
Within 1 year                            $   1,600,000        1,571,606 
After 1 year through 5 years                   480,611          484,125 
After 5 years through 10 years               1,102,271        1,113,487 
After 10 years                               6,451,571        6,522,639 
                                          ----------------------------------
                                         $   9,634,453        9,691,857 
                                          ==================================
 
The Company did not sell any investments during 1997, 1996,  or 1995. 
 
 
At September 30, 1997 and 1996,  the Company had pledged approximately 
$7,735,000 and $8,245,000, respectively, of its securities to government and 
municipal depositors. 

11
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
 
(3)  Loans Receivable 
Loans receivable at September 30, are summarized as follows: 
 
 
 
 
                                                  1997              1996 
                                             ------------------------------
Real estate mortgage loans                  $  102,419,019      94,679,525 
Real estate construction loans                  16,996,563      11,417,553 
Consumer loans                                  10,383,515       9,447,481 
Commercial and other loans                       9,137,932       7,891,541 
                                              -----------------------------
 
                                               138,937,029     123,436,100 
 
Less: 
 
Deferred loan origination fees and costs - net     (12,921)         17,264 
Unearned interest income                            72,995          32,079 
Allowance for loan losses                        1,012,322         955,288 
                                              -----------------------------
                                             $ 137,864,633     122,431,469 
                                              =============================

An analysis of the activity in the allowance for loan losses is as follows: 
 
 
                                      1997            1996             1995 
                                    ---------------------------------------- 
Balance at beginning of year       $     955,288      1,003,569      983,058 
Provision for loan losses                309,679         48,104      214,142 
Recoveries                                95,571        112,901       84,482 
Chargeoffs                              (348,216)      (209,286)    (278,113) 
                                    ----------------------------------------
Balance at end of year             $   1,012,322        955,288    1,003,569 
                                    ======================================== 
 
As of September 30, 1997 and 1996, outstanding loan commitments, exclusive 
of the undisbursed portion of loans in process amounted to approximately 
$243,000 and $142,000 respectively, with variable interest rates and 
approximately $316,000 and $739,000, respectively, in fixed interest rates.  
The Bank is also committed to extend standby letters of credit amounting to 
approximately $636,000  and $622,000, respectively, at September 30, 1997 
and 1996.  In addition, customers of the Bank have the ability to borrow 
approximately $954,000 and $992,000, respectively at September 30, 1997 and 
1996, under existing credit card agreements.  It is the opinion of management 
that such commitments do not involve more than the normal risk of loss. 
 
At September 30, 1997 and 1996, the Bank had nonaccrual loans aggregating 
approximately $1,959,000 and $1,951,000, respectively.  The effects of 
carrying nonaccrual loans during 1997, 1996, and 1995 resulted in a reduction 
of interest income of approximately $49,000, $93,000, and $91,000,  
respectively. 
 
12
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

(3)  Loans Receivable (Cont'd) 
Impaired loans totalled approximately $366,000 and $447,000 at September 30, 
1997 and 1996, respectively.  Based upon the fair value of the related 
collateral there is no specific allowance required on these impaired loans.  
The interest income recognized on impaired loans for the years ended 
September 30, 1997 and 1996 was approximately $8,000 and $17,000,  which was 
recorded on a cash basis. 
 
At September 30, 1997 and 1996, the Bank had no loans held for sale. 
 
The Bank has direct and indirect loans outstanding to certain directors and 
executive officers.  All of these loans were made in the ordinary course of 
business on substantially the same terms, including interest rate and 
collateral, as those prevailing at the time for comparable transactions 
with other persons, and did not involve more than the normal credit risk 
or present other unfavorable features.  The following is a summary of such 
loans outstanding and the activity in these loans for 1997:  
  
Balance at September 30, 1996            $            5,462,436 
 
Repayments                                           (6,712,607) 
 
New borrowings                                        6,289,703 
                                          -------------------------
Balance at September 30, 1997            $            5,039,532 
                                          =========================
 
As of September 30, 1997, 1996, and 1995, the Bank was servicing loans for 
others aggregating approximately $2,308,000, $2,003,000, and $7,346,000, 
respectively.  
 
(4)  Premises and Equipment 
Premises and equipment at September 30 are summarized as follows: 
 
                                             1997                     1996  
                                            --------------------------------
Land                                       $    641,681            730,464 
Buildings and improvements                    2,008,109          2,144,940 
Building under capital lease                    401,931            372,902 
Leasehold improvements                          197,674            177,851 
Construction in process                          86,427               -        
Furniture, equipment, and automobiles         2,547,004          2,276,280 
                                            ------------------------------- 
                                              5,882,826          5,702,437 
Less accumulated depreciation and 
amortization                                  2,701,208          2,367,558 
                                            -------------------------------
Premises and equipment, net                $  3,181,618          3,334,879 
                                            ===============================
 
13
<PAGE> 
 
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

(5)  Accrued Interest Receivable 
Accrued interest receivable at September 30 is summarized as follows: 
 
                                                    1997          1996        
                                             -----------------------------   
Loans                                       $     887,325         768,080 
Investment securities                              16,845          51,913 
Mortgage-backed securities                         55,991          32,639 
                                             ----------------------------- 
                                            $     960,161         852,632 
                                             =============================  
 
(6)  Deposits  
Deposits are summarized at September 30 as follows: 
 
                                  1997                           1996         
                         -------------------------------------------------
                                       Weighted                  Weighted
                                        Average                   Average
                         Balance         Rate       Balance        Rate
                         ------------------------------------------------
 
Non-interest demand 
deposits                $  5,992,232        -         6,266,901        -       
Negotiable orders of 
withdrawal                11,429,277        1.25%    11,598,046       1.25% 
Money market deposit 
accounts                   4,756,047        2.35%     2,410,008       2.35% 
Savings deposits           4,319,817        2.30%     4,564,993       2.30% 
Certificates of deposits: 
   Certificates less than 
   $100,000              84,492,890         5.90%    78,416,333       6.12% 
    Jumbo certificates   18,899,673         6.10%    18,298,176       4.48% 
                        -------------------------------------------------- 
                       $129,889,936         4.97%   121,554,457       4.49% 
                        ==================================================
 
Interest expense on deposits is summarized below: 
 
 
 
                                          1997         1996          1995 
                                  -----------------------------------------
 
Negotiable orders of withdrawal  $       142,967       219,520     329,557 
Money market deposit accounts             73,629        60,966      86,840 
Savings deposits                          96,646       108,398     132,734 
Certificates deposits: 
   Certificates less than $100,000     4,837,654     4,382,380   4,114,455 
   Jumbo certificates                  1,049,195       930,813     710,217 
Less: 
   Early withdrawal penalties             24,395        19,747      28,350 
                                 ------------------------------------------
                                $      6,175,696      5,682,330  5,345,453 
                                 ==========================================
 
At September 30, 1997, the rates on deposits were as follows: 
 
	Negotiable orders of withdrawal		               1.25  % 
	Money market deposit accounts		                 2.35 
	Savings deposits			                             2.30 
	Time deposits				                               2.75 - 6.25 
	

14
<PAGE>

 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

(6)  Deposits (cont'd) 
As of September 30, 1997, and 1996, the Bank had no brokered deposits. 
 
The amount and maturities of certificates of deposits at September 30, 1997 are 
as follows: 
	 
Year ending September 30,                 Amount 
---------------------------             ----------------- 
 
        1998                           $  88,646,925 
        1999                              10,168,031 
        2000                               2,430,050 
        2001                               1,262,357 
        2002                                 866,040 
     After 2002                               19,160 
                                        ------------------
                                       $ 103,392,563 
                                        ==================
 
(7)  Federal Home Loan Bank Advances 
Advances from the Federal Home Loan Bank at September 30 are summarized 
as follows: 
 
                                     1997                            1996 
                                   ----------------------------------------
 
Due during year ending                     Weighted              Weighted
    September 30,                 Amount  Average Rate  Amount Average Rate 
---------------------------------------------------------------------------- 
 
         1997                    $   -        -         4,000,000  7.08% 
  
         1998                     7,750,000   5.90%     4,500,000  5.83% 
  
         1999                     2,100,000   6.19%     2,100,000  6.19% 
  
         2000                     3,000,000   6.77%         -        - 
 
         2001                       500,000   7.90%       500,000  7.90% 
 
         2002                     1,000,000   5.66%          -       - 
                                 -----------------------------------------
                                $14,350,000   5.79%    11,100,000  6.44% 
                                 =========================================
 
The Bank has the ability to borrow additional funds from the Federal Home 
Loan Bank.  The advances and any future borrowings are collateralized by 
certain qualifying real estate loans under a security agreement with the 
Federal Home Loan Bank.  Additionally, all stock of the Federal Home Loan 
Bank is pledged as collateral for the advances. 
 
(8)  Stockholders' Equity and Regulatory Matters 
The Bank is subject to various regulatory capital requirements administered by 
the federal banking agencies.  Failure to meet minimum capital requirements 
can initiate certain mandatory, and possible additional discretionary, 
actions by regulators that, if undertaken, could have a direct material 
effect on the Bank's financial statements.  Under capital adequacy 
guidelines and the regulatory framework for prompt corrective action, the 
Bank must meet specific capital guidelines that involve quantitative 
measures of the Bank's assets, liabilities, and certain off-balance-sheet 
items as calculated under regulatory accounting practice.  The Bank's 
capital amounts and classification are also subject to qualitative 
judgements by the regulators about components, risk weightings, 
and other factors.

