<PAGE>

                   U. S. SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                  FORM 10-KSB
                 Annual Report Pursuant to Section 13 or 15(d)
                    of the Securities Exchange Act of 1934

                  For the Fiscal Year Ended December 31, 1999

                        Commission File Number 0-27448

                     GOLDEN ISLES FINANCIAL HOLDINGS, INC.

                             A Georgia Corporation
                 (IRS Employer Identification No. 58-1756713)
                              3811 Frederica Road
                       St. Simons Island, Georgia 31522
                                (912) 638-0667

                Securities Registered Pursuant to Section 12(b)
                 of the Securities Exchange Act of 1934: None

                Securities Registered Pursuant to Section 12(g)
                    of the Securities Exchange Act of 1934:
                           Common Stock No Par Value
                               (Title of Class)

Check whether the Registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
twelve 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 90 days.  Yes   X    No _____
                   -----

Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of the Form 10-KSB or any amendment to
this Form 10-KSB.  [_]

The Registrant's revenues for the fiscal year ended December 31, 1999 were
$10,936,587.00.

The aggregate market value of the Common Stock of the Registrant held by
nonaffiliates of the Registrant on March 3, 2000, was $15,009,000.  The
aggregate market value of the Common Stock held by nonaffiliates was computed by
reference to the fair market value of $6.00 per share of the Company's Common
Stock as of March 3, 2000, as reported on NASDAQ, on which the Company's Common
Stock is traded.  For the purpose of this response, directors, officers and
holders of 5% or more of the Registrant's Common Stock are considered the
affiliates of the Registrant at that date. The number of shares outstanding of
the Registrant's Common Stock as of March 3, 2000: 2,501,500 shares of no par
value Common Stock.
<PAGE>

Transitional Small Business Disclosure Format:  Yes _____   No   X
                                                               -----

DOCUMENTS INCORPORATED BY REFERENCE:  NONE.

CAUTIONARY STATEMENT FOR PURPOSES OF THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995

This Report may contain certain "forward-looking statements" including
statements concerning plans, objectives, future events or performance and
assumptions and other statements which are other than statements of historical
fact.  Golden Isles Financial Holdings, Inc. (the "Company") and its
subsidiaries cautions readers that the following important factors, among
others, may have affected and could in the future affect the Company's actual
results and could cause the Company's actual results for subsequent periods to
differ materially from those expressed in any forward-looking statement made by
or on behalf of the Company herein:  (i) the effect of changes in laws and
regulations, including federal and state banking laws and regulations, with
which the Company must comply, and the associated costs of compliance with such
laws and regulations either currently or in the future as applicable; (ii) the
effect of changes in accounting policies and practices, as may be adopted by the
regulatory agencies as well as by the Financial Accounting Standards Board, or
of changes in the Company's organization, compensation and benefit plans; (iii)
the effect on the Company's competitive position within its market area of the
increasing consolidation within the banking and financial services industries,
including the increased competition from larger regional and out-of-state
banking organizations as well as nonbank providers of various financial
services; (iv) the effect of changes in interest rates; and (v) the effect of
changes in the business cycle and downturns in the local, regional or national
economies.

THE COMPANY CAUTIONS THAT THE FOREGOING LIST OF IMPORTANT FACTORS IS NOT
EXCLUSIVE.  THE COMPANY DOES NOT UNDERTAKE TO UPDATE ANY FORWARD-LOOKING
STATEMENT, WHETHER WRITTEN OR ORAL, THAT MAY BE MADE FROM TIME TO TIME BY OR ON
BEHALF OF THE COMPANY.

                                      -2-
<PAGE>

                     GOLDEN ISLES FINANCIAL HOLDINGS, INC.

                          ANNUAL REPORT ON FORM 10-KSB
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999


<TABLE>
<CAPTION>
 Item                                                                      Page
Number                                                                    Number
------                                                                    ------
<S>                                                                       <C>
                                     PART I

1.     Description of Business...........................................      4
2.     Description of Property...........................................     17
3.     Legal Proceedings.................................................     18
4.     Submission of Matters to a Vote of Security Holders...............     18


                                    PART II

5.     Market for Common Equity and Related Stockholder Matters..........     18
6.     Management's Discussion and Analysis of Results of Operations and
        Financial Conditions.............................................     20
7.     Consolidated Financial Statements.................................     39
8.     Changes in and Disagreements with Accountants on Account
       and Financial Disclosure..........................................     75

                                   PART III

9.     Directors, Executive Officers, Promoters and Control Persons;
        Compliance with Section 16(a) of the Exchange Act................     75
10.    Executive Compensation............................................     78
11.    Stock Ownership of Certain Beneficial Owners and Management.......     82
12.    Certain Relationships and Related Transactions....................     85

                                    PART IV

13.    Exhibit List and Reports on Form 8-K..............................     86
</TABLE>

                                      -3-
<PAGE>

                                    PART I

Item 1.   Description of Business

A.   Business Overview.

Golden Isles Financial Holdings, Inc. (the "Company" or "GIFH") was incorporated
under the laws of the State of Georgia on September 8, 1987, but conducted only
organizational activities until its initial public offering closed on January
31, 1990.  Upon the approval of its application by the Board of Governors of the
Federal Reserve System (the "Federal Reserve") under the Federal Bank Holding
Company Act of 1956, as amended (the "Federal Bank Holding Company Act"), the
Company became a bank holding company.  The Company used the proceeds of the
offering to acquire all of the capital stock of The First Bank of Brunswick (the
"Bank"), a de novo bank chartered by the State of Georgia.

The Bank opened for business on July 2, 1990, to engage in a general commercial
banking business in its office in Brunswick (Glynn County), Georgia.  Since that
date, the Bank has engaged in a general commercial banking business, emphasizing
the banking needs of individuals and small-to medium sized businesses in its
primary service area. In 1995, the Bank opened a second full service office in
St. Simons Island, Georgia.

In September 1993, the Company received approval from the Federal Reserve to
establish and operate First Bank Mortgage Corporation ("FBMC"), as a wholly-
owned subsidiary of GIFH, to engage in originating, making, acquiring and
servicing mortgage loans.  On January 1, 1996, FBMC had offices in St. Simons
Island, Georgia, Savannah (Chatham County), Georgia and Blairsville (Union
County), Georgia.  In January 1996, FBMC opened a fourth office in Memphis,
Tennessee. Until 1996, FBMC engaged in various aspects of the mortgage loan
business.  As discussed below, in the second half of 1996, the Company decided
to eliminate certain aspects of FBMC's business and incorporate the remaining
function within the real estate lending function of the Bank.  As of December
31, 1996, FBMC had only two offices, on St. Simons Island, Georgia and in
Memphis, Tennessee.  The Memphis office closed on March 1, 1997. The St. Simons
Island office closed in April, 1997.  The Company completed its restructuring of
its mortgage banking activities in 1998 by reorganizing all mortgage banking
activities within the bank, liquidating the assets of FBMC, and discontinuing
its operations.

In September, 1993, the Company received approval from the Federal Reserve Board
to establish and operate First Credit Service Corporation ("FCC"), as a wholly-
owned subsidiary of GIFH, to engage in originating, making, acquiring and
servicing consumer loans, as well as offering credit-related insurance on such
loans.  FCC has, since then, engaged in the consumer loan business. As of
December 31, 1996, FCC had six Georgia offices, in Brunswick, Kingsland,
Savannah, Waycross, Martinez, and Garden City.  The Waycross and Garden City
offices of FCC, however, were closed respectively, in December and September,
1997, and FCC continued to conduct its operations from

                                      -4-
<PAGE>

its Brunswick, Savannah, Martinez, and Kingsland, Georgia, offices. In August,
1998, substantially all of the assets of FCC were sold and GIFH discontinued the
operations of FCC.

Beginning May 31, 1994, the Company conducted a secondary public offering of
securities (the "Secondary Offering") pursuant to which GIFH offered for sale a
minimum of 769,832 and a maximum of 1,538,462 units (the "Units") at a price of
$6.50 per Unit.  Each Unit consisted of one share of Common Stock of GIFH and
one non-detachable Class A Warrant to purchase one share of the Common Stock.
Each Class A Warrant expired on May 31, 1998, and entitled the holder to
purchase an additional share of the Common Stock at a price of $7.25 if
exercised on or before May 31, 1996, $8.25 if exercised on or before May 31,
1997, and $9.50 if exercised on or before May 31, 1998.  The Secondary Offering
closed as of March 31, 1995.  GIFH accepted subscriptions for a total of 897,230
Units, and received total proceeds in connection with such subscriptions
amounting to $5,831,995.  The proceeds were held in escrow until May 11, 1995,
when $5,500,000 was released from escrow to GIFH.  The balance of the proceeds
held in escrow was released to GIFH on July 25, 1995.  In 1996, the Company
received $53,077 pursuant to the exercise of 7,321 Class A warrants at $7.25 per
share.  In 1997, no Class A warrants were exercised, so the Company received no
money therefrom.  In 1998, 149,970 shares were exercised from these warrants at
$9.50 each.  The Company received $1,424,715 from the exercise of these warrants
and incurred $9,837 in related expense.  Unexercised warrants expired May 31,
1998 and the former units are now shares of common stock traded on the NASDAQ
national market under the symbol GIFH.

B.   Business Operations.

The Holding Company (GIFH)

GIFH owns 100% of the capital stock of the Bank. The principal role of GIFH is
to supervise and coordinate the activities of its subsidiary and to provide the
subsidiary with capital. GIFH derives all of its income from dividends from its
subsidiary and any interest it earns on funds it holds.

The First Bank of Brunswick (the Bank)

The Bank conducts a general commercial and retail banking business, emphasizing
in its marketing the Bank's local management and ownership.  The Bank accepts
demand, savings, and time deposits of individuals, partnerships and corporations
and offers commercial and retail checking accounts, Super NOW accounts, money
market accounts, individual retirement accounts and certificates of deposit.
The Bank makes various types of level term and installment loans, both personal
and commercial, and makes and services long-term mortgage loans as well as
individual and business loans.  The Bank acts as an issuing agent for U.S.
savings bonds, traveler's checks, money orders and cashier's checks, and it
offers collection teller services, including wire transfer services.  The Bank
also offers safe deposit boxes and a night depository facility.  The Bank
provides these services from its main office in Brunswick, Georgia, and its
branch in St. Simons Island, Georgia.  Bank deposits are insured by the Federal
Deposit Insurance Corporation ("FDIC"), up to applicable limits.

                                      -5-
<PAGE>

The Bank derives many of its customers from and conducts a significant portion
of its business transactions within a primary service area encompassing the
mainland of Glynn County and St. Simons Island, Georgia. The population of Glynn
County was 61,807 in 1987,64,737 in 1990 and is projected to reach 74,546 by the
year 2000.  Total dwelling units are expected to increase from 24,085 in 1987 to
31,182 in the year 2000.  The area includes well-known resort, retirement and
convention destinations, with local industry oriented towards tourism and
leisure activities.  In addition, the economy of Glynn County is fairly
diversified, the top five industries ranked by total employment being:  a pulp
mill, seafood processing, restaurants, hotel/motels and chemical processing.
The local economy is also supported by the Federal Law Enforcement Training
Center (the "Center") in Brunswick, which processed approximately 19,350 law
enforcement officers in 1996.  The Center employs approximately 1,600 people.