15
<PAGE>
 
(8)  Stockholders' Equity and Regulatory Matters (Cont'd) 
Quantitative measures established by regulation to ensure capital adequacy 
require the Bank to maintain minimum capital amounts and ratios (set forth in 
the table below).  The Bank's primary regulatory agency, the OTS, requires the 
Bank to maintain minimum ratios of tangible capital (as defined in the 
regulations) of 1.5%, core capital (as defined) of 4%, and total risk-based 
capital (as defined) of 8%.  The Bank is also subject to prompt corrective 
action requirements set forth by the FDIC.  The FDIC requires the Bank to 
maintain minimum total and Tier 1 capital (as defined in the regulations) 
to risk-weighted assets (as defined), and Tier 1 capital (as defined) to 
average assets (as defined).  Management believes, as of September 30, 1997, 
that the Bank meets all capital adequacy requirements to which it is subject. 
 
As of December 31, 1996, the most recent notification from the OTS, the Bank 
was categorized as "Well Capitalized" under the regulatory framework for 
prompt corrective action.  To be categorized as "Well Capitalized," the Bank 
must maintain minimum tangible, core, and risk-based capital ratios of at least 
6%, 5%, and 10%, respectively. There are no conditions or events since that 
notification that management believes have changed the institution's category. 
 
                                                              To Be Categorized
                                                               "Well Captalized"
                                           For Capital           Under Prompt
                               Actual   Adequacy Purposes    Corrective Action 
                                        (For OTS Purposes)         Provisions
                      ----------------------------------------------------------
As of September 30, 1997  Amount   Ratio  Amount      Ratio    Amount   Ratio 
 
Tangible Capital    $  12,216,000  7.70%  $2,379,000  1.50%      N/A     N/A 
Core Capital           13,246,000  8.30%   6,385,000  4.00%      N/A     N/A 
Total risk-based capital 
 (to risk-weighted 
  assets)              14,258,000 10.10%  11,295,000  8.00% $14,118,000 10.00% 
Tier 1 risk-based 
 capital (to risk-
 weighted assets)      13,246,000  9.38%      N/A      N/A    8,471,000  6.00% 
Tier 1 leverage 
 capital (to 
 average assets)       13,246,000  8.64%      N/A      N/A    7,666,000  5.00% 
 
 
 
                                                               To Be Categorized
                                                             "Well Capitalized" 
                                                                 Under Prompt   
                                               For Captial    Corrective Action
                           Actual           Adequacy Purposes     Provisions
                                            (For OTS Purposes) 
                     -----------------------------------------------------------
As of 
 September 30, 1996    Amount      Ratio  Amount     Ratio   Amount   Ratio 
 -----------------------------------------------------------------------------
 
Tangible Capital    $ 10,619,000  7.31%  $  2,180,000  1.50%   N/A     N/A 
Core Capital          11,896,000  8.12%     5,863,000  4.00%   N/A     N/A 
Total risk-based 
 capital (to risk-
 weighted assets)     12,851,000  10.51%    9,780,000  8.00% $12,225,000 10.00% 
Tier 1 risk-based 
 capital (to risk-
 weighted assets)     11,896,000   9.73%       N/A      N/A    7,335,000  6.00% 
Tier 1 leverage 
 capital (to 
 average assets)     11,896,000   8.54%       N/A      N/A    6,961,000  5.00% 
 
16

<PAGE>
 
 
(8)  Stockholders' Equity and Regulatory Matters (Cont'd) 
The following is a reconciliation of capital for the Bank under generally 
accepted accounting principles (GAAP) to regulatory capital: 
 
 
 
 
 
As of September 30, 1997      Tangible            Core          Risk-Based
                               Capital            Captial         Capital
                          --------------------------------------------------
 
GAAP capital             $ 13,246,000         13,246,000        13,246,000 
 
General allowance for 
loan losses                   -                   -              1,012,000 
 
Intangible assets          (1,030,000)            -                  -    
                          --------------------------------------------------
Regulatory capital         12,216,000         13,246,000         14,258,000 
 
Minimum capital requirement 2,379,000          6,385,000         11,295,000 
                          --------------------------------------------------
Regulatory capital 
 excess                  $  9,837,000          6,861,000          2,963,000 
                          ==================================================
 
As of September 30, 1996 
 
GAAP capital             $ 11,896,000         11,896,000         11,896,000 
 
General  allowance for 
loan losses                   -                   -                 955,000 
 
Intangible assets          (1,277,000)            -                    -        
                          -------------------------------------------------- 
Regulatory capital         10,619,000         11,896,000         12,851,000 
 
Minimum capital requirement 2,180,000          5,863,000          9,780,000 
                           -------------------------------------------------
Regulatory capital excess $ 8,439,000          6,033,000          3,071,000 
 
 
17

<PAGE> 
 
 
(9) Income Taxes                         
The components of income tax expense (benefit) are as follows: 
 
                              1997             1996                1995 
                           --------------------------------------------------
 
Federal: Current          $   733,530         651,665             742,356 
         Deferred              68,334        (287,279)             29,959 
                           --------------------------------------------------
                              801,864         364,386             772,315 
 
State: Current                 23,768           -                    -        
       Deferred                12,829           -                    -        
                           --------------------------------------------------
                               36,597           -                    -        
                           --------------------------------------------------
                          $   838,461         364,386             772,315 
                           ==================================================
                        
 
The difference between the actual provision for income taxes and income taxes 
computed at the Federal statutory rate of 34% is as follows: 
 
 
 
 
                                1997            1996              1995 
                            -----------------------------------------------
 
Federal taxes at statutory 
 rate                      $  826,923           382,756           696,797 
Increase (decrease) 
 resulting from:               
  State income taxes, net      24,155             -                  -
  Amortization of intangibles   9,530            12,534            10,574 
  Tax exempt income            (7,328)           (7,957)           (8,298) 
  Other, net                  (14,819)          (22,947)           73,242 
                            -----------------------------------------------
                           $  838,461           364,386           772,315 
                            ===============================================

18

<PAGE>
 
 
(9) Income Taxes (cont'd)                         
The tax effects of temporary differences that give rise to significant 
portions of the deferred tax assets and deferred tax liabilities as of 
September 30, 1997 and 1996 are presented below: 
 
                                                1997                1996 
                                   -------------------------------------------
 
Deferred tax assets: 
 Allowance for loan losses        $        295,143                 267,021 
 Deferred loan fees                           -                      6,553 
 Property cost basis differences            32,239                     -        
 Accrued liability                          26,572                     - 
 SAIF assessment accrual                      -                    276,237 
                                   ------------------------------------------
 
 Total gross deferred tax assets           353,954                 549,811 
                                   ------------------------------------------ 
 
 Less valuation allowance                     -                      -       
                                   ------------------------------------------
 
 Net deferred tax assets                  353,954                  549,811 
                                   ------------------------------------------ 
 
 
Deferred tax liabilities: 
 
 Depreciation                              15,037                   71,265 
 FHLB stock dividend                      177,008                  240,379 
 Deferred loan fees                         4,905                     -     
                                   ------------------------------------------
 Total deferred tax liabilities           196,950                  311,644 
                                   ------------------------------------------
 
 Net deferred tax assets          $       157,004                  238,167 
                                   ==========================================
 
Prior to January 1, 1996, under the Internal Revenue Code ("Code") the 
Company was allowed a special bad debt deduction related to additions to tax 
bad debt reserves established for the purpose of absorbing losses.  The 
provisions of the Code permitted the Company to deduct from taxable income 
an allowance for bad debts based on the greater of a percentage of taxable 
income before such deductions or actual loss experience.  Retained earnings at 
September 30, 1997 include approximately $248,000 for which no deferred 
Federal income tax liability has been recognized.  The amounts represent an 
allocation of income for bad debt deductions for tax purposes only.  Reduction 
of amounts so allocated for purposes other than tax bad debt losses or 
adjustments arising from carry back of net operating losses would create 
income for tax purposes only, which would be subject to the then current 
corporate income tax rate. 
 
(10)  Leases 
On September 28, 1987, the Bank entered into a sale-leaseback of one of its 
branches.  The facility has been capitalized and the related obligation is 
recorded in other liabilities in the accompanying financial statements based on 
the present value of future minimum lease payments.  The lease term expires 
August 28, 2007.  Premises and equipment includes buildings under capital 
leases of $401,931 and accumulated amortization of $182,557 and $163,428 at 
September 30, 1997 and 1996, respectively. 
 