Management expects the relatively high level of growth and commercial activity
in Glynn County to continue, providing a favorable environment for the Company's
operating subsidiary.  However, there is no assurance that population growth and
ongoing economic development will continue, or that the subsidiaries will be
able to exploit the growth and development profitably.

The Bank competes with other commercial banks, savings and loan associations,
credit unions, mortgage banking companies, consumer finance companies,
securities brokerage firms, insurance companies, money market mutual funds, and
other financial institutions.  As of December 31, 1999, there were a total of
eight (8) FDIC-insured institutions operating in the Glynn County markets.
Management estimates that as of December 31, 1999, FDIC-insured deposits in
Glynn County totaled approximately $1 billion, with the Bank having
approximately 10% of such deposits.

In general terms, federal interstate banking laws (discussed in Supervision and
Regulation, below), as well as other federal and state laws, have caused and
will continue to cause increased competition from both conventional banking
institutions and other businesses offering financial services and products
within the financial services industry in Georgia.  Many of the financial
institutions operating in Georgia have substantially greater financial resources
and offer certain services, such as trust services, that the Bank does not
expect to provide in the near future.  By virtue of the greater total
capitalization of such institutions, they have substantially higher lending
limits than the Bank and substantial advertising and promotional budgets.  To
compete, the Bank relies on specialized services, responsive handling of its
customers and personal contacts by officers, directors and staff.

First Bank Mortgage Corporation (FBMC)

Management decided that the Company's remaining mortgage lending operation
(i.e., retail mortgage lending) could be handled more efficiently and
inexpensively within the framework of the Bank.  As a result, during 1998 the
Company's remaining mortgage function was shifted to the Bank and FBMC ceased to
function as an operating subsidiary.  The Company anticipates that for the
foreseeable future, the Bank will act strictly as a broker of mortgage loans
with funds provided by other lenders.  The Bank may in the future commit its own
capital to originating or purchasing mortgage loans if suitable opportunities
arise.

                                      -6-
<PAGE>

First Credit Service Corporation (FCC)

Since its inception in September 1993, FCC engaged in the consumer finance
business, i.e., it originated, made, acquired, and serviced consumer loans, as
well as offered credit related insurance on such loans, to the general public.
The primary areas serviced by FCC from its four offices were Glynn, Camden,
Columbia, and Chatham Counties, Georgia. The Company sold substantially all the
assets of its subsidiary, First Credit Service Corporation, on August 14, 1998
pursuant to an Asset Purchase Agreement dated August 11, 1998 by and among First
Credit Service Corporation ("FCC"); Golden Isles Financial Holdings, Inc. and
New South Financial Services, Inc. ("New South"). The acquisition was initially
closed on August 14, 1998 and pursuant to paragraph 3.2 of the Asset Purchase
Agreement, New South paid to FCC $9,365,120.00 as the "Estimated Purchase
Price." Ten days thereafter pursuant to Section 3.3(b) of the Asset Purchase
Agreement, the purchase price was increased by $89,922.00. Additionally FCC sold
some loans, leases and personal property that were not purchases by new South to
another party for $128,134.68. The assets sold to New South and the other party
were all loans of FCC, personal property of FCC located in the Savannah,
Martinez, Brunswick, and Kingsland branch of FCC, certain itemized contracts,
all records relating to purchased assets of FCC and all insurance contracts
relating to loans purchased.

C.   Employees.

As of December 31, 1999, GIFH and its subsidiaries employed the equivalent of 51
full-time employees.  Management believes that its employee relations are good.
There are no collective bargaining agreements covering any of the employees.

D.   Supervision and Regulation.

     Bank holding companies and banks are regulated under both federal and state
law.  The following is a brief summary of certain statutes and rules and
regulations affecting the Company, the Bank, and to a more limited extent the
Company's subsidiary bank.

     This summary is qualified in its entirety by reference to the particular
statute and regulatory provision referred to and is not intended to be an
exhaustive description of the statutes or regulations applicable to the business
of the Company and its subsidiaries.  The scope of regulation and permissible
activities of the Company and its subsidiaries is subject to change by future
federal and state legislation.  Supervision, regulation and examination of the
Company and the Bank by the bank regulatory agencies are intended primarily for
the protection of depositors rather than shareholders of the Company.

                                      -7-
<PAGE>

Regulation of the Company.

     The Company is a registered holding company under the Federal Bank Holding
Company Act and the Georgia Bank Holding Company Act and is regulated under such
Act by the Federal Reserve and by the Georgia Department of Banking and Finance
(the "Georgia Department"), respectively.

     Reporting and Examination.

     As a bank holding company, the Company is required to file annual reports
with the Federal Reserve and the Georgia Department and provide such additional
information as the applicable regulator may require pursuant to the Federal and
Georgia Bank Holding Company Acts.  The Federal Reserve and the Georgia
Department may also conduct examinations of the Company to determine whether the
Company is in compliance with Bank Holding Company Acts and regulations
promulgated thereunder.

     Acquisitions.

     The Federal Bank Holding Company Act requires every bank holding company to
obtain the prior approval of the Federal Reserve before:  (1) acquiring direct
or indirect ownership or control of more than 5% of the voting shares of any
bank; (2) acquiring all or substantially all of the assets of a bank; and (3)
before merging or consolidating with another bank holding company.

     The Georgia Department requires similar approval prior to the acquisition
of any additional banks from every Georgia bank holding company.  A Georgia bank
holding company is generally prohibited from acquiring ownership or control of
5% or more of the voting shares of a bank unless the bank being acquired is
either a bank for purposes of the Federal Bank Holding Company Act, or a federal
or state savings and loan association or savings bank or federal savings bank
whose deposits are insured by the Federal Savings and Loan Insurance Corporation
and such bank has been in existence and continuously operating as a bank for a
period of five years or more prior to the date of application to the Department
for approval of such acquisition.

     Source of Strength to Subsidiary Banks.

     The Federal Reserve (pursuant to regulation and published statements) has
maintained that a bank holding company must serve as a source of financial
strength to its subsidiary banks.  In adhering to the Federal Reserve policy,
the Company may be required to provide financial support to the Bank at a time
when, absent such Federal Reserve policy, the Company may not deem it advisable
to provide such assistance.  Similarly, the Federal Reserve also monitors the
financial performance and prospects of non-bank subsidiaries with an inspection
process to ascertain whether such non-banking subsidiaries enhance or detract
from the Company's ability to serve as a source of strength for the Bank.

                                      -8-
<PAGE>

     Capital Requirements.

     The holding company is subject to regulatory capital requirements imposed
by the Federal Reserve applied on a consolidated basis with the bank owned by
the holding company.  Bank holding companies must have capital (as defined in
the rules) equal to eight (8) percent of risk-weighted assets.  The risk weights
assigned to assets are based primarily on credit risk.  For example, securities
with an unconditional guarantee by the United States government are assigned the
least risk category.  A risk weight of 50% is assigned to loans secured by
owner-occupied one-to-four family residential mortgages.  The aggregate amount
of assets assigned to each risk category is multiplied by the risk weight
assigned to that category to determine the weighted values, which are added
together to determine total risk-weighted assets.

     The Federal Reserve also requires the maintenance of minimum capital
leverage ratios to be used in tandem with the risk-based guidelines in assessing
the overall capital adequacy of bank holding companies.  The guidelines define
capital as either Tier 1 (primarily shareholder equity) or Tier 2 (certain debt
instruments and a portion of the allowance for loan losses).  Tier 1 capital for
banking organizations includes common equity, minority interest in the equity
accounts of consolidated subsidiaries, qualifying noncumulative perpetual
preferred stock and qualifying cumulative perpetual preferred stock.
(Cumulative perpetual preferred stock is limited to 25 percent of Tier 1
capital.) Tier 1 capital excludes goodwill; amounts of mortgage servicing
assets, nonmortgage servicing assets, and purchased credit card relationships
that, in the aggregate, exceed 100 percent of Tier 1 capital; nonmortgage
servicing assets and purchased credit card relationships that in the aggregate,
exceed 25 percent of Tier 1 capital; all other identifiable intangible assets;
and deferred tax assets that are dependent upon future taxable income, net of
their valuation allowance, in excess of certain limitations.

     Effective June 30, 1998, the Board has established a minimum ratio of Tier
1 capital to total assets of 3.0 percent for strong bank holding companies
(rated composite "1" under the BOPEC rating system of bank holding companies),
and for bank holding companies that have implemented the Board's risk-based
capital measure for market risk.  For all other bank holding companies, the
minimum ratio of Tier 1 capital to total assets is 4.0 percent.  Banking
organizations with supervisory, financial, operational, or managerial
weaknesses, as well as organizations that are anticipating or experiencing
significant growth, are expected to maintain capital ratios well above the
minimum levels.  Higher capital ratios may be required for any bank holding
company if warranted by its particular circumstances or risk profile.  Bank
holding companies are required to hold capital commensurate with the level and
nature of the risks, including the volume and severity of problem loans, to
which they are exposed.

     As of December 31, 1999, GIFH maintained Tier 1 and Total Risk Based
Capital Ratios of 14.6% and 15.9% respectively.  For a more detailed analysis of
the Company's capital and comparison to regulatory requirements see Item 6 and
Note 14 to the Consolidated Financial Statements in Item 7 below.

                                      -9-
<PAGE>

     The Riegle-Neal Interstate Banking and Branching Efficiency Act.

     Prior to the enactment of the Interstate Banking and Branching Efficiency
Act of 1994 (the "Riegle-Neal Act"), interstate expansion of bank holding
companies was prohibited, unless such acquisition was specifically authorized by
a statute of the state in which the target bank was located. Pursuant to the
Riegle-Neal Act, effective September 29, 1995 an adequately capitalized and
adequately managed holding company may acquire a bank across state lines,
without regard to whether such acquisition is permissible under state law.  A
bank holding company is considered to be "adequately capitalized" if it meets
all applicable federal regulatory capital standards.

     While the Riegle-Neal Act precludes a state from entirely insulating its
banks from acquisition by an out-of-state holding company, a state may still
provide that a bank may not be acquired by an out-of-state company unless the
bank has been in existence for a specified number of years, not to exceed five
years.  Additionally, the Federal Reserve is directed not to approve an
application for the acquisition of a bank across state lines if: (i) the
applicant bank holding company, including all affiliated insured depository
institutions, controls or after the acquisition would control, more than ten
(10) percent of the total amount of deposits of all insured depository
institutions in the United States (the "ten percent concentration limit") or
(ii) the acquisition would result in the holding company controlling thirty (30)
percent or more of the total deposits of insured depository institutions in any
state in which the holding company controlled a bank or branch immediately prior
to the acquisition (the "thirty percent concentration limit").  States may waive
the thirty percent concentration limit, or may make the limits more or less
restrictive, so long as they do no discriminate against out-of-state bank
holding companies.