19

<PAGE>

(10)  Leases (cont'd) 
The present value of future minimum capital lease payments as of September 
30, 1997, are: 
  
 
Year ending September 30, 
 
 
 
 
1998                                      $   39,348 
 
1999                                          39,348 
 
2000                                          39,348 
 
2001                                          39,348 
 
2002                                          39,348 
 
2003 and later years                         196,740 
                                          -----------
    Total minimum lease payments             393,480 
 
    Less amount representing interest at 10% 147,821 
                                           ----------
    Present value of future minimum 
     capital lease payments               $  245,659 
                                           =========
 
The Bank is obligated under various noncancelable operating leases, primarily 
for operating facilities that expire over the next fifteen years.  The future 
minimum lease payments under these operating leases as of September 30, 
1997 are as follows: 
 
 
Year ending September 30, 
 
1998                             $     25,000 
 
1999                                   25,000 
 
2000                                   25,000 
 
2001                                   25,000 
 
2002                                      685 
                                  ------------
Total future minimum lease 
 payments                        $    100,685 
                                  ===========
 
Total rent expense was approximately $109,000, $75,000, and $16,000 for the 
years ended September 30, 1997, 1996, and 1995, respectively. 
 
 
(11) Sale of Branch 
Effective March 7, 1997, the Bank completed the sale of its Hinesville branch, 
which had deposits of $6,354,840 and net premises and equipment of $162,099.  
This transaction resulted in a gain of $433,760 which is reported separately in 
the accompanying consolidated statement of operations. 
 
(12) Employee Benefit Plans 
Effective October 1, 1992, the Company adopted a 401(k) Profit Sharing Plan, 
(the Plan) which covers substantially all of its employees. The Company 
matches 50% of employee contributions to the Plan, up to 3% of an employee's 
salary.  The Company contributed $29,481, $27,376, and $28,852 to the Plan 
in 1997, 1996, and 1995, respectively. 

20

<PAGE>
 
(12) Employee Benefit Plans (cont'd) 
Effective September 30, 1995, the Company adopted an Employee Stock 
Purchase Plan which covers substantially all of its employees.  Employees pay 
85% of the price at which the Company buys its stock in the open market.  
During 1997 and 1996, approximately 5,710 shares and 6,500 shares, respectively,
were purchased by employees.  As a result of such employee stock purchases, the 
Company incurred employee benefits expense of approximately $9,000 and $11,000 
for the years ended September 30, 1997 and 1996, respectively. 
 
(13)  Stock Option Plan 
The Company has a nonqualified Stock Option Plan (the Option Plan).   The 
Company has reserved 456,408 shares of common stock for issuance under the 
Option Plan.  The following is a summary of activity in the Option Plan for the 
periods indicated. 
 
Such amounts have been adjusted to reflect 50% stock dividends accounted for 
as  3 for 2 stock splits declared in each of fiscal 1997 and 1996. 
 
                                            1997          1996          1995 
                                      ---------------------------------------
Options outstanding at beginning 
 of period                               456,408         523,908      231,408 
Options granted                             -               -         292,500 
Options cancelled                           -               -            -      
Options exercised                           -            (67,500)        -      
                                      ---------------------------------------
Options outstanding at end of period     456,408         456,408      523,908 
                                      =======================================  
 
Option prices per share: 
 
Options granted during period               -              -      $2.89 - 3.18 
Options canceled                            -              -          -
Options exercised                           -        $0.96 - 1.63     - 
Options outstanding at end of period   $1.48 - 3.18  $1.48 - 3.18 $0.96 - 1.63 
 
 
All options issued are exercisable. 
 
(14)  Net Income Per Share 
Net income per share is based on weighted average shares and share 
equivalents of 3,354,499, 3,250,772, and 3,065,851 during the years ended 
September 30, 1997, 1996 and 1995, respectively.  The dilutive effect of stock 
options has been considered in the computation of equivalent shares.  Net 
income per share and weighted average shares and equivalent shares 
outstanding have been retroactively restated to reflect the 50% stock dividends 
accounted for as  3 for 2 stock splits  that occurred during each of  
fiscal 1997 and 1996. 
 
21
<PAGE>

(15)  Condensed Financial Information of First Georgia Holding, Inc. (Parent 
Only) 
First Georgia Holding, Inc., was organized December 16, 1987.  The following 
represents parent company only condensed financial information. 
 
 
                                               September 30, 
Condensed Balance Sheets                   1997                     1996 
                                         --------------------------------- 

Assets                                   
Cash                                    $    24,617                34,447 
Other assets                                 76,883                76,883 
Investment in subsidiary                 13,245,770            11,897,069 
                                         ----------------------------------
Total assets                            $13,347,270            12,008,399 
                                         ==================================
 
Liabilities and Stockholders' Equity 
 
Liabilities                              
 
Other borrowed money                   $    -                      92,000 
Stockholders' Equity 
Common stock                             3,052,319              3,052,319 
Additional paid-in capital               4,223,197              4,223,197 
Retained earnings                        6,071,754              4,640,883 
                                        ----------------------------------
Total liabilities and stockholders' 
 equity                                $13,347,270             12,008,399 
                                        ==================================
 
                                               Years Ended September 30, 
                                       ----------------------------------
Condensed Statements of Operations       1997         1996          1995 
                                       ----------------------------------
Dividends from Bank                   $  260,222    194,000      215,000 
Expenses                                 (15,258)   (19,500)     (27,807) 
Income before equity in undistributed  ---------------------------------- 
 income of Bank                          244,964    174,500      187,183 
 
Equity in undistributed income of Bank 1,348,701    586,866    1,089,895 
                                      -----------------------------------
Net Income                           $ 1,593,665    761,366    1,277,088 
                                      ===================================
 
22

<PAGE> 
 
 
(15)  Condensed Financial Information of First Georgia Holding, Inc. (Parent 
Only) 
 
                                                Year ended September 30, 
 
 
Condensed Statements of Cash Flows     1997         1996          1995 
                                   ----------------------------------------
 
Operating Activities: 
 Net income                       $   1,593,665   761,366      1,277,088 
 Adjustments to reconcile net 
 income to net cash provided by 
 operating activities: 
 Equity in undistributed income 
  of Bank                            (1,348,701) (586,867)    (1,089,895) 
 Decrease in accounts payable            -           -           (79,725) 
                                  ----------------------------------------
 Net cash provided by operating 
  activities                            244,964   174,499        107,468 
                                  ----------------------------------------
 
Financing Activities: 
 Dividends paid on common stock        (162,794) (132,664)       (79,598) 
 Net proceeds from exercise of 
  stock options                           -        85,125           -        
Repayments of other borrowed money      (92,000) (100,000)       (48,000) 
                                 -----------------------------------------
Net cash used in financing 
 activities                            (254,794) (147,539)      (127,598) 
                                 -----------------------------------------
 
Increase (decrease) in cash 
 and cash equivalents                    (9,830)   26,960        (20,130) 
Cash and cash equivalents at 
 beginning of year                       34,447     7,486         27,616 
                                 -----------------------------------------
Cash and cash equivalents 
 at end of year                 $        24,617    34,446          7,486 
                                 =========================================
 
The primary source of funds available to the Company to pay shareholder 
dividends and other expenses is dividends from its Bank.  Regulatory agencies 
impose restrictions on the amounts of dividends that may be declared by the 
Bank and requires maintenance of minimum capital amounts.  At September 
30, 1997, approximately $1,749,000 of retained earnings were available for 
dividend declaration without prior regulatory approval. 
 
 (16)  Commitments and Contingencies 
The Bank is involved in a claim arising in the ordinary course of business.  In 
the opinion of management, the ultimate disposition of this matter will not 
have a material adverse effect on the Bank's or the Company's financial 
position or results of operations. 
 
23

<PAGE>

(17) Fair Value of Financial Instruments 
SFAS 107, Disclosures About Fair Value of Financial Instruments, requires 
disclosure of fair value of financial instruments, whether or not recognized on 
the face of the balance sheet, for which it is practicable to estimate that 
value. In cases where quoted market prices are not available, fair values 
are based on estimates using present value or other valuation techniques.  
Those techniques are significantly affected by the assumptions used, 
including the discount rate and estimates of future cash flows.  In that 
regard, the derived fair value estimates cannot be substantiated by 
comparison to independent markets and, in many cases, could not be realized 
in immediate settlement of the instrument.  These estimates are subjective 
in nature and involve uncertainties and matters of significant judgment and, 
therefore, cannot be determined with precision.  Changes in assumptions 
would significantly affect the estimates.  SFAS 107 excludes certain 
financial instruments and all nonfinancial instruments from its 
disclosure requirements.  Fair value estimates are based on existing on and off-
balance sheet financial instruments without attempting to estimate the value of 
anticipated future business and the value of assets and liabilities that are 
not considered financial instruments.  In addition, the tax ramifications 
related to the realization of the unrealized gains and losses can have a 
significant effect on fair value estimates and have not been considered in 
any of the estimates.  Accordingly, the aggregate fair value amounts 
presented do not represent the underlying value of the Company. 
 
The following methods and assumptions were used by the Company in 
estimating its fair value disclosures for financial instruments. 
 
Cash and due from banks, interest-bearing deposits in other financial 
institutions, accrued interest receivable: The carrying amounts approximate 
those assets' fair values because of their short-terms to maturity. 
 
Investment securities: Fair values for investment securities are based on 
quoted market prices, where available.  If quoted market prices are not 
available, fair values are based on quoted market prices of comparable 
instruments. 
 
Loans: For variable-rate loans that reprice frequently and are of normal credit 
risk, fair values are considered to approximate carrying values.  The fair 
values for all other loans are estimated using discounted cash flow analysis,
using interest rates currently being offered for loans with similar terms to 
borrowers of similar credit quality. 
 
Off-balance sheet instruments: Fair values for the Company's off-balance sheet 
instruments are based on a comparison with terms, including interest rate and 
commitment periods currently being offered in similar agreements, taking into 
account credit worthiness of the counter parties.  The carrying and fair values 
of off-balance-sheet instruments at September 30, 1997, are the same based on 
the fact that the Company generally does not offer lending commitments to its 
customers for long periods and, therefore, the underlying rates of the 
commitments approximate market rates. 
 
Deposits: Fair values for fixed-rate certificates of deposits are estimated 
using a discounted cash flow calculation that considers interest rates 
currently being offered on certificates of similar terms to maturity.  The 
carrying amounts of all other deposits, due to their nature, approximate 
their fair value. 
 
Federal Home Loan Bank advances: Fair values for fixed-rate borrowings from 
the Federal Home Loan Bank are estimated using a discounted cash flow 
calculation that considers interest rates currently being offered on 
advances  of similar terms to maturity.  
 
24

<PAGE>


(17) Fair Value of Financial Instruments (Cont'd) 
The following is a summary of the Company's financial instruments at 
September 30, 1997 and 1996: 
 
                                   1997                            1996 
                         -------------------------  -----------------------
                          Carrying     Estimated       Carrying   Estimated
                           Value       Fair Value        Value    Fair Value
 
Assets 
 
Cash and due from banks  $ 2,985,000   2,985,000      2,956,000   2,956,000 
                          -----------------------     ---------------------
Interest bearing deposits 
 in other financial 
 institutions              1,524,000   1,524,000      2,954,000   2,954,000 
                          -----------------------   -----------------------
Investment securities      9,635,000   9,692,000     10,326,000  10,209,000  
                          -----------------------   -----------------------
Loans                    137,865,000 137,315,000    122,431,000 125,115,000 
                        -------------------------   ----------------------- 
 
Liabilities 
 
 Deposits: 
 
 Noninterest bearing       5,992,000   5,992,000      6,267,000   6,267,000 
                        -------------------------  ------------------------
 Interest bearing demand 
  and savings             20,516,000  20,516,000     18,573,000  18,573,000 
                        -------------------------  ------------------------
 Time certificates      103,393,000  103,997,000     96,715,000  97,988,000 
                        -------------------------  ------------------------
 Federal Home Loan Bank
  advances               14,350,000   14,431,000     11,100,000  11,084,000 
                        -------------------------  ------------------------
  Other borrowed money       -           -               92,000      92,000 
                        ---------------------------------------------------


25

<PAGE>
 
INDEPENDENT AUDITORS' REPORT 
 
 
The Board of Directors and Stockholders					
		 
First Georgia Holding, Inc.						
	 
Brunswick, Georgia							 
							 
We have audited the accompanying consolidated balance sheet of First Georgia 
Holding, Inc. and subsidiary as of September 30, 1997, and the related 
consolidated statements of operations, stockholders' equity, and cash flows for 
year then ended.  These consolidated financial statements are the 
responsibility of the Company's management.  Our responsibility is to 
express an opinion on these consolidated financial statements based on our 
audit.  The consolidated financial statements of the Company for the years 
ended September 30, 1996 and 1995 were audited by other auditors whose 
report, dated November 1, 1996, expressed an unqualified opinion on those 
statements. 
							 
We conducted our audit in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free of 
material misstatement.  An audit includes examining, on a test basis, evidence 
supporting the amounts and disclosures in the consolidated financial 
statements.  An audit also includes assessing the accounting principles used 
and significant estimates made by management, as well as evaluating the 
overall financial statement presentation.  We believe that our audit provides a 
reasonable basis for our opinion. 		 
							 
In our opinion, the 1997 consolidated financial statements present fairly, 
in all material respects, the financial position of First Georgia Holding, 
Inc. and  subsidiary at September 30, 1997, and the results of their 
operations and their cash flows for the year then ended in conformity with 
generally accepted accounting principles.							 
							 
							 
Deloitte & Touche LLP 
 
Jacksonville, Florida							 
November 14, 1997

26

<PAGE>

SELECTED FINANCIAL AND OTHER DATA            
First Georgia Holding, Inc. 
 
Selected consolidated financial data is presented below as of and for each 
of the years in the five-year period ended September 30, 1997. 
 
(Dollars in thousands, except per share data) 
 
 
                                   September 30,                           
                    ------------------------------------------------------
                        1997      1996        1995      1994        1993 
                    ------------------------------------------------------
 
Balance 
Sheet 
Data:       
Total 
 Assets            $   159,699    146,915    132,742    133,870    133,105 
Loans receivable, 
 net               $   137,865    122,431    110,432    113,579    113,420 
Total Investments  $     9,635     10,326      9,181      7,511      7,070 
Deposits           $   129,890    121,554    106,528    103,407    106,736 
Borrowings         $    14,350     11,192     12,140     17,988     15,748 
Stockholders' 
 equity            $    13,347     11,916     11,125      9,927      8,899 
Book value per 
 share             $      4.37       3.90       3.73       3.33       3.00 
Number of shares  
 outstanding         3,052,319  3,052,319  2,984,819  2,984,819  2,968,068 
 
 
                                               Years  Ended September 30, 
                              ---------------------------------------------
Income Statement Data:        1997       1996       1995      1994     1993 
                              ---------------------------------------------
Interest income              $ 12,784   11,794     11,626   10,213   10,807 
Interest expense                6,939    6,549      6,407    5,544    6,039
                              --------------------------------------------- 
Net interest income             5,845    5,245      5,219    4,669    4,768 
Provision for loan losses         310       48        214       39      171 
Other Income                    1,619    1,004      1,268    1,198    1,051 
Other expense                   4,722    4,347      4,224    4,241    4,551 
SAIF special assessment           -        727        -        -        -      
                              ---------------------------------------------
Income before taxes             2,432    1,127      2,049    1,587    1,097 
Income tax expense                838      364        772      525      435 
                              ---------------------------------------------
Income before cumulative 
 effect of a change in 
 accounting principle           1,594      763      1,277    1,062      662 
Cumulative effect of a 
 change in accounting 
 principle                        -         -         -        -        216 
                              --------------------------------------------- 
Net Income                   $  1,594      763      1,277    1,062      878 
                              =============================================  
Income per share before 
 cumulative effect of a 
 change in accounting 
 principle                   $   0.48     0.23       0.42     0.35     0.22 
Cumulative effect of a 
 change in accounting 
 principle                        -        -          -         -      0.08 
                              ---------------------------------------------
Net Income per share         $   0.48     0.23       0.42     0.35     0.30 
                              =============================================
 
 
                                     At or For Years  Ended September 30, 
                              ---------------------------------------------  
Other Data:                    1997      1996       1995      1994    1993 
                              --------------------------------------------- 
Net income to average assets   1.04%     0.87%      0.95%     0.79%    0.64% 
Net income to average equity  12.55%    10.32%     11.88%    11.04%   10.36% 
Average equity to average 
 assets                        8.28%     8.40%      8.01%     7.41%    6.53% 
Number of full-service offices    7         8          6         7        7 
 
 
27

<PAGE>

 
General 
First Georgia Holding, Inc. (the Company) was organized in 1987 to acquire 
the outstanding common stock of First Georgia Bank, F.S.B. (the Bank or First 
Georgia).  On April 30, 1988, the Company became the sole shareholder of the 
Bank and issued its stock to the former Bank shareholders.  Management's 
Discussion and Analysis which follows, relates primarily to the Bank since the 
Company has not had material operations since it was organized. 
  
First Georgia's net income depends on (a) its net interest income, which is the 
difference between its interest income from loans and investments and its 
interest expense on deposits and borrowings, (b) its non-interest income, which 
consists principally of fee income generated by First Georgia's retail banking 
operations, and (c) its non-interest expenses, such as employee salaries and 
benefits.  Interest income on loans and investments (yield) is a function of 
the average balances outstanding during the period and the average rates 
earned.  Interest expense (cost of funds) is a function of the average 
amount of deposits and borrowings outstanding during the period and average 
rates paid on such deposits and borrowings.  Retail banking fee income, 
consisting mainly of recurring fees collected for deposit-related services 
rendered by the Bank, varies with the volume of the Bank's retail banking 
business.  Non-interest expenses vary primarily with the number of employees,
expansion of facilities and inflation. 
 
The Company has begun an internal evaluation of the Company's computer 
information systems and has identified the systems which will require program 
modifications or new software installations in order to be "Year 2000" 
compliant.  The Company expects to incur costs over the next three years as the 
Company addresses these problems.  Costs to modify existing information 
systems to be Year 2000 compliant will be expensed as incurred and costs 
related to new software or hardware installation will be capitalized. 
 
Capital Resources 
The following is a reconciliation at September 30, 1997 of the Bank's capital 
under generally accepted accounting principles to regulatory capital. 
                                   