     The Riegle-Neal Act also provides that, beginning on June 1, 1997, banks
located in different states may merge and operate the resulting institution as a
bank with interstate branches.  However, a state may (i) prevent interstate
branching through mergers by passing a law prior to June 1, 1997 that expressly
prohibits mergers involving out-of-state banks, or (ii) permit such merger
transactions prior to June 1, 1997.  Under the Riegle-Neal Act, an interstate
merger transaction may involve the acquisition of a branch of an insured bank
without the acquisition of the bank itself, but only if the law of the state in
which the branch is located permits this type of transaction.

     Under the Riegle-Neal Act, a state may impose certain conditions on a
branch of an out-of-state bank resulting from an interstate merger so long as
such conditions do not have the effect of discriminating against out-of-state
banks or bank holding companies, other than on the basis of a requirement of
nationwide reciprocal treatment.  The ten (10) percent concentration limit and
the thirty (30) percent concentration limit described above, as well as the
rights of the states to modify or waive the thirty (30) percent concentration
limit, apply to interstate bank mergers in the same manner as they apply to the
acquisition of out-of-state banks.

     A bank resulting from an interstate merger transaction may retain and
operate any office that any bank involved in the transaction was operating
immediately before the transaction.  After completion of the transaction, the
resulting bank may establish or acquire additional branches at any

                                      -10-
<PAGE>

location where any bank involved in the transaction could have established or
acquired a branch. The Riegle-Neal Act also provides that the appropriate
federal banking agency may approve an application by a bank to establish and
operate an interstate branch in any state that has in effect a law that
expressly permits all out-of-state banks to establish and operate such a branch.

     In response to the Riegle-Neal Act, effective June 1, 1997, Georgia
permitted interstate branching, although only through merger and acquisition.
In addition, Georgia law provides that a bank may not be acquired by an out-of-
state company unless the bank has been in existence for five years.  Georgia has
also adopted the thirty percent concentration limit, but permits state
regulators to waive it on a case-by-case basis.

The Gramm-Leach-Bliley Act of 1999

     The Gramm-Leach-Bliley Act (the "GLB Act") dramatically increases the
ability of eligible banking organizations to affiliate with insurance,
securities, and other financial firms and insured depository institutions.  The
GLB Act permits eligible banking organizations to engage in activities and to
affiliate with nonbank firms engaged in activities that are financial in nature
or incidental to such financial activities, and also includes some additional
activities that are complementary to such financial activities.

     The definition of activities that are financial in nature is handled by the
GLB Act in two ways.  First, there is a laundry list of activities that are
designated as financial in nature.  Second, the authorization of new activities
as financial in nature or incidental to a financial activity requires a
consultative process between the Federal Reserve Board and the Secretary of the
Treasury with each having the authority to veto proposals of the other.  The
Federal Reserve Board has the discretion to determine what activities are
complementary to financial activities.

     The precise scope of the authority to engage in these new financial
activities, however, depends on the type of banking organization, whether it is
a holding company, a subsidiary of a national bank, or a national bank's direct
conduct.  The GLB Act repealed two sections of the Glass-Stegall Act, Sections
20 and 32, which restricted affiliations between securities firms and banks. The
GLB Act authorizes two types of banking organizations to engage in expanded
securities activities.  The GLB Act authorizes a new type of bank holding
company called a financial holding company to have a subsidiary company that
engages in securities underwriting and dealing without limitation as to the
types of securities involved.  The GLB Act also permits a national bank to
control a financial subsidiary that can engage in many of the expanded
securities activities permitted for financial holding companies.  However,
additional restrictions apply to national bank financial subsidiaries.

     Since the Bank Holding Company Act of 1956, and its subsequent amendments,
federal law has limited the types of activities that are permitted for a bank
holding company, and it is has also limited the types of companies that a bank
holding company can control.  The GLB Act retains the bank holding company
regulatory framework, but adds a new provision that authorizes enlarged
authority for the new financial holding company form of organization to engage
in any activity of a

                                      -11-
<PAGE>

financial nature or incidental thereto. A new Section 4(k) of the Bank Holding
Company Act provides that a financial holding company may engage in any
activity, and may acquire and retain shares of any company engaged in any
activity, that the Federal Reserve Board in coordination with the Secretary of
the Treasury determines by regulation or order to be financial in nature or
incidental to such financial activities, or is complementary to financial
activities.

     The GLB Act also amends the Bank Holding Company Act to prescribe
eligibility criteria for financial holding companies, defines the scope of
activities permitted for bank  holding companies that do not become financial
holding companies, and establishes consequences for financial holding companies
that cease to maintain the status needed to qualify as a financial holding
company.

     There are three special criteria to qualify for the enlarged activities and
affiliation.  First, all the depository institutions in the bank holding company
organization must be well-capitalized. Second, all of the depository
institutions of the bank holding company must be well managed. Third, the bank
holding company must have filed a declaration of intent with the Federal Reserve
Board stating that it intends to exercise the expanded authority under the GLB
Act and certify to the Federal Reserve Board that the bank holding company's
depository institutions meet the well-capitalized and well managed criteria.
The GLB Act also requires the bank to achieve a rating of satisfactory or better
in meeting community credit needs at the most recent examination of such
institution under the Community Reinvestment Act.

     Once a bank holding company has filed a declaration of its intent to be a
financial holding company, as long as there is no action by the Federal Reserve
Board giving notice that it is not eligible, the company may proceed to engage
in the activities and enter into the affiliations under the large authority
conferred by the GLB Act's amendments to the Bank Holding Company Act. The
holding company does not need prior approval from the Federal Reserve Board to
engage in activities that the GLB Act identifies as financial in nature or that
the Federal Reserve Board has determined to be financial in nature or incidental
thereto by order or regulation.

     The GLB Act retains the basic structure of the Bank Holding Company Act.
Thus, a bank holding company that is not eligible for the expanded powers of a
financial holding company is now subject to the amended Section 4(c)(8) of the
Bank Holding Company Act which freezes the activities that are authorized and
defined as closely related to banking activities.  Under this Section, a bank
holding company is not eligible for the expanded activities permitted under new
Section 4(k) and is limited to those specific activities previously approved by
the Federal Reserve Board.

     The GLB Act also addresses the consequences when a financial holding
company that has exercised the expanded authority fails to maintain its
eligibility to be a financial holding company. The Federal Reserve Board may
impose such limitations on the conduct or activities of a noncompliant financial
holding company or any affiliate of that company as the Board determines to be
appropriate under the circumstances and consistent with the purposes of the Act.

                                      -12-
<PAGE>

     The GLB Act is essentially a dramatic liberalization of the restrictions
placed on banks, especially bank holding companies, regarding the areas of
financial businesses in which they are allowed to compete.

Regulation of the Bank.

     As a state-chartered bank, the Bank is examined and regulated by the
Federal Deposit Insurance Corporation ("FDIC") and the Georgia Department.  The
major functions of the FDIC with respect to insured 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 claim of depositors, acting as a
receiver of state banks placed in receivership when so appointed by state
authorities, and preventing the continuance or development of unsound and unsafe
banking practices.  In addition, the FDIC also approves conversions, mergers,
consolidations, and assumption of deposit liability transactions between insured
banks and noninsured banks or institutions to prevent capital or surplus
diminution in such transactions where the resulting, continued or assumed bank
is an insured nonmember state bank.

     Subsidiary banks of a bank holding company are subject to certain
restrictions imposed by the Federal Bank Holding Company Act on any extension of
credit to the bank 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 bank holding
company and its subsidiaries are prohibited from engaging in certain tie-in-
arrangements in connection with any extension of credit or provision of any
property or services.

     The Georgia Department regulates all areas of the banks banking operations,
including mergers, establishment of branches, loans, interest rates, and
reserves.  The Bank must have the approval of the Commissioner to pay cash
dividends, unless at the time of such payment:

     1.   the total classified assets at the most recent examination of such
bank do not exceed 80% of Tier 1 capital plus Allowance for Loan Losses as
reflected at such examination;

     2.   the aggregate amount of dividends declared or anticipated to be
declared in the calendar year does not exceed 50% of the net profits, after
taxes but before dividends, for the pervious calendar year; and

     3.   the ratio of Tier 1 Capital to Adjusted Total Assets shall not be less
than six (6) percent.

     The Bank is also subject to State of Georgia banking and usury laws
restricting the amount of interest which it may charge in making loans or other
extensions of credit.

     Expansion through Branching, Merger or Consolidation.

     With respect to expansion, the Bank was previously prohibited from
establishing branch offices or facilities outside of the county in which its
main office was located, except:

     (1)  in adjacent counties in certain situations, or

                                      -13-
<PAGE>

     (2)  by means of merger or consolidation with a bank which has been in
existence for at least five years.

In addition, in the case of a merger or consolidation, the acquiring bank must
have been in existence for at least 24 months prior to the merger.  However,
effective July 1, 1996, Georgia permits the subsidiary bank(s) of any bank
holding company then engaged in the banking business in the State of Georgia to
establish, de novo, upon receipt of required regulatory approval, an aggregate
of up to three additional branch banks in any county within the State of
Georgia.  Effective July 1, 1998, this same Georgia law permits, with required
regulatory approval, the establishment of de novo branches in an unlimited
number of counties within the State of Georgia by the subsidiary bank(s) of bank
holding companies then engaged in the banking business in the State of Georgia.
This law may result in increased competition in the Bank's market area.

     Capital Requirements.

     The FDIC adopted risk-based capital guidelines that went into effect on
December 31, 1990 for all FDIC insured state chartered banks that are not
members of the Federal Reserve System. Beginning December 31, 1992, all banks
were required to maintain a minimum ratio of total capital to risk weighted
assets of eight (8) percent of which at least four (4) percent must consist of
Tier 1 capital.  Tier 1 capital of state chartered banks (as defined by the
regulation) generally consists of: (i) common stockholders equity; (ii)
qualifying noncumulative perpetual preferred stock and related surplus; and
(iii) minority interests in the equity accounts of consolidated subsidiaries.
In addition, the FDIC adopted a minimum ratio of Tier 1 capital to total assets
of banks, referred to as the leverage capital ratio of three (3) percent if the
FDIC determines that the institution is not anticipating or experiencing
significant growth and has well-diversified risk, including no undue interest
rate exposure, excellent asset quality, high liquidity, good earnings and, in
general is considered a strong banking organization, rated Composite "1" under
the Uniform Financial Institutions Rating System (the CAMEL rating system)
established by the Federal Financial Institutions Examination Council.  All
other financial institutions are required to maintain leverage ratio of four (4)
percent.