               
First Georgia Bank 
 
Stockholders' Equity               $  13,246,000 
Less: 
   Intangible Assets                   1,030,000
                                    ------------- 
   Tangible Capital                   12,216,000 
Plus:                               -------------
   Qualifying intangible assets        1,030,000 
                                    -------------
   Core Capital                       13,246,000 
                                    -------------
Plus: 
   General allowance for loan losses   1,012,000
                                    ------------- 
   Risk-based Capital              $  14,258,000  
                                    =============
 
Current regulations require financial institutions to have minimum regulatory 
tangible capital equal to 1.5% of adjusted assets, minimum core capital to 
adjusted assets of 4% (the leverage ratio), and risk-based capital to risk-
adjusted assets of 8.0%.  The minimum core capital or leverage ratio also may


28

<PAGE>

 
be increased by the Office of Thrift Supervision (the OTS) based on its 
assessment of the institution's risk management systems and the level of 
overall risk in the individual institution.  At September 30, 1997, the 
Bank was in compliance with its minimum capital requirements. 
 
The Bank's regulatory capital and the required minimum amounts, at 
September 30, 1997, are summarized in the following table. 
 
                                       Required Minimum     
                      Bank Capital          Amount        Excess(Deficiency) 
                      ------------     -----------------  ------------------  
                       %      $           %       $          %       $
                      -----  -----     -----  ----------  -------  ---------
Tangible Capital      7.70  12,216,000 1.50   2,379,000    6.20    9,837,000 

Core Capital          8.30  13,246,000 4.00   6,385,000    4.30    6,861,000 
 
Risk-Based Capital   10.10  14,258,000 8.00  11,295,000    2.10    2,963,000 
 
As of September 30, 1997, the Bank exceeded all the required minimum capital 
amounts as demonstrated by the chart above.  The Bank had strong earnings 
during the year which helped to strengthen its capital position. 
 
The Federal Deposit Insurance Corporation Improvement Act (FDICIA) 
requires Federal banking agencies to take "prompt corrective action" with 
respect to institutions that do not meet minimum capital requirements.  In 
addition  to the ratios described above, FDICIA introduced an additional 
capital measurement, the Tier 1 risk-based capital ratio.  The Tier 1 ratio 
is the ratio of Tier 1 or core capital to total risk-adjusted assets.  
FDICIA establishes five 
capital tiers:  "well capitalized," "adequately capitalized," 
"undercapitalized," "significantly undercapitalized," and "critically 
undercapitalized."  The five capital tiers established by FDICIA and the 
regulator's minimum requirements for each are summarized below. 
 
	                                Total      			 Tier 1 
					                            Risk-Based  	  Risk-Based 
					                            Capital Ratio 	Capital Ratio  Leverage Ratio 
                                 -------------  -------------  --------------
Well capitalized				              10% or above		6% or above	    5% or above 
 
Adequately capitalized			          8% or above		4% or above	    4% or above 
 
Undercapitalized			              Less than 8%		 Less than 4%    Less than 4% 
 
Significantly undercapitalized		 Less than 6%		 Less than 3%	   Less than 3% 
 
Critically undercapitalized		         -			           -          2% or less 
 
An institution may be deemed to be in a capitalization category lower than is 
indicated by its capital position based on safety and soundness considerations 
other than capital levels.  
 
At September 30, 1997, the Bank's total risk-based ratio, tier 1 risk-based 
ratio and leverage ratio were 10.10%,9.38%, and 8.64%, respectively, 
placing the Bank in the well capitalized category under FDICIA  for each 
ratio.

29

<PAGE>    
  
Liquidity 
First Georgia has traditionally maintained levels of liquidity in excess of 
levels required by regulatory authorities.  As a member of the Federal Home 
Loan Bank system, the Bank is required to maintain a daily average balance 
of cash and eligible liquidity investments in an amount equal to a monthly 
average of 5% of withdrawable savings and short term borrowings.  The Bank's 
liquidity level was 4.38% and 3.94% at September 30, 1997 and 1996, 
respectively.  
 
The Bank's operational needs, demand for loan disbursements and savings 
withdrawals can be met by loan principal and interest payments, new deposits 
and excess liquid assets.  While significant loan demand, deposit withdrawal, 
increased delinquencies and increased foreclosed properties could alter this 
condition, the Bank has sufficient borrowing capacity through Federal Home 
Loan Bank advances and other short term borrowings to manage such an 
occurrence.  Management does not foresee any liquidity problems for fiscal 
1998. 
 
Asset/Liability Management 
First Georgia has implemented a program of asset/liability management to limit 
the Bank's vulnerability to material and prolonged increases in interest rates 
(interest rate risk).  The principal determinant of the exposure of the Bank's 
earnings to interest rate risk is the difference in the time between interest
rate adjustments or maturities on interest-earning assets and interest rate 
adjustments or maturities of interest-bearing liabilities.  If the maturities
of the Bank's assets and liabilities were perfectly matched and if the 
interest rates earned on its assets and paid on its liabilities moved 
concurrently, which is not the case, the impact on net interest income of 
rapid increases or decreases in interest rates would be minimized.  The 
Bank's asset/liability management policy seeks to increase the adjustability 
of the interest rates earned on its assets and paid on its liabilities and 
to match the maturities of its interest-earning assets and interest-bearing 
liabilities so that the Bank will be able to restructure and reprice its 
asset portfolio in a relatively short period to correspond to 
changes in its cost and flow of funds.  The Bank's policy also seeks to 
encourage the flow of deposits into longer term certificates during periods of 
lower interest rates and to emphasize shorter term accounts during periods of 
high rates.  During fiscal 1997, the Bank actively managed its interest rate 
risk by limiting its lending to short-term fixed rate balloon notes or 
adjustable rate loans and shortening the maturity on its deposits. 
 
It is a policy of First Georgia not to originate for its own portfolio any long 
term fixed rate mortgage loans.  This allows First Georgia to better match the 
maturities of its assets and liabilities, thereby limiting interest rate risk.  
Similarly, the Bank emphasizes the origination of commercial real estate loans, 
construction loans, consumer loans and commercial loans with either adjustable 
rates or short maturities. 
 
The interest rate sensitivity of the Bank's assets and liabilities provides an 
indication of the extent to which the Bank's net interest income may be 
affected by interest rate movements.  The concept of interest rate 
sensitivity recognizes that certain assets and liabilities have interest 
rates that are subject to change prior to maturity.  One method of measuring 
the impact of interest rate changes on net interest income is to measure, in 
a number of time frames, the interest sensitivity gap by subtracting interest
rate sensitive liabilities from interest rate sensitive assets.  A gap is 
considered positive when the amount of interest rate sensitive assets 
exceeds the amount of interest rate sensitive liabilities, and is 
considered negative when the amount of interest rate sensitive liabilities 
exceeds the amount of interest rate sensitive assets.  Generally, during a 
period of rising interest rates, a negative gap would adversely affect net 
interest income while a positive gap would result in an increase in net 
interest income, while conversely during a period of falling interest rates, 
a negative gap would result in an increase in net interest income and a 
positive gap would negatively affect net interest income.  To the extent 
that the gaps are close to zero, net interest income can be considered to 
be relatively immune from interest rate movements.  The following table sets 
forth the Bank's interest-earning assets and interest-bearing liabilities at 
September 30, 1997.  The information presented, however, may not be 
indicative of actual future trends of net interest income in rising or 
declining interest rate environments. 
 
30 
 
<PAGE> 

                                                 (in thousands) 
                                Over One    Over Five    Over Ten      Over
                     One Year   Through      Through     Through      Twenty
                      or Less  Five Years   Ten Years   Twenty Years   Years 
                    --------------------------------------------------------
Interest-earning 
 assets (IEA's): 
Investments        $   3,276    2,992         897           -          2,470 
Interest earning 
 deposits              1,523      -            -            -            -    
Loans                 97,904   33,939       1,613         3,246        2,235 
                   ---------------------------------------------------------- 
Total                102,703   36,931       2,510         3,246        4,705 
                   ----------------------------------------------------------
 
Interest-bearing 
 liabilities 
 (IBL's): 
Demand deposits  $   11,429       -           -             -            -     
Savings deposits      9,076       -           -             -            - 
Other time deposits  88,647    14,726         19            -            -    
Debt                  7,750     6,600         -             -            -     
                  ----------------------------------------------------------
Total               116,902    21,326         19            -            -     
                  ----------------------------------------------------------
 
Interest 
 sensitivity gap $ (14,199)    15,605      2,491         3,246        4,705 
                  ==========================================================
Cumulative gap   $ (14,199)     1,406      3,897         7,143       11,848 
                  ==========================================================
Ratio of IEA's 
 to IBL's             0.88       1.73     132.11           -            -    
                  ========================================================== 
 
Cumulative ratio  
 of IEA's to IBL's   0.88        1.01       1.03           1.05        1.09 
                  ==========================================================
 
COMPARISON OF YEARS ENDED SEPTEMBER 30, 1997 AND 1996 
 
					Results of Operations 
 
General 
First Georgia Holding, Inc. reported net income of $1,593,665, an increase of 
$832,299.   This increase is due primarily to the increase in interest income
of $990,016.   Net interest income after provision for loan losses increased 
a total of $338,968.  Other income increased by a total of $638,822, and other 
expenses decreased $328,584. Several factors as discussed below contributed 
the increases and decreases in these areas. 
 
31

<PAGE>

Interest Income 
Total interest income increased $990,016 for the year, or 8.39%.  Interest 
income on loans increased $989,344, or 9.01%, which was the major factor for 
this increase in interest income.  Average loans for the year increased by more 
than $10,000,000 during the year ended September 30, 1997, resulting in 
higher interest income.  Investment income decreased by $6,842 (2.13%) for 
mortgage backed securities and $82,467 (21.82%) for the year ended September 
30, 1997 as compared to the same time last year.  As investments matured, 
much of that money was shifted into the increased loan demand. Because of 
increased deposit balances and the need to fund the sale of the Hinesville 
branch, the Bank maintained high cash balances in its interest-bearing deposit 
accounts.  These higher balances account for an $89,981, or 83.29% increase in 
other interest income. 
 
Interest Expense 
Total interest expense increased $389,473, or 5.95% for the year.  This is 
attributable to an increase in average deposits of over $12,000,000.  The Bank 
experienced substantial deposit growth over the year, which is attributable to 
the offering of competitive interest rates and attractive deposit products 
for the market area.  Interest expense on advances and other borrowings fell 
$103,893, or 11.98%, as several high-interest advances were paid off and 
replaced by much lower-rate advances.  The weighted average yield on advances
dropped by 65 basis points for the year ended September 30, 1997 as compared 
to 1996. 
 
Yields Earned and Rates Paid 
Net interest income is affected by (a) the difference between rates of interest 
earned on interest-earning assets and rates of interest paid on interest-
bearing liabilities (interest rate spread) and (b) the relative amounts of 
interest-earning assets and interest-bearing liabilities.  When interest-
earning assets approximate or exceed interest-bearing liabilities, any 
positive interest rate spread will generate net interest income.  Financial  
institutions have traditionally used interest rate spreads as a measure of 
net interest income. Another indication of an institution's net interest 
income is its "net yield on interest-earning assets" which is net interest 
income divided by average interest- earning assets.  The following table 
sets forth information with respect to weighted average contractual yields 
on loans, yields on investments and the cost of funds on deposits and 
borrowings for and as of the end of the periods indicated. 

32

<PAGE>
 
 
 
                               Year Ended September 30,  At September 30, 
                               --------------------------------------------
                                                (in percentages) 
 
                                1997     1996      1995           1997 
                               --------------------------------------------
Weighted average yield on: 
 Loans                          9.36      9.35      9.77           9.45 
 Investment securities          7.11      7.35      6.22           6.29 
 Interest earning deposits 
  in other banks                5.47      5.89      7.24           4.61 
                               --------------------------------------------
Total weighted average yield 
 on all interest-earning 
 assets                         9.12      9.15      9.46           9.21 
                               --------------------------------------------
 
Weighted average rate paid on:   
 Deposits                       5.18      5.35      4.95           4.57 
 Other borrowings               8.89      8.40      9.14             -    
 Federal Home Loan Bank 
  advances                      
  Short term advances           6.30      7.27      5.90           7.00 
  Long term advances            5.14      6.63      6.82           5.44 
                               ------------------------------------------- 
Total weighted average rate 
 paid on all interest-bearing 
 liabilities                    5.25      5.23      5.29           4.72 
                               -------------------------------------------
 
Weighted average interest rate 
 spread 
(spread between weighted average  
yield on all interest-earning 
assets and rate paid on all 
interest-earning liabilities)  3.87       3.92       4.17          4.49 
                              ============================================
 
Net yield on average interest-
earning assets 
(net interest income as a 
percentage of average 
interest-earning assets)       4.11       4.07       4.04           N/A 
                              ===========================================
 
Provision for Loan Losses 
The provision for loan losses is based on management's evaluation of the risk 
elements inherent in the loan portfolio.  The elements include possible 
declines in the value of collateral due to changing economic conditions and 
depreciation  over time, size and composition of the loan portfolio, 
current economic conditions that might affect a borrower's ability to pay, 
review of impaired loans, findings and recommendations from regulatory 
examinations, historical charge-off experience, and levels of non-performing 
and past due loans.  Management reviews these elements and determines the 
level of allowance for loan losses needed.  The $309,679 provision for loan 
losses recorded in 1997 represents management's desire to maintain a prudent 

33

<PAGE>




level of coverage.  At September 30, 1997, the Bank believes its allowance 
for loan losses is adequate to provide for future losses.  Table 1 sets 
forth an analysis of non-accruing and past due loans as of September 30, 
1995 through 1997 while Table 2 provides an analysis of the allowance for 
loan losses, showing charge-offs and recoveries by type of loan as well as 
the addition to the allowance. 
 
Table 1 
                ANALYSIS OF NON-ACCRUING AND PAST DUE LOANS 
 
 
 
                                                      As of September 30, 
                                       -------------------------------------- 
                                             1997      1996        1995 
                                       --------------------------------------
Non-accruing loans (1)                    
Real Estate 
 Construction                         $       -         -           -        
 First Mortgage                          1,832,123    1,766,929    1,876,110 
 Second Mortgage                            82,517       19,764       82,918 
 Consumer                                   44,781      164,118      101,974 
                                       -------------------------------------
 Total non-accruing loans                1,959,421    1,950,811    2,061,002 
                                       -------------------------------------
Past Due Loans (2) 
Real Estate 
 Construction                         $      -           -             -        
 First Mortgage                              -           -           107,140 
 Second Mortgage                             -           -             -
 Consumer                                    -           -            21,990 
                                       --------------------------------------
Total past due loans                         -           -           129,130 
                                       -------------------------------------- 
Total non-accruing and past due loans $ 1,959,421     1,950,811    2,190,132 
                                       ======================================
 
Percentage of total loans                   1.41%         1.58%        1.98% 
                                       ======================================
Real estate owned                     $   423,000        94,200      206,334 
                                       ======================================
Total non-accruing and past due 
 loans and nonperforming assets       $ 2,382,421     2,045,011     2,396,466 
                                       ======================================
  
(1) Non-accruing loans are loans for which unpaid interest is non recognized 
in income. 
(2) Past due loans are 90 days or more delinquent for which interest is still 
accruing. 
 
34

<PAGE> 
 
 

Table 2 
                   ANALYSIS OF ALLOWANCE FOR LOAN LOSSES 
 
 
 
 
                                               Years Ended September 30, 
                                        -------------------------------------
                                              1997    1996         1995        
                                        -------------------------------------
Beginning balance                      $   955,288    1,003,569     983,058 
 Loans charged off: 
 Real estate construction                    -           -              - 
 Real estate mortgage                      185,696      152,684     177,417 
 Consumer and other                        162,520       56,602     100,696 
                                        ------------------------------------
            Total charge-offs              348,216      209,286     278,113 
                                        ------------------------------------
Recoveries: 
 Real estate construction                     -            -              -
 Real estate mortgage                       32,939       46,547      22,632 
 Consumer and other                         62,632       66,354      61,850 
                                        ------------------------------------
             Total charge-offs              95,571      112,901      84,482 
                                        ------------------------------------
Net charge offs                            252,645       96,385     193,631 
Provision charged to operations            309,679       48,104     214,142 
                                        ------------------------------------
Balance at end of period:              $ 1,012,322      955,288   1,003,569 
                                        ====================================
Ratio of net charge-offs to average
 loans outstanding                         0.20%         0.08%       0.17% 
                                        ====================================
Ratio of allowance to total loans          0.73%         0.77%       0.87% 
                                        ====================================
 
Other Income 
Other income increased $638,822, or 63.63% for the year.  The main factor for 
this increase is the gain on the sale of the Hinesville branch, which netted 
appoximately $434,000.  Loan fees increased $91,049, or 23.78%, for the year 
as loan balances increased.  The Bank is also implementing a new fee structure 
to increase fees to levels currently charged in the market.  Deposit service 
charges increased $133,978, or 24.13% for the year ended September 30, 1997.  
This increase is attributable to an emphasis by Management to collect non-
sufficient funds fees, which increased $123,359.  The increase in deposit 
balances also contributed to the increase. 
 
Other Expenses 
Other expenses decreased $328,584, or 6.48% for the year.  Last year, all 
thrifts had to pay a special assessment to recapitalize the national thrift 


35

<PAGE>


insurance fund.  This assessment cost the Bank $727,704 last year.  Because 
of the special assessment, the Bank's federal insurance premiums were 
significantly lower for the year ended September 30, 1997.  Federal insurance
premiums decreased $143,677, or 56.36%, not including the special assessment.
Personnel expense offset these notable decreases because salary expense 
increased $337,517, or 16.99%.  An increased staff is necessary to handle 
the Bank's rapid growth. Occupancy expense also increased by $111,775, or 
11.73%, for the year due to the opening of the new Wal-Mart supercenter 
branch, which has higher occupancy costs than the Hinesville branch did at 
the time of its sale. 
 
Income Tax Expense 
The Company incurred $838,461 in income tax expense for the year based on 
applicable income tax rates at September 30, 1997. 
 