     Effective October 1, 1998, the FDIC amended its risk-based and leverage
capital rules as follows: (1) all servicing assets and purchase credit card
relationships ("PCCRs") that are included in capital are each subject to a
ninety percent (90%) of fair value limitation (also known as a "ten percent
(10%) haircut"); (2) the aggregate amount of all servicing assets and PCCRs
included in capital cannot exceed 100% of Tier I capital; (3) the aggregate
amount of nonmortgage servicing assets ("NMSAs") and PCCRS included in capital
cannot exceed 25% of Tier 1 capital; and (4) all other intangible assets (other
than qualifying PCCRS) must be deducted from Tier 1 capital.

     Amounts of servicing assets and PCCRs in excess of the amounts allowable
must be deducted in determining Tier 1 capital.  Interest-only Strips
receivable, whether or not in security form, are not subject to any regulatory
capital limitation under the amended rule.

                                      -14-
<PAGE>

FDIC Insurance Assessments.

     The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), enacted in December, 1991, provided for a number of reforms relating
to the safety and soundness of the deposit insurance system, supervision of
domestic and foreign depository institutions and improvement of accounting
standards.  One aspect of the Act is the requirement that banks will have to
meet certain safety and soundness standards.  In order to comply with the Act,
the Federal Reserve and the FDIC implemented regulations defining operational
and managerial standards relating to internal controls, loan documentation,
credit underwriting, interest rate exposure, asset growth, director and officer
compensation, fees and benefits, asset quality, earnings and stock valuation.

     The regulations provide for a risk based premium system which requires
higher assessment rates for banks which the FDIC determines pose greater risks
to the Bank Insurance Fund ("BIF"). Under the regulations, banks pay an
assessment depending upon risk classification.

     To arrive at risk-based assessments, the FDIC places each bank in one of
nine risk categories using a two step process based on capital ratios and on
other relevant information.  Each bank is assigned to one of three groups: (i)
well capitalized, (ii) adequately capitalized, or (iii) under capitalized, based
on its capital ratios.  The FDIC also assigned each bank to one of three
subgroups based upon an evaluation of the risk posed by the bank.  The three
subgroups include (i) banks that are financially sound with only a few minor
weaknesses, (ii) banks with weaknesses which, if not corrected, could result in
significant deterioration of the bank and increased risk to the BIF, and (iii)
those banks that pose a substantial probability of loss to the BIF unless
corrective action is taken. FDICIA imposes progressively more restrictive
constraints on operations management and capital distributions depending on the
category in which an institution is classified.  As of December 31, 1999, the
Bank met the definition of a well-capitalized institution, and will be assessed
accordingly for 1999.

     Under FDICIA insurance of deposits may be terminated by the FDIC upon a
finding that the institution has engaged in unsafe and unsound practices, is in
an unsafe or unsound condition to continue operations, or has violated any
applicable law, regulation, rule, order or condition imposed by the FDIC.

Community Reinvestment Act.

     The Company and the Bank are subject to the provisions of the Community
Reinvestment Act of 1977, as amended (the "CRA") and the federal banking
agencies' regulations issued thereunder.  Under the CRA, all banks and thrifts
have a continuing and affirmative obligation, consistent with its safe and sound
operation to help meet the credit needs for their entire communities, including
low- and moderate-income neighborhoods.  The CRA does not establish specific
lending requirements or programs for financial institutions, nor does it limit
an institution's discretion to develop the types of products and services that
it believes are best suited to its particular community, consistent with the
CRA.

                                      -15-
<PAGE>

     The CRA requires a depository institution's primary federal regulator, in
connection with its examination of the institution, to assess the institution's
record of assessing and meeting the credit needs of the community served by that
institution, including low- and moderate-income neighborhoods.  The regulatory
agency's assessment of the institution's record is made available to the public.
In the case of a bank holding company applying for approval to acquire a bank or
other bank holding company, the Federal Reserve will assess the records of each
subsidiary depository institution of the applicant bank holding company, and
such records may be the basis for denying the application.

     The evaluation system used to judge an institution's CRA performance
consists of three tests: (1) a lending test; (2) an investment test; and (3) a
service test.  Each of these tests will be applied by the institution's primary
federal regulator taking into account such factors as: (i) demographic data
about the community; (ii) the institution's capacity and constraints; (iii) the
institution's product offerings and business strategy; and (iv) data on the
prior performance of the institution and similarly-situated lenders.

     In addition, a financial institution will have the option of having its CRA
performance evaluated based on a strategic plan of up to five years in length
that it had developed in cooperation with local community groups.  In order to
be rated under a strategic plan, the institution will be required to obtain the
prior approval of its federal regulator.

     The interagency CRA regulations provide that an institution evaluated under
a given test will receive one of five ratings for the test: (1) outstanding; (2)
high satisfactory; (3) low satisfactory; (4) needs to improve; and (5)
substantial noncompliance.  An institution will receive a certain number of
points for its rating on each test, and the points are combined to produce an
overall composite rating. Evidence of discriminatory or other illegal credit
practices would adversely affect an institution's overall rating.  As a result
of the Bank's most recent CRA examination the Bank received a "satisfactory" CRA
rating.

Proposed Legislation.

     Legislation is regularly considered and adopted by both the United States
Congress and the Georgia General Assembly.  Such legislation could result in
regulatory changes and changes in competitive relationships for banks and bank
holding companies.  The effect of such legislation on the business of the
Company and the Bank cannot be predicted.

Monetary Policy.

     The results of operations of the Company and the Bank are affected by
credit policies of monetary authorities, particularly the Federal Reserve.  The
instruments of monetary policy employed by the Federal Reserve include open
market operations in U.S. Government securities, changes in the discount rate on
member bank borrowings, changes in reserve requirements against member bank
deposits and limitations on interest rates which member banks may pay on time
and savings deposits.

                                      -16-
<PAGE>

In view of the changing conditions in the foreign and national economy, as well
as the effect of policies and actions taken by monetary and fiscal authorities,
including the Federal Reserve, no prediction can be made as to possible future
changes in interest rates, deposit levels, loan demand or the business and
earnings of the Company.

Competition.

     The banking industry is highly competitive.  Banks generally compete with
other financial institutions through the banking products and services offered,
the pricing of services, the level of service provided, the convenience and
availability of services, and the degree of expertise and the personal manner in
which services are offered.  The Bank encounters competition from most of the
financial institutions in the Bank's primary service area.  In the conduct of
certain areas of its banking business, the Bank also competes with credit
unions, consumer finance companies, insurance companies, money market mutual
funds and other financial institutions, some of which are not subject to the
same degree of regulation and restrictions imposed upon the Bank. Management
believes that competitive pricing and personalized service will provide it with
a method to compete effectively in the primary service area.

Item 2.   Description of Property.

As of July 1997, GIFH relocated its executive offices to the second floor of the
Bank's St. Simons branch at 3811 Frederica Road, St. Simons Island, Georgia.
GIFH leases this space from the Bank on a month-to-month basis.  Previously,
GIFH's executive offices were housed in a two-story, freestanding building which
was part of an office condominium complex at 200 Plantation Chase, St. Simons
Island, Georgia 31522.  GIFH purchased the building in February 1996 and sold it
in July 1997.

The Bank owns the building which houses its main branch and support service
facilities.  It is located at 3440 Cypress Mill Road, Brunswick, Georgia 31521,
adjacent to the Cypress Mill Square.  The one and one-half story free standing
structure is configured for retail banking operations as well as for executive
offices for officers of the Bank.  In addition, the Bank owns a building located
at 3811 Frederica Road, St. Simons Island, Georgia 31522, and operates a full
service branch in this building.  As noted above, the Bank also leases space
within the St. Simons branch to GIFH for use as executive offices.


                                      -17-
<PAGE>


Management of GIFH believes that all of its properties are suitable and adequate
for their intended purposes, and that GIFH has adequate insurance in place as
would be considered prudent for their uses.  Management further believes that
all of the properties leased for terms, as well as those occupied on a month-to-
month basis, could be replaced with other suitable and adequate facilities
available from time to time in the market place.

In November 1999, the Bank purchased 1.3 acres of property in north Glynn County
located at 5340 New Jesup Highway.  During December 1999 the Bank applied for
consent to establish a full-service branch office.  Approval for the branch
application was obtained from the FDIC and the Georgia Department of Banking and
Finance in January 2000.  The Bank intends to open a temporary banking facility
on the site in April 2000 with the permanent facility scheduled to open in
September 2000.  The total cost is approximately $1.5 million.

Item 3.   Legal Proceedings.

Neither the Company nor its subsidiaries are parties to nor is any of their
property the subject of, any material litigation, other than is incidental to
the normal operations of its business, which would have a material effect upon
the operations or financial condition of the Company or its subsidiaries.

Item 4.   Submission of Matters to a Vote of Security Holders.

No matter was submitted to a vote of security-holders during the fourth quarter
of fiscal 1999 covered by this report.

                                    PART II

Item 5.   Market for Common Equity and Related Stockholder Matters.

Before April 18, 1996, there was no established market in which shares of GIFH's
Common Stock were regularly traded, nor was there any uniformly quoted prices
for such shares.  However, on April 18, 1996, the Company Common Stock began to
be traded on the NASDAQ Small Capitalization market (NASDAQ-"GIFH") and the
former Units were traded under the symbol GIFHU.  On May 31, 1998 the warrants
attached to the units expired and the trading of the common stock was
consolidated under the one symbol GIFH.  The high-low range for trades in the
Company's Common Stock and Units, for each quarter during 1999 and 1998 in which
trades were reported, were as follows:

                                      -18-
<PAGE>

                        1998
QUARTER             COMMON STOCK             UNITS
                    High    Low     High               Low

1st                  9 5/8  7       12 1/4             7
2nd                 10      9 1/4    9 1/2             9
3rd                 11      8 3/4   No Further Trades
4th                 10 1/2  8 1/2

                        1999
QUARTER             COMMON STOCK             UNITS
                    High    Low     High               Low
1st                 10.1875 9.0625  N/A                N/A
2nd                  9.5625 8.75    N/A                N/A
3rd                  9.25   8.375   N/A                N/A
4th                  8.4375 6.50    N/A                N/A

As of March 3, 2000, 2,501,500 shares of GIFH's Common Stock were issued and
outstanding to approximately 680 holders of record.

GIFH paid dividends in 1999 in the amount of $198,677.00 or 8.0 cents per share.
As discussed in Item 1 above, the Bank's ability to pay dividends is subject to
numerous statutory conditions.  Thus, to the extent the source of dividends to
be paid by GIFH is dividends from the Bank, GIFH may or may not pay dividends in
the near future.

                                      -19-
<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

General

     The Company's principal asset is its ownership of the Bank. Accordingly,
the Company's results of operations are primarily dependent upon the results of
operations of the Bank.  The Bank's activities consist of attracting deposits
from the general public and applying those funds to the origination of
commercial, consumer and real estate loans (including commercial loans
collateralized by real estate).  The Bank's  profitability depends primarily on
net interest income, which is the difference between interest income generated
from interest-earning assets (i.e., loans and investments) less the interest
expense incurred on interest-bearing liabilities (i.e., customer deposits and
borrowed funds).  Net interest income is affected by the relative amounts of
interest-earning assets and interest-bearing liabilities, and the interest rate
paid and earned on these balances.  Net interest income is dependent upon the
Bank's interest rate spread, which is the difference between the average yield
earned on its interest-earning assets and the average rate paid on its interest-
bearing liabilities.  When interest-earning assets approximates or exceeds
interest-bearing liabilities, any positive interest rate spread will generate
interest income.  The interest rate spread is impacted by interest rates,
deposit flows and loan demand.  Additionally, and to a lesser extent, the Bank's
profitability is affected by such factors as the level of noninterest income and
expenses, the provision for loan losses and the effective tax rate.  Noninterest
income consists primarily of service charges on deposit accounts and loan
origination  fees and other fees charged to bank customers.  Noninterest
expenses consist of compensation and benefits, occupancy-related expenses and
other operating expenses.