 
Financial Condition 
 
Total assets of the Company increased $12,783,227 from September 30, 1996 
to September 30, 1997.  Loans were the driving force behind this increase, as 
the net balances grew $15,433,164, or 12.61%.  Loan demand remained strong 
throughout fiscal 1997, and Management took advantage of this demand by 
offering competitive loan  products and exceptional service.  Interest bearing 
deposits in other banks decreased by $1,430,573, or 48.42% for the year ended 
September 30, 1997 as compared to September 30, 1996.  At the end of fiscal 
1996, the Bank was increasing its cash balances to help fund the sale of the 
Hinesville branch, which was sold in March 1997.  Investments decreased by 
$691,084, or 6.69% as investments matured and the funds were used to fund 
loans.  Real estate owned increased $328,800, or 349.04% as of September 30, 
1997.  The Bank was able to foreclose on several pieces of real estate which 
were in nonaccrual status in the year ended September 30, 1996.  The Federal 
Home Loan Bank (FHLB) redeemed $415,400, or 26.36%, of the Bank's FHLB 
stock during fiscal year ended September 30, 1997. 
 
As mentioned previously, total deposits increased $8,335,479, or 6.86%.  This 
increase represents an increase in the local market for deposits, leading to 
more attractive rates for depositors.  With the increase in deposits, the 
Bank was able to pay off some high interest FHLB advances, but due to 
substantial loan demand, the Bank had to increase its outstanding FHLB 
advances by $3,250,000 or 29.28%.  These advances carry a much lower 
interest rate than the maturing advances they replaced.  Other borrowed 
money decreased $92,000 during the year as Management decided to close a 
line of credit held with another institution. 
 
 
COMPARISON OF YEARS ENDED SEPTEMBER 30, 1996 AND 1995 
 
	                   				Results of Operations 
 
General 
First Georgia Holding, Inc. reported net income of $761,366 in 1996, a 
decrease of $515,722.  This decrease is due primarily to the special one time 
SAIF assessment of $727,704. Net income before this one time assessment is 
$1,212,833.  Net interest income after provision for loan losses increased a 
total of $191,592.  Other income decreased by a total of $264,919, and other 
expenses, exclusive of the SAIF assessment, increased $122,620. Several 
factors as discussed below contributed the increases and decreases in these 
areas. 
 
Interest Income 
Total interest income increased $167,579 for the year, or 1.44%.  The major 
portion of this rise in interest income was in loans where interest income from 
loans increased $114,442 or 1.05%.  Average loans increased $1,610,772 
during the  year ended September 30, 1996, resulting in higher interest


36

<PAGE>

 
income. Mortgage-backed securities interest income increased $110,662, or 
52.41% and investment securities income increased by a total of $82,061 or 
27.74%. Because of increased deposit balances and the maturing of some 
investments, the Bank was able to shift funds to higher yielding investments.
These investments carry a variable rate of interest that will tend to move 
slower than other rates.  Management feels that such investments are prudent 
because they tend to protect the Bank from wide interest rate swings.  
Other Interest Income 
decreased by $139,586, or 56.37%, as the Bank shifted funds from its interest 
earning deposits to the higher earning investment securities.  
 
Interest Expense 
Total interest expense increased $142,025, or 2.22% for the year.  The increase 
is attributable to an increase in average deposits of $4,453,923.  In 
anticipation of the sale of the Hinesville branch, the Bank offered 
competitive rates to attract more deposits, which also increased interest 
expense.  Interest expense on advances and other borrowings fell $194,852, 
or 18.35% as the Bank was able to pay down the principal on its line of 
credit by $100,000.  The Bank also paid several advances,  as indicated by 
the drop in the average balance of advances outstanding by $2,577,660. 
 
Other Income 
Other income decreased $264,919, or 20.88% for the year.  The previous year's 
gain from the sale of the Alma Branch, totaling $122,043, was absent this year, 
causing a portion of the decrease.  The Bank opened a new branch in Glynn 
county upon the sale of the Alma office, so the loss of fee income was not 
immediately offset as the new branch gained business.  Consequently, loan fees 
were down $68,358 or 15.15% and deposit fees were down $45,885 or 7.63%.  
The new branch is growing steadily and should soon generate fee income to 
replace that lost on the sale of the Alma branch.   The Bank continued its 
efforts to bank only high quality accounts where non-sufficient fund fees were 
minimal. 
 
Other Expenses 
Other expenses increased $122,620, or 2.90% for the year, not including the 
one time SAIF assessment. The FDIC assessed each thrift institution an amount 
equal to 65.70 basis points of the institutions deposits at March 31, 1995 in 
order to recapitalize the SAIF Insurance Fund.  The assessment charged to this 
institution was $727,704.  The Bank's North Brunswick office opened in late 
October of 1995.  While the branch has seen excellent growth, its income has 
not reached a level to offset the expense incurred in the organization of the 
branch.  Consequently, salaries expense increased $53,926 or 2.79% and net 
occupancy expense increased $48,065 or 5.31%.  Loss on the sale of real estate 
owned was down $17,969 because the Bank was able to keep its foreclosed real 
estate to a minimum for most of the year.  Amortization of intangibles 
decreased by $11,568, or 8.07% resulting from  the write off of the intangible 
associated with the Alma branch, which was sold last year.  The Bank 
continued to look for opportunities to reduce its other operating expenses 
through better management of its people and the use of new technology.  The 
Bank continually examines each phase of its operation for opportunities to 
reduce expenses.   
 
Income Tax Expense 
The Company incurred $364,386 in income tax expense for the year based on 
applicable income tax rates at September 30, 1996. 
 
Financial Condition 
 
Total Assets of the Company increased $14,175,876 from September 30, 1995 
to September 30, 1996.  Loans were the driving force behind this increase, as 
the net balances grew $11,999,236, or 10.87%.  Loan demand remained strong 
throughout fiscal 1996, and Management took advantage of this demand by 
offering competitive loan  products and exceptional service.  Interest bearing 
deposits in other Banks increased $602,167, or 25.60%  during 1996.  An 
increase in deposits caused these short term investments to grow.  Because of 
high cash balances, the Bank increased its investment securities by $1,144,559


37

<PAGE>

or 12.47%.  The objective is to earn a return on this money while protecting 
the Bank from adverse interest rate risk.  The real estate owned decreased 
$112,134, or 54.35%.  This continued decrease in real estate owned is 
representative of Management's commitment to maintain higher quality loan 
business and quick turnaround of its foreclosed property.   
 
As mentioned previously, total deposits increased $15,026,768, or 14.11%.  
This increase represents an increase in the local market for deposits, 
leading to more attractive rates for depositors.  With the increase in 
deposit balances, the Bank was able to decrease its Federal Home Loan Bank 
advances by $848,000 or 7.10%.  Other borrowed money decreased $100,000 
during the year due to increased liquidity. 
 
Effect of Inflation and Changing Prices 
First Georgia's consolidated financial statements and related data presented 
herein have been prepared in accordance with generally accepted accounting 
principles, which require the measurement of financial position and operating 
results in terms of historical dollars, without considering changes in the 
relative purchasing power of money over time due to inflation.  Unlike 
industrial companies, virtually all of the assets and liabilities of a 
financial institution are monetary in nature.  As a result, interest rates 
have a more significant impact on a financial institution's performance than 
the effects of general levels of inflation.  Interest rates do not 
necessarily move in the same direction or in the same magnitude as the 
prices of goods and services.  Non-interest expenses, however, do reflect 
general levels of inflation. 
 
Shareholder Information 
A limited trading market has developed in the Company's common stock which 
is quoted on the NASDAQ (National Association of Securities Dealers 
Automated Quotation) National Market System under the symbol "FGHC."  Set 
forth below are the high and low sales prices of the Company's common stock 
for each full quarterly period since October 1992.  Such prices reflect inter-
dealer prices, without retail mark-up, mark-down, or commission, and may not 
represent actual transactions. 
  
Quarterly Period 
                                                High           Low 
October 1 - December 31, 1995                    8 1/8          5 3/4
 
January 1 - March 31, 1996*                      7 5/8          5 3/4
 
April 1 - June 30, 1996                          7 1/4          6 
 
July 1 - September 30, 1996                      7 1/4          6 
 
October 1 - December 31, 1996                    9 1/4          6 1/4
 
January 1 - March 31, 1997**                     7 5/8          7 
 
April 1 - June 30, 1997                          8 3/8          7 
 
July 1 - September 30, 1997                      9 3/4          7 
 
 
*On February 29, 1996, the Company effected a 50% stock dividend in the 
form of a 3 for 2 stock split. 
 
**On February 28, 1997, the Company effected a 50% stock dividend in the 
form of a 3 for 2 stock split. 
 
At November 1, 1997, the Company had 257 shareholders of record.  The 
Company paid cash dividends of $0.053 per share in December 1996 and $0.043 
per share in December 1995.  The primary source of funds available to the 
Company is the payment of dividends by the Bank.  Banking regulations limit 
the amount of dividends that may be paid without prior approval of the Bank's 
regulators.  Approximately $1,749,000 was available to be paid as dividends by 
the Bank to the Company at September 30, 1997 upon regulatory approval. 