     During 1998, The Company discontinued the operations of its consumer
finance subsidiary, First Credit Service Corporation ("FCC") and disposed of its
assets.  For purposes of Management's Discussion and Analysis of Financial
Condition and Results of operations, the results of operations from continuing
operations have been presented on a comparable basis for 1999 and 1998.  The
results of discontinued operations for 1998 have not been presented.  Also,
statistical disclosure required by Exchange Act Guide 3 has been presented only
for continuing operations.

Results From Continuing Operations For Years Ended December 31, 1999 and 1998

     The Company's results of operations are determined by its ability to
effectively manage interest income and expense, to minimize loan and investment
losses, to generate noninterest income and to control noninterest expense.
Since interest rates are determined by market forces and economic conditions
beyond the control of the Company, the ability to generate net interest income
is dependent upon the Bank's  ability to obtain an adequate spread between the
rate earned on interest-earning assets and the rate paid on interest-bearing
liabilities.  Thus, the key performance measure for net interest income is the
interest margin or net yield, which is net interest income divided by average
earning assets.

                                     -20-
<PAGE>

Net Interest Income

     The primary component of consolidated earnings is net interest income, or
the difference between interest income on interest-earning assets and interest
paid on interest-bearing liabilities.  The net interest margin is net interest
income expressed as a percentage of average interest-earning assets.  Interest-
earning assets consist of loans, investment securities and Federal funds sold.
Interest-bearing liabilities consist of deposits and other borrowings.

     The Company's net interest margin decreased 21 basis points to 4.11% in
1999 as compared to 4.32% in 1998.  The yield on average interest-earning assets
decreased 59 basis points or 6.44% to 8.57% in 1999 as compared to 9.16% in
1998.  The interest rate paid on average interest-bearing liabilities decreased
37 basis points to 5.25% in 1999 as compared to 5.62% in 1998.  Net interest
income was $4,908,000 in 1999, as compared to $4,743,000 in 1998, representing
an increase of $165,000 or 3.48%.  The decrease in the yield on interest-earning
assets offset by a decrease in the rate paid on interest-bearing liabilities
resulted in a decrease in net interest income of $520,000.  This decrease in net
interest income was offset by an increase of $685,000 generated on an increase
in volume of interest-earning assets over interest-bearing liabilities in 1999.

     Average interest-earning assets increased $9,577,000 or 8.71% to
$119,492,000 in 1999 from $109,915,000 in 1998.  Average loans increased
$6,797,000; average investments increased $1,643,000; average Federal funds sold
increased $1,429,000; and average interest-bearing deposits in banks decreased
$292,000.  The increase in average interest-earning assets was funded by an
increase of $9,077,000 or 9.45%, in average deposits to $105,134,000 in 1999
from $96,057,000 in 1998.  Although, average interest-bearing deposits increased
$7,915,000 in 1999 from 1998, a significant amount of time deposits with an
average rate of 5.71% shifted to interest-bearing demand deposits with an
average rate of 4.03%.  As a result of this shift in deposits, interest paid on
average deposits increased by only $129,000 or 2.67% to $4,964,000 in 1999 as
compared to $4,835,000 in 1998.  Approximately 9.43% and 9.11% of the average
deposits were noninterest-bearing deposits in 1999 and 1998, respectively.

Allowance for Loan Losses

     The allowance for loan losses represents a reserve for potential losses in
the loan portfolio.  The adequacy of the allowance for loan losses is evaluated
periodically based on a review of all significant loans, with a particular
emphasis on nonaccruing, past due and other loans that management believes
require attention.

     The provision for loan losses is a charge to earnings in the current period
to replenish the allowance and maintain it at a level management has determined
to be adequate.  The provision for loan losses charged to earnings amounted to
$1,470,000 in 1999 as compared to $886,000 in 1998, representing an increase of
65.91% in the provision.  The significant increase in the provision in 1999
resulted from the replenishment of $736,000 for net charge-offs during the year
and the addition of $734,000 to cover an increase in average loans of $6,797,000
during the year from the prior year and to cover an increase in nonperforming
loans of approximately $938,000. The allowance for loan losses as a percentage
of total loans outstanding amounted to 2.60% at December 31, 1999 as compared to
2.01% at December 31, 1998.

                                     -21-
<PAGE>

Allowance for Loan Losses (Continued)

     The determination of the amounts allocated for loan losses is based upon
management's judgment concerning factors affecting loan quality and assumptions
about the local and national economy.  Management considers the year-end
allowances adequate to cover potential losses in the loan portfolio.


Noninterest Income

     Noninterest income amounted to $698,000 and $817,000 for the years ended
December 31, 1999 and 1998, respectively.  As a percent of total average assets,
noninterest income decreased from .70% in 1998 to .56% in 1999.

     Following is a summary of noninterest income for the years ended December
31, 1999 and 1998.

<TABLE>
<CAPTION>
                                                                                     1999               1998
                                                                                -------------      -------------
          <S>                                                                   <C>                <C>
          Noninterest income
            Income from origination of mortgage loans, less related expenses    $     170,000      $      96,000
            Service charges on deposit accounts                                       440,000            534,000
            Net realized gain on sales of securities                                    8,000                  -
            Other                                                                      80,000            187,000
                                                                                -------------      -------------
              Total noninterest income                                          $     698,000      $     817,000
                                                                                =============      =============
</TABLE>

     During 1998, the Company reorganized its mortgage banking activities within
the Bank.  This activity in the mortgage loan area continued to expand through
1999 as indicated by an increase of $74,000 in income from the origination of
mortgage loans, less related expenses.

     The decrease in service charges on deposit accounts of $94,000 or 17.60% to
$440,000 in 1999 from $534,000 in 1998 resulted from a promotional lower fee
structure implemented in 1999 on certain types of transaction accounts as an
effort to compete for those type deposit accounts and a decrease in fees earned
on overdrafts.  The decrease in other noninterest income was attributable
previously to other real estate owned transactions.

Noninterest Expense

     Noninterest expense amounted to $3,704,000 and $3,327,000 for the years
ended December 31, 1999 and 1998, respectively, representing an increase of
$377,000 or 11.33%.  As a percent of total average assets, noninterest expense
amounted to 2.95% in 1999 as compared to 2.84% in 1998.

     Following is a summary of noninterest expense for the years ended December
31, 1999 and 1998.

<TABLE>
<CAPTION>
                                                                                     1999               1998
                                                                                -------------      -------------
          <S>                                                                   <C>                <C>
          Noninterest expense
            Salaries and employee benefits                                      $   2,085,000      $   1,745,000
            Equipment and occupancy expense                                           559,000            550,000
            Advertising and business development                                      160,000            155,000
            Legal and professional                                                    220,000            217,000
            Supplies and printing                                                     154,000            150,000
            Other operating expenses                                                  526,000            510,000
                                                                                -------------      -------------
              Total noninterest expense                                         $   3,704,000      $   3,327,000
                                                                                =============      =============
</TABLE>
                                     -22-
<PAGE>

Noninterest Expense (Continued)

     Salaries and employee benefits increased $340,000 to $2,085,000 in 1999
from $1,745,000 in 1998, representing an increase of 19.48%.  The increase in
salaries and employee benefits is the result of an increase in the average
number of full-time equivalent employees of the Bank from 43 in 1998 to 50 in
1999, a 16.28% increase.  The Bank opened a separate mortgage origination
department in late 1998 and added 2 employees and a commissioned salesperson in
1999, resulting in salaries and employee benefits of $133,000 for 1999.  Other
additional employees were necessary to support the growth of the Bank.  All
other noninterest expenses increased $37,000, or 2.34%, during 1999.

     For the year ended December 31, 1999, the Company realized net income from
continuing operations of $275,000 as compared to net income from continuing
operations of $856,000 for the year ended December 31, 1998.  After recording a
net loss of $128,000 from discontinued operations and a gain of $357,000 from
disposal of assets of the discontinued business segment, the Company realized
net income of $1,085,000 for the year ended December 31, 1998.   Net income from
continuing operations decreased $581,000, or 67.87%, in 1999, primarily due to
an additional provision for loan losses in the 3rd quarter of $1,210,000.  As
previously discussed, this provision was necessary to replenish loan losses and
to provide for an increase in nonperforming loans.

Liquidity and Capital Resources

     Liquidity management involves the matching of the cash flow requirements of
customers who may be either depositors desiring to withdraw funds or borrowers
needing assurance that sufficient funds will be available to meet their credit
needs and the ability of the Company to meet those needs.  The Company seeks to
meet liquidity requirements primarily through management of short-term
investments (principally Federal funds sold)  and monthly amortizing loans.
Another source of liquidity is the repayment of maturing single payment loans.
Also, the Bank maintains relationships with correspondent banks which could
provide funds on short notice, if needed.

     The liquidity and capital resources of the Company and the Bank are
monitored on a periodic basis by state and Federal regulatory authorities.  As
determined under guidelines established by these regulatory authorities, the
Bank's liquidity ratio at December 31, 1999 was considered satisfactory.  At
that date, the Bank's short-term investments were adequate to cover any
reasonable anticipated immediate need for funds.  The Company was aware of no
events or trends likely to result in a material change in their liquidity.
During 1999, the Company's capital decreased $248,000 to $13,215,000 at December
31, 1999 as compared to $13,463,000 at December 31, 1998. Capital increased by
retaining net earnings of $76,000 (after payment of cash dividends of $199,000)
and the addition of $211,000 in capital from the exercise of stock options and
the vesting of restricted stock.  After recording an increase in unrealized
losses on securities available for sale of $535,000, total capital decreased by
$248,000.

     At December 31, 1999, the Company had no binding commitments outstanding
for capital expenditures.  However, the Company estimates that expenditures for
completion of banking facilities and purchase of equipment will amount to
approximately $1,500,000 in 2000.


                                     -23-
<PAGE>

Liquidity and Capital Resources (Continued)

     In accordance with risk capital guidelines issued by the Federal Reserve
Board, the Company is required to maintain a minimum standard of total capital
to weighted risk assets of 8%.  Additionally, all member banks must maintain
"core" or "Tier 1" capital of at least 4% of total assets ("leverage ratio").
Member banks operating at or near the 4% capital level are expected to have
well-diversified risks, including no undue interest rate risk exposure,
excellent control systems, good earnings, high asset quality, and well managed
on- and off-balance sheet activities; and, in general, be considered strong
banking organizations with a composite 1 rating under the CAMEL rating system of
banks.  For all but the most highly rated banks meeting the above conditions,
the minimum leverage ratio is to be 4% plus an additional 100 to 200 basis
points.