38

<PAGE>

 
OFFICES 
 
 
1703 Gloucester Street 
Brunswick, Georgia 31520 
912-267-7283 

4510 Altama Avenue 
Brunswick, Georgia 31520 
912-267-0010 
 
 
2461 Demere Road 
St. Simons Island, Georgia 31522 
912-638-7118	 

129 Highway 82, East 
Blackshear, Georgia 
912-449-4711 
 
2001 Commercial Drive South 
Brunswick, Georgia 31525 
912-262-1500	 

Wal-Mart Supercenter 
150 Altama Connector 
Brunswick, Georgia 31525 
912-280-9020 
 
1010 Plant Avenue 
Waycross, Georgia 31501 
912-287-2265 
 
 
 
 
 
OTHER INFORMATION 
 
 
Transfer Agent: 
 
First Georgia Bank 
1703 Gloucester Street 
Brunswick, Georgia 31520 
Independent Auditors: 
 
Deloitte & Touche LLP 
Suite 2801, Independent Square 
One Independent Drive 
Jacksonville, Florida 32202 
 
 
Legal Counsel: 
 
James A. Bishop 
Suite 40 
First Federal Plaza 
Brunswick, Georgia 31520 
Special Counsel: 
 
Powell, Goldstein, Frazer & Murphy 
Sixteenth Floor 
191 Peachtree Street, N.E. 
Atlanta, Georgia 30303 
 
 
39

<PAGE>

 
 
DIRECTORS AND OFFICERS 
 
 
FIRST GEORGIA HOLDING, INC. 
 
OFFICERS 
 
 
HENRY S. BISHOP 
Chairman and President, Chief Executive Officer 
 
G. FRED COOLIDGE III 
Secretary and Treasurer 
 
 
 
DIRECTORS 
 
 
HENRY S. BISHOP 
Chairman of the Board, President, First Georgia Bank 

B.W. BOWIE 
Retired Senior Vice President, General Manager, and Director Federal Paper 
Board Co. 

M. FRANK DeLOACH, III 
President, Culver & Deloach 
 
 
TERRY DRIGGERS 
President, Driggers Construction Company 

ROY K. HODNETT 
President, T.H.E., Inc. And The Island Inn 

HUBERT W. LANG 
President and Manager, Lang Building Supply, Inc. 
 
E. RAYMOND MOCK 
President, Mock Enterprises, Inc., Rayette Foods, Inc., KTP, Inc. 

JAMES D. MOORE 
President, J.D. Moore, Inc. 

D. LAMONT SHELL 
President, Glynn Electric Supply Co. 
 
 
FIRST GEORGIA BANK, ALTAMA 
 
 
 
ELZIE JACOBS 
Vice President 
 
 
 
FIRST GEORGIA BANK, BRUNSWICK 
 
 
HENRY S. BISHOP 
Chairman and President 
 
G. FRED COOLIDGE III 
Executive Vice President, Chief Financial Officer 
 
 
DIANE A. BLAKEBROUGH 
Vice President, Internal Auditor 

CATHERINE BOYNE 
Assistant Vice President 

LAURA D. FRIEND 
Vice President, Data Processing 
 
SHERRYL JAMES 
Assistant Vice President 

JUDY DIXON 
Assistant Vice President 

ELI D. MULLIS 
Assistant Vice President, Accounting 
 
DIANE SHARPE 
Loan Officer 

GEORGE McMANUS 
Loan Officer 

JODI TODD 
Assistant Vice President 
 
SUSAN USSERY 
Vice President 

DORIS THOMAS 
Senior Vice President 

ROBERT STRANGE 
Senior Vice President 
 
MARK WESTBERRY 
Vice President, Credit 


 
 
 
 
FIRST GEORGIA BANK, NORTH BRUNSWICK 
 
 
FRED ALEXANDER 
Vice President 
 
CHINITA DAVIS 
Assistant Vice President 
 
 
FIRST GEORGIA BANK, ST. SIMONS ISLAND 
 
 
MEL BAXTER 
Senior Vice President 

PAUL SANDERS 
Assistant Vice President 

JAN WILDSMITH 
Assistant Vice President, Operations Manager 
 
 
FIRST GEORGIA BANK, WAYCROSS/BLACKSHEAR 
 
 
JON TAHLIER 
President 

PAM TAYLOR 
Vice President 

LINDA WALKER 
Assistant Vice President, Operations Manager 
 
 
FIRST GEORGIA BANK, WAL-MART SHOPPING CENTER 
 
 
 
RITA BOATRIGHT 
Assistant Vice President 
 
 
40

<PAGE> 
 




                                 43
<PAGE>
 
EXHIBIT 23.0 
-------------- 
INDEPENDENT ACCOUNTANTS' CONSENT 
-------------------------------- 
 
The Board of Directors 
First Georgia Holding, Inc. 
 
We consent to incorporation by reference in the registration statements (No. 33-
62245 and No. 33-62249) on Form S-8 of First Georgia Holding, Inc.  of our 
report dated November 14, 1997, relating to the consolidated balance sheet of 
First Georgia Holding, Inc. and subsidiary as of September 30, 1997, and the 
related consolidated statements of operations, stockholders' equity and cash 
flows for the year ended September 30, 1997, which report appears in the 
September 30, 1997 annual report on Form 10-KSB of First Georgia Holding, 
Inc. 
 
                                                                      
 
Deloitte & Touche LLP 
Jacksonville, Florida 
December 1, 1997 
 

                                       44
<PAGE>
 
EXHIBIT 23.1
-------------

                                Independent Accountant's Consent
                                --------------------------------

The Board of Directors
First Georgia Holding, Inc.

We consent to incorporation by reference in the registration statements (No. 
33-62245 and No. 33-62249) on Form S-8 of First Georgia Holding, Inc. of our 
report dated November 1, 1996, relating to the consolidated balance sheet of 
First Georgia Holding, Inc. and subsidiary as of September 30, 1996, and the 
related consolidated statements of operation, stockholders' equity and cash
flows for the years ended September 30, 1996 and 1995 which report appears in 
the September 30, 1997 annual report on Form 10-KSB of First Georgia Holding, 
Inc.

                                              KPMG PEAT MARWICK LLP
                                              ---------------------
                                              KPMG PEAT MARWICK LLP

Atlanta, Georgia
December 23, 1997

                                 45
<PAGE>





SECURITIES AND EXCHANGE COMMISSION 
 
Washington, D.C. 20549 
 
FORM 8-K/A 
 
CURRENT REPORT 
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. 
 
Date of Report (Date of earliest event reported)   May 1, 1997     
 
First Georgia Holding, Inc. 
(Exact Name of Registrant as 
 Specified in its charter) 
 
        Georgia				  0-16657		    58-
1781773 
(State or jurisdiction             (Commission		(I.R.S. Employer 
or incorporation or organization)	File number)	 Identification 
									 
Number) 
1703 Gloucester Street 
Brunswick, GA 31520 
(Address of principal  
 executive offices) 
 
Registrant's telephone number, including area code:    (912) 267-7283 
 
                                   45 
<PAGE>

 
Item 4.	Changes in Registrant's Certifying Accountant. 
 
		A.  Effective May 1, 1997, First Georgia Holding, Inc. ("First 
Georgia") dismissed its prior certifying accountants, KPMG Peat Marwick LLP 
("KPMG") and retained as its new accountants, Deloitte & Touche LLP.  
KPMG's report on First Georgia's consolidated financial statements during the 
two most recent fiscal years contained no adverse opinion or a disclaimer of 
opinions, and was not qualified as to uncertainty, audit scope or accounting 
principles.  The decision to change accountants was approved by First Georgia's 
Board of Directors. 
 
		During the last two fiscal years and the subsequent interim 
periods to the date hereof, there were no disagreements between First Georgia 
and KPMG on any matters of accounting principles or practices, financial 
statement disclosure, or auditing scope or procedure, which disagreements, if 
not resolved to the satisfaction of KPMG, would have caused it to make a 
reference to the subject matter of the disagreements in connection with its 
reports. 
 
		None of the "reportable events" described in Item 304(a)(1)(v) 
occurred with respect to First Georgia within the last two fiscal years and the 
subsequent interim periods to the date hereof. 
 
		B.  Effective May 1, 1997, First Georgia engaged Deloitte & 
Touche LLP as its principal accountants.  During the last two fiscal years and 
the subsequent interim periods to the date hereof, First Georgia did not consult
Deloitte & Touche LLP regarding any of the matters or events set forth in Item 
304(a)(2)(i) and (ii) of Regulation S-K. 
 
		Pursuant to the requirements of the Securities Exchange Act 
of 1934, the registrant has duly caused this report to be signed on its behalf 
by the undersigned hereunto duly authorized. 
 
	                                                   First Georgia Holding, Inc. 
 
May 21, 1997			                                 				By: G. FRED COOLIDGE III
------------                               								     G. FRED COOLIDGE, III 
                                                       Secretary and Treasurer

<PAGE>


EXHIBIT 99
----------


                               Independent Auditors' Report
                               -----------------------------

The Board of Directors and Stockholders
First Georgia Holding, Inc.
Brunswick, Georgia

We have audited the consolidated balance sheet of First Georgia Holding, Inc. 
and subsidiary as of September 30, 1996 and the related consolidated statements
of operations, stockholders' equity and cash flows for the years ended September
30, 1996 and 1995.  These consolidated financial statements are the 
responsibility of the Company's management.  Our responsibility is to express
an opinion on these consolidated statements based on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by our
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of First Georgia 
Holding, Inc. and subsidiary at September 30, 1996 and the results of their 
operations and their cash flows for the years ended September 30, 1996 and 1995,
conformity with generally accepted accounting principles.

                               KPMG PEAT MARWICK LLP
                               ---------------------
                               KPMG PEAT MARWICK LLP

Atlanta, Georgia
November 1, 1996