     The following table summarizes the regulatory capital levels of the Company
at December 31, 1999.

<TABLE>
<CAPTION>
                                                  Actual                Required                 Excess
                                          --------------------    --------------------    --------------------
                                           Amount      Percent     Amount      Percent     Amount      Percent
                                          --------     -------    --------     -------    --------     -------
                                                                 (Dollars in Thousands)
       <S>                                <C>          <C>        <C>          <C>        <C>          <C>
       Leverage capital                   $ 13,589      10.8%     $  5,020       4.0%     $  8,569       6.8%
       Risk-based capital:
        Core capital                        13,589      14.6         3,716       4.0         9,873      10.6
          Total capital                     14,768      15.9         7,432       8.0         7,336       7.9
</TABLE>

     The Bank also met its individual regulatory capital requirements at
December 31, 1999.

                                     -24-
<PAGE>

                      SELECTED STATISTICAL INFORMATION OF
                     GOLDEN ISLES FINANCIAL HOLDINGS, INC.

     The following statistical information should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operation" and the financial statements and related notes included elsewhere in
this Annual Report and in the documents incorporated herein by reference.

Average Balances and Net Income Analysis From Continuing Operations

     The following tables set forth the amount of the Company's interest income
or interest expense from continuing operations for each category of interest-
earning assets and interest-bearing liabilities and the average interest rate
for total interest-earning assets and total interest-bearing liabilities, net
interest spread and net yield on average interest-earning assets. Federally tax-
exempt income is presented on a taxable-equivalent basis assuming a 34% Federal
tax rate.

<TABLE>
<CAPTION>
                                                                  Year Ended December 31,
                                          ---------------------------------------------------------------------------------
                                                             1999                                      1998
                                          ----------------------------------------    -------------------------------------
                                                           Interest      Average                     Interest      Average
                                              Average       Income/       Yield/        Average       Income/       Yield/
                                              Balance       Expense     Rate Paid       Balance       Expense     Rate Paid
                                          ----------------------------------------    -------------------------------------
                                                                   (Dollars in Thousands)
                                          ---------------------------------------------------------------------------------
<S>                                         <C>            <C>          <C>           <C>            <C>          <C>
ASSETS
 Interest-earning assets:
   Loans, net of unearned interest          $   90,765     $   8,569       9.44%      $   83,968     $   8,516        10.14%
   Investment securities, taxable               22,017         1,334       6.06           20,374         1,254         6.15
   Federal funds sold                            6,586           329       5.00            5,157           276         5.35
   Interest-bearing deposits in banks              124             7       5.65              416            24         5.77
                                          ------------   -----------                  ----------   -----------
       Total interest-earning assets           119,492        10,239       8.57          109,915        10,070         9.16
                                          ------------   -----------                  ----------   -----------

 Noninterest-earning assets:
   Cash                                          3,022                                     2,144
   Allowance for loan losses                    (2,007)                                   (1,281)
   Unrealized gain (loss) on
     available for sale securities                (120)                                      175
   Other assets                                  5,117                                     6,272
                                          ------------                                ----------
                                                 6,012                                     7,310
                                          ------------                                ----------

       Total assets                         $  125,504                                $  117,225
                                          ============                                ==========
</TABLE>

                                     -25-
<PAGE>

Average Balances and Net Income Analysis From Continuing Operations (Continued)

<TABLE>
<CAPTION>
                                                                                Year Ended December 31,
                                                ------------------------------------------------------------------------------
                                                                    1999                                    1998
                                                --------------------------------------    ------------------------------------
                                                              Interest     Average                     Interest       Average
                                                  Average      Income/      Yield/           Average     Income/       Yield/
                                                  Balance      Expense       Rate            Balance     Expense        Rate
                                                                             Paid                                       Paid
                                                ----------   ----------   ------------    ------------  -----------  ---------
                                                                              (Dollars in Thousands)
                                                ------------------------------------------------------------------------------
<S>                                             <C>          <C>          <C>             <C>           <C>          <C>
LIABILITIES AND STOCKHOLDERS'
EQUITY
Interest-bearing liabilities:
 Savings and interest-bearing demand deposits  $    28,154   $    1,136           4.03%    $    18,462   $       732      3.96%
 Time deposits                                      67,065        3,828           5.71          68,842         4,103      5.96
 Other borrowings                                    6,237          367           5.88           5,812           352      6.06
 Notes payable                                           -            -              -           1,596           140      8.75
                                               -----------   ----------                    -----------   -----------
       Total interest-bearing liabilities          101,456        5,331           5.25          94,712         5,327      5.62
                                               -----------   ----------                    -----------   -----------

Noninterest-bearing liabilities and
 stockholders' equity:
 Demand deposits                                      9,915                                      8,753
 Other liabilities                                      719                                      1,373
 Stockholders' equity                                13,414                                     12,387
                                               ------------                                -----------
       Total noninterest-bearing liabilities
         and stockholders' equity                    24,048                                     22,513
                                               ------------                                -----------

       Total liabilities and stockholders'
         equity                                $    125,504                               $    117,225
                                               ============                               ============

Interest rate spread                                                              3.32%                                   3.54%
                                                                             =========                               =========

Net interest income                                          $    4,908                                  $     4,743
                                                             ==========                                  ===========

Net interest margin                                                               4.11%                                   4.32%
                                                                             =========                               =========
</TABLE>

                                     -26-
<PAGE>

Rate and Volume Analysis From Continuing Operations

     The following table reflects the changes in net interest income from
continuing operations resulting from changes in interest rates and from asset
and liability volume. Federally tax-exempt interest is presented on a taxable-
equivalent basis assuming a 34% Federal tax rate. The change in interest
attributable to rate has been determined by applying the change in rate between
years to average balances outstanding in the later year. The change in interest
due to volume has been determined by applying the rate from the earlier year to
the change in average balances outstanding between years. Thus, changes that are
not solely due to volume have been consistently attributed to rate.

<TABLE>
<CAPTION>
                                                              Year Ended December 31,
                                         --------------------------------------------------------------------------
                                                     1999 vs. 1998                          1998 vs. 1997
                                         --------------------------------------------------------------------------
                                           Increase        Changes Due To        Increase         Changes Due To
                                                       ---------------------                  ---------------------
                                           (Decrease)     Rate        Volume     (Decrease)      Rate        Volume
                                         ------------  ---------  ----------    -----------   ---------  ----------
                                                              (Dollars in Thousands)
                                         --------------------------------------------------------------------------
<S>                                      <C>           <C>        <C>           <C>           <C>        <C>
Increase (decrease) in:
 Income from earning assets:
   Interest and fees on loans              $       53   $   (636)   $    689    $       778   $      56  $      722
   Interest on taxable securities                  80        (21)        101            275         (24)        299
   Interest on Federal funds                       53        (23)         76            109          (7)        116
   Deposits in banks                              (17)         -         (17)            14           1          13
                                         ------------  ---------  ----------    -----------   ---------  ----------
       Total interest income                      169       (680)        849          1,176          26       1,150
                                         ------------  ---------  ----------    -----------   ---------  ----------

Expense from interest-bearing
liabilities:
 Interest on savings and interest-
   bearing demand deposits                        404         20         384            379         211         168
 Interest on time deposits                       (275)      (169)       (106)           199          13         186
 Interest on other borrowings                      15        (11)         26            113         (23)        136
 Interest on debt                                (140)         -        (140)          (123)          6        (129)
                                         ------------  ---------  ----------    -----------   ---------  ----------
       Total interest expense                       4       (160)        164            568         207         361
                                         ------------  ---------  ----------    -----------   ---------  ----------

       Net interest income                 $      165   $   (520)   $    685    $       608   $    (181) $      789
                                         ============  =========  ==========    ===========   =========  ==========
</TABLE>

                                     -27-
<PAGE>

Asset/Liability Management

     It is the objective of the Company to manage assets and liabilities to
provide a satisfactory, consistent level of profitability within the framework
of established cash, loan investment, borrowing and capital policies. Certain of
the officers of the Company are responsible for monitoring policies and
procedures that are designed to ensure acceptable composition of the
asset/liability mix, stability and leverage of all sources of funds while
adhering to prudent banking practices. It is the overall philosophy of
management to support asset growth primarily through growth of core deposits of
all categories made by individuals, partnerships and corporations. Management of
the Company seeks to invest the largest portion of the Company's assets in
commercial, consumer and real estate loans.

     The Company's asset/liability mix is monitored on a daily basis. A monthly
report reflecting interest-sensitive assets and interest-sensitive liabilities
is prepared and presented to the Company's Board of Directors. The objective of
this policy is to control interest-sensitive assets and liabilities so as to
minimize the impact of substantial movements in interest rates on the Company's
earnings.

     As of December 31, 1999, the Company's cumulative one-year interest rate
sensitivity gap ratio was 86%. This indicates that the Company's interest-
bearing liabilities will reprice during this period at a rate slightly faster
than the Company's interest-earning assets. Certain assumptions regarding the
interest sensitivity of these assets and liabilities have been incorporated into
this analysis. The Company believes that it has positioned itself to maintain
its net interest margin in the event of changes in interest rates. There can be
no assurance, however, that this strategy will be successful.

     The following table sets forth the distribution of the repricing of the
Company's earning assets and interest-bearing liabilities as of December 31,
1999, the interest rate sensitivity gap (i.e., interest rate sensitive assets
less interest rate sensitive liabilities), the cumulative interest rate
sensitivity gap ratio (i.e., interest rate sensitive assets divided by interest
rate sensitive liabilities) and the cumulative sensitivity gap ratio. The table
also sets forth the time periods in which earning assets and liabilities will
mature or may reprice in accordance with their contractual terms. However, the
table does not necessarily indicate the impact of general interest rate
movements on the net interest margin since the repricing of various categories
of assets and liabilities is subject to competitive pressures and the needs of
the Bank's customers. In addition, various assets and liabilities indicated as
repricing within the same period may in fact reprice at different times within
such period and at different rates.

                                     -28-
<PAGE>

Asset/Liability Management (Continued)

<TABLE>
<CAPTION>
                                                                            At December 31, 1999
                                                    ------------------------------------------------------------------
                                                                         Maturing or Repricing Within
                                                    ------------------------------------------------------------------
                                                       Zero to        Three          One
                                                        Three       Months to      Year to       Over
                                                       Months       One Year        Five         Five         Total
                                                                                    Years        Years
                                                    -----------   ------------   -----------  ----------   -----------
                                                                           (Dollars in Thousands)
                                                    ------------------------------------------------------------------
<S>                                                 <C>           <C>            <C>          <C>          <C>
Earning assets:
 Interest-bearing deposits in banks                   $      14    $         -     $       -    $      -    $       14
 Federal funds sold                                       6,945              -             -           -         6,945
 Investment securities                                      366              -         9,967       9,479        19,812
 Loans                                                   60,162         11,501        21,598       4,985        98,246
                                                    -----------   ------------   -----------  ----------   -----------
                                                         67,487         11,501        31,565      14,464       125,017
                                                    -----------   ------------   -----------  ----------   -----------
Interest-bearing liabilities:
 Interest-bearing demand deposits                        27,532              -             -           -        27,532
 Savings                                                  2,511              -             -           -         2,511
 Certificates less than $100,000                         14,281         28,908         9,400         264        52,853
 Certificates, $100,000 and over                          5,556         11,947         1,922         105        19,530
 Other borrowings                                            90            514         2,742       2,543         5,889
                                                    -----------   ------------   -----------  ----------   -----------
                                                         49,970         41,369        14,064       2,912       108,315
                                                    -----------   ------------   -----------  ----------   -----------

Interest rate sensitivity gap                         $  17,517    $   (29,868)    $  17,501    $ 11,552    $   16,702
                                                    ===========   ============   ===========  ==========   ===========

Cumulative interest rate sensitivity gap              $  17,517    $   (12,351)    $   5,150    $ 16,702
                                                    ===========   ============   ===========  ==========

Interest rate sensitivity gap ratio                        1.35           0.28          2.24        4.97
                                                    ===========   ============   ===========  ==========

Cumulative interest rate sensitivity gap ratio             1.35           0.86          1.05        1.15
                                                    ===========   ============   ===========  ==========
</TABLE>

     The Company manages the mix of asset and liability maturities in an effort
to control the effects of changes in the general level of interest rates on net
interest income. Except for its effect on the general level of interest rates,
inflation does not have a material impact on the Company due to the rate
variability and short-term maturities of its earning assets. In particular,
approximately 73% of the loan portfolio is comprised of loans which mature or
reprice within one year or less. Mortgage loans, primarily with five to fifteen
year maturities, are also made on a variable rate basis with rates being
adjusted every one to five years.

                                     -29-

<PAGE>

                             INVESTMENT PORTFOLIO

Types of Investments

     The amortized cost and fair value of investments in securities available
for sale at the dates indicated are summarized as follows:

<TABLE>
<CAPTION>
                                                                        Gross           Gross
                                                    Amortized        Unrealized       Unrealized          Fair
                                                       Cost             Gains           Losses            Value
                                                ----------------   -------------   -------------    --------------
                                                                       (Dollars in Thousands)
                                                ------------------------------------------------------------------
<S>                                             <C>                <C>             <C>              <C>
     December 31, 1999:
       U. S. Government and agency securities    $        16,646    $          3    $       (534)    $       16,115
       Mortgage-backed securities                          2,800               -             (36)             2,764
                                                 ---------------    ------------    ------------     --------------
                                                  $       19,446    $          3    $       (570)    $       18,879
                                                 ===============    ============    ============     ==============

     December 31, 1998:
       U. S. Government and agency securities     $       21,151     $       243     $         -      $      21,394
       Mortgage-backed securities                          1,095               3              (1)             1,097
                                                 ---------------    ------------    ------------     --------------
                                                  $       22,246     $       246    $         (1)    $       22,491
                                                 ===============    ============    ============     ==============
</TABLE>

     Other investments consists of Federal Home Loan Bank stock, and it is
carried at cost. The stock is considered a restricted equity investment as it
can only be sold back to the Federal Home Loan Bank or another member bank at
par value. At December 31, 1999 and 1998, the Company's total investment in
Federal Home Loan Bank stock was $366,000 and $552,000, respectively.

                                     -30-

<PAGE>

Maturities

     The amounts of investments in securities in each category as of December
31, 1999 are shown in the following table according to contractual maturity
classifications (1) one year or less, (2) after one year through five years, (3)
after five years through ten years, and (4) after ten years.

<TABLE>
<CAPTION>
                                                           U. S. Treasury
                                                           and Other U. S.
                                                         Government Agencies                     State and
                                                          and Corporations               Political Subdivisions
                                                                        Yield
                                                      Amount             (1)              Amount           Yield
                                                 ---------------   --------------    --------------   -------------
                                                                        (Dollars in Thousands)
                                                 ------------------------------------------------------------------
<S>                                              <C>               <C>               <C>              <C>
      Maturity:
      One year or less                           $             -                -%   $            -              - %
      After one year through five years                    9,967             6.09                 -              -
      After five years through ten years                   7,497             6.09                 -              -
      After ten years                                      1,982             5.78                 -              -
                                                 ---------------   --------------    --------------   -------------
                                                 $        19,446             6.06%   $            -              - %
                                                 ===============   ==============    ==============   =============
</TABLE>

(1)  Yields were computed using coupon interest, adding discount accretion or
     subtracting premium amortization, as appropriate, on a ratable basis over
     the life of each security. The weighted average yield for each maturity
     range was computed using the acquisition price of each security in that
     range.


                                     -31-

<PAGE>

                                LOAN PORTFOLIO

Types of Loans

     Management believes that the Company's loan portfolio is adequately
diversified. The loan portfolio contains no foreign or energy-related loans or
significant concentrations in any one industry, with the exception of real
estate mortgage loans, which constituted approximately 79% of the Company's loan
portfolio as of December 31, 1999. The amount of loans outstanding at the
indicated dates is shown in the following table according to type of loans.

<TABLE>
<CAPTION>
                                                                          December 31,
                                                         -------------------------------------------
                                                                1999                    1998
                                                         ------------------      -------------------
                                                                    (Dollars in Thousands)
                                                         -------------------------------------------
<S>                                                      <C>                     <C>
   Commercial, financial and agricultural                  $         15,197        $          19,251
   Real estate - construction                                         7,472                    6,770
   Real estate -  mortgage                                           70,302                   58,502
   Consumer instalment                                                5,166                    6,150
   Other                                                                109                      101
                                                         ------------------      -------------------
                                                                     98,246                   90,774
   Allowance for loan losses                                         (2,559)                  (1,825)
                                                         ------------------      -------------------
   Loans, net                                              $         95,687        $          88,949
                                                         ==================      ===================
</TABLE>

     Total loans as of December 31, 1999 are shown in the following table
according to maturity or repricing opportunities (1) one year or less, (2) after
one year through five years, and (3) after five years.

<TABLE>
<CAPTION>
                                                                                     (Dollars in
                                                                                     Thousands)
                                                                                 -----------------
<S>                                                                              <C>
Maturity or Repricing Within:
 One year or less                                                                  $        71,663
 After one year through five years                                                          21,598
 After five years                                                                            4,985
                                                                                 -----------------
                                                                                   $        98,246
                                                                                 =================
</TABLE>

     Records were not available to present the above information in each
category listed in the first paragraph above and could not be reconstructed
without undue burden.

                                     -32-

<PAGE>

Types of Loans (Continued)

     The following table summarizes loans at December 31, 1999 with the due
dates after one year which (1) have predetermined interest rates and (2) have
floating or adjustable interest rates.

<TABLE>
<CAPTION>
                                                                                                            (Dollars in
                                                                                                            Thousands)
                                                                                                        -----------------
<S>                                                                                                     <C>
Predetermined interest rates                                                                              $        26,583
Floating or adjustable interest rates                                                                                   -
                                                                                                        -----------------
                                                                                                          $        26,583
                                                                                                        =================
</TABLE>

Nonperforming Loans

     The following table presents, at the dates indicated, the aggregate of
nonperforming loans for the categories indicated from continuing operations.

<TABLE>
<CAPTION>
                                                                                                      December 31,
                                                                                          ----------------------------------
                                                                                                  1999               1998
                                                                                          ---------------    ---------------
                                                                                                 (Dollars in Thousands)
                                                                                          ----------------------------------
<S>                                                                                       <C>                <C>
   Loans accounted for on a nonaccrual basis                                                $       1,809      $       1,310

   Instalment loans and term loans contractually past due ninety days or more                         392                 86
    as to interest or principal payments and still accruing

   Loans, the terms of which have been renegotiated to provide a reduction                            632                499
    or deferral of interest or principal because of deterioration in the
    financial position of the borrower
</TABLE>

     In the opinion of management, any loans classified by regulatory
authorities as doubtful, substandard or special mention that have not been
disclosed above do not (i) represent or result from trends or uncertainties
which management reasonably expects will materially impact future operating
results, liquidity or capital resources, or (ii) represent material credits
about which management is aware of any information which causes management to
have serious doubts as to the ability of such borrowers to comply with the loan
repayment terms. Any loans classified by regulatory authorities as loss have
been charged off.

                                     -33-

<PAGE>

Commitments and Lines of Credit

     In the ordinary course of business, the Bank has granted commitments to
extend credit to approved customers. Generally, these commitments to extend
credit have been granted on a temporary basis for seasonal or inventory
requirements and have been approved by the Bank's Board of Directors. The Bank
has also granted commitments to approved customers for standby letters of
credit. These commitments are recorded in the financial statements when funds
are disbursed or the financial instruments become payable. The Bank uses the
same credit policies for these off balance sheet commitments as it does for
financial instruments that are recorded in the consolidated financial
statements. Commitments generally have fixed expiration dates or other
termination clauses and may require payment of a fee. Since many of the
commitment amounts expire without being drawn upon, the total commitment amounts
do not necessarily represent future cash requirements.

     Following is a summary of the commitments outstanding at December 31, 1999
and 1998.

<TABLE>
<CAPTION>
                                                         1999               1998
                                                    ---------------    ---------------
                                                           (Dollars in Thousands)
                                                    ----------------------------------
<S>                                                 <C>                <C>
    Commitments to extend credit                      $      12,304      $      10,248
    Standby letters of credit                                   705                825
                                                    ---------------    ---------------
                                                      $      13,009      $      11,073
                                                    ===============    ===============
</TABLE>

                                     -34-

<PAGE>

                        SUMMARY OF LOAN LOSS EXPERIENCE

     The provision for possible loan losses is created by direct charges to
operations. Losses on loans are charged against the allowance in the period in
which such loans, in management's opinion, become uncollectible. Recoveries
during the period are credited to this allowance. The factors that influence
management's judgment in determining the amount charged to operating expense are
past loan experience, composition of the loan portfolio, evaluation of possible
future losses, current economic conditions and other relevant factors. The
Company's allowance for loan losses was approximately $2,559,000 at December 31,
1999, representing 2.60% of year end total loans outstanding, compared with
$1,825,000 at December 31, 1998, which represented 2.01% of year end total loans
outstanding. The allowance for loan losses is reviewed monthly based on
management's evaluation of current risk characteristics of the loan portfolio,
as well as the impact of prevailing and expected economic business conditions.
Management considers the allowance for loan losses adequate to cover possible
loan losses on the loans outstanding.

Allocation of the Allowance for Loan Losses

     The following table sets forth the breakdown of the allowance for loan
losses by loan category for the periods indicated. Management believes the
allowance can be allocated only on an approximate basis. The allocation of the
allowance to each category is not necessarily indicative of future losses and
does not restrict the use of the allowance to absorb losses in any other
category.

<TABLE>
<CAPTION>
                                                                  At December 31,
                                          ------------------------------------------------------------
                                                        1999                            1998
                                          ------------------------------    --------------------------
                                                             Percent of                    Percent of
                                                              Loans in                       Loans in
                                                              Category                       Category
                                                              to Total                       to Total
                                              Amount            Loans           Amount        Loans
                                          ------------    --------------    ------------    ----------
                                                              (Dollars in Thousands)
                                          ------------------------------------------------------------
<S>                                       <C>             <C>               <C>             <C>
    Commercial, financial,
      industrial and agricultural           $    1,756                16%     $      867            21%
    Real estate                                    688                79             824            72
    Consumer                                       115                 5             122             7
    Unallocated                                      -                 -              12             -
                                          ------------    --------------    ------------    ----------
                                            $    2,559               100%     $    1,825           100%
                                          ============    ==============    ============    ==========
</TABLE>

                                     -35-

<PAGE>

Allocation of the Allowance for Loan Losses (Continued)

     The following table presents an analysis of the Company's loan loss
experience from continuing operations and discontinued operations for the
periods indicated:

<TABLE>
<CAPTION>
                                                                                  December 31,
                                                                     -----------------------------------
                                                                             1999                1998
                                                                     ---------------     ---------------
                                                                            (Dollars in Thousands)
                                                                     -----------------------------------
<S>                                                                  <C>                 <C>
   Average amount of loans outstanding                                 $      90,765       $      83,968
                                                                     ===============     ===============

   Balance of reserve for possible loan losses at
    beginning of period                                                $       1,825       $       1,200
                                                                     ---------------     ---------------

   Charge-offs:
    Commercial, financial and agricultural                                      (460)               (276)
    Real estate                                                                 (210)                 (4)
    Consumer                                                                    (134)               (132)
   Recoveries:
    Commercial, financial and agricultural                                        21                  99
    Real estate                                                                   14                   7
    Consumer                                                                      33                  45
                                                                     ---------------     ---------------
       Net charge-offs                                                          (736)               (261)
                                                                     ---------------     ---------------

   Additions to reserve charged to operating expenses                          1,470                 886
                                                                     ---------------     ---------------

       Balance of reserve for possible loan losses                     $       2,559       $       1,825
                                                                     ===============     ===============

   Ratio of net loan charge-offs to average loans                               0.81%               0.31%
                                                                     ===============     ===============
</TABLE>


                                     -36-

<PAGE>

                                   DEPOSITS

     Average amount of deposits and average rate paid thereon, classified as to
noninterest-bearing demand deposits, interest-bearing demand and savings
deposits and time deposits, for the periods indicated are presented below.

<TABLE>
<CAPTION>
                                                                                         Year Ended December 31,
                                                              -------------------------------------------------------------------
                                                                             1999                                1998
                                                              ---------------------------------    ------------------------------
                                                                    Amount           Rate              Amount            Rate
                                                              ---------------   ---------------    ---------------   ------------
                                                                                         (Dollars in Thousands)
                                                              -------------------------------------------------------------------
<S>                                                           <C>               <C>                <C>               <C>
   Noninterest-bearing demand deposits                          $         9,915               -%    $        8,753              -%
   Interest-bearing demand and savings deposits                          28,154            4.03             18,462           3.96
   Time deposits                                                         67,065            5.71             68,842           5.96
                                                                  -------------                      -------------
       Total deposits                                           $       105,134                      $      96,057
                                                                  =============                      =============
</TABLE>

     The amounts of time certificates of deposit issued in amounts of $100,000
or more as of December 31, 1999, are shown below by category, which is based on
time remaining until maturity of (1) three months or less, (2) over three
through twelve months and (3) over twelve months.

<TABLE>
<CAPTION>
                                                  (Dollars in
                                                  Thousands)
                                               ---------------
<S>                                            <C>
   Three months or less                        $         5,556
   Over three through twelve months                     11,947
   Over twelve months                                    2,027
                                               ---------------
         Total                                 $        19,530
                                               ===============
</TABLE>

                                     -37-
<PAGE>

                   RETURN ON ASSETS AND STOCKHOLDERS' EQUITY

     The following rate of return information for the periods indicated is
presented below.

<TABLE>
<CAPTION>
                                                    Year Ended December 31,
                                              ----------------------------------
                                                    1999               1998
                                              --------------     ---------------
<S>                                           <C>                <C>
   Return on assets (1)                                 0.22%               0.89%

   Return on equity (2)                                 2.05                8.76

   Dividend payout ratio (3)                           72.35*                  -

   Equity to assets ratio (4)                          10.69               10.19
</TABLE>

(1)  Net income divided by average total assets.
(2)  Net income divided by average equity.
(3)  Dividends declared per share divided by net income per share.
(4)  Average equity divided by average total assets.


*    The 1999 dividends of $.08 per share were based on the 1998 earnings of
     $1,085,000, or $.45 per share.

                                     -38-
<PAGE>

ITEM 7.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The following consolidated financial statements of the Company and its
subsidiaries are included on pages F-1 through F-39 of this Annual Report on
Form 10-KSB.

     Consolidated Balance Sheets - December 31, 1999 and 1998

     Consolidated Statements of Income - Years ended December 31, 1999 and 1998

     Consolidated Statements of Comprehensive Income (Loss) - Years ended
       December 31, 1999 and 1998

     Consolidated Statements of Stockholders' Equity - Years ended December 31,
       1999 and 1998

     Consolidated Statements of Cash Flows - Years ended December 31, 1999 and
       1998

     Notes to Consolidated Financial Statements.

                                     -39-
<PAGE>

                     GOLDEN ISLES FINANCIAL HOLDINGS, INC.


                  INDEX TO FINANCIAL STATEMENTS AND SCHEDULES


Consolidated financial statements:

     Independent Auditor's Report
     Consolidated Balance Sheets - December 31, 1999 and 1998
     Consolidated Statements of Income - Years ended December 31, 1999 and 1998
     Consolidated Statements of Comprehensive Income (Loss) - Years ended
       December 31, 1999 and 1998
     Consolidated Statements of Stockholders' Equity - Years ended December 31,
       1999 and 1998
     Consolidated Statements of Cash Flows - Years ended December 31, 1999 and
       1998
     Notes to Consolidated Financial Statements

                                     -40-
<PAGE>

                         INDEPENDENT AUDITOR'S REPORT
================================================================================

To the Board of Directors
Golden Isles Financial Holdings, Inc.
 and Subsidiary
St. Simons Island, Georgia

          We have audited the accompanying consolidated balance sheets of Golden
Isles Financial Holdings, Inc. and Subsidiary as of December 31, 1999 and 1998
and the related consolidated statements of income, comprehensive income (loss),
stockholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial 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 audits 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
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 Golden
Isles Financial Holdings, Inc. and Subsidiary as of December 31, 1999 and 1998,
and the results of their operations and their cash flows for the years then
ended, in conformity with generally accepted accounting principles.


                                             /s/ Mauldin & Jenkins, LLC

Albany, Georgia
January 21, 2000

                                     -41-
<PAGE>

                     GOLDEN ISLES FINANCIAL HOLDINGS, INC.
                                AND SUBSIDIARY

                          CONSOLIDATED BALANCE SHEETS
                          DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                                                             1999                  1998
                                                                  ----------------------    -------------------
<S>                                                                <C>                       <C>
Assets
------
Cash and due from banks                                           $            4,017,512     $       3,008,387
Interest-bearing deposits in banks                                                13,888               122,754
Federal funds sold                                                             6,945,000             2,550,000
Securities available for sale, at fair value                                  18,878,399            22,490,648
Other investments, at cost                                                       366,400               552,500

Loans                                                                         98,246,349            90,774,151
Less allowance for loan losses                                                 2,559,153             1,825,319
                                                                  ----------------------    -------------------
          Loans, net                                                          95,687,196            88,948,832
                                                                  ----------------------    -------------------

Premises and equipment, net                                                    3,408,237             3,015,992
Other assets                                                                   3,080,575             1,543,509
                                                                  ----------------------    -------------------

          Total assets                                            $          132,397,207     $     122,232,622
                                                                  ======================    ===================


Liabilities and Stockholders' Equity
------------------------------------
Deposits
    Noninterest-bearing demand                                    $           10,316,942     $       9,743,289
    Interest-bearing demand                                                   27,531,519            22,012,678
    Savings                                                                    2,511,320             1,687,203
    Time, $100,000 and over                                                   19,529,633            15,866,520
    Other time                                                                52,853,492            51,962,231
                                                                  ----------------------    -------------------
          Total deposits                                                     112,742,906           101,271,921
    Federal Home Loan Bank borrowings                                          5,888,829             6,500,500
    Other liabilities                                                            550,780               997,325
                                                                  ----------------------    -------------------
          Total liabilities                                                  119,182,515           108,769,746
                                                                  ----------------------    -------------------


Stockholders' equity
    Common stock, no par value; 50,000,000
        shares authorized; 2,501,500 and 2,474,377
        shares issued and outstanding                                          1,094,338             1,094,338
    Capital surplus                                                           11,693,718            11,482,666
    Retained earnings                                                            800,904               724,462
    Accumulated other comprehensive income (loss)                               (374,268)              161,410
                                                                  ----------------------    -------------------
          Total stockholders' equity                                          13,214,692            13,462,876
                                                                  ----------------------    -------------------

          Total liabilities and stockholders' equity              $          132,397,207     $     122,232,622
                                                                  ======================    ===================
</TABLE>

See Notes to Consolidated Financial Statements.

                                     -42-
<PAGE>

                     GOLDEN ISLES FINANCIAL HOLDINGS, INC.
                                AND SUBSIDIARY

                       CONSOLIDATED STATEMENTS OF INCOME
                    YEARS ENDED DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                                                                1999                1998
                                                                          ----------------   ------------------
<S>                                                                       <C>                <C>
Interest income
    Interest and fees on loans                                            $     8,568,537    $       8,516,072
    Interest and dividends on taxable securities                                1,334,074            1,253,741
    Other interest income                                                         335,991              300,089
                                                                          ----------------   ------------------
          Total interest income                                                10,238,602           10,069,902
                                                                          ----------------   ------------------

Interest expense
    Interest on deposits                                                        4,963,675            4,834,167
    Interest on other borrowings                                                  367,243              492,034
                                                                          ----------------   ------------------
          Total interest expense                                                5,330,918            5,326,201
                                                                          ----------------   ------------------

          Net interest income                                                   4,907,684            4,743,701
Provision for loan losses                                                       1,470,000              886,000
                                                                          ----------------   ------------------
          Net interest income after provision for loan losses                   3,437,684            3,857,701
                                                                          ----------------   ------------------

Other income
    Income from origination of mortgage loans,
        less related expenses                                                     169,903               95,859
    Service charges on deposit accounts                                           440,074              533,979
    Net realized gain on sales of securities                                        8,257                    -
    Other                                                                          79,751              146,529
                                                                          ----------------   ------------------
          Total other income                                                      697,985              776,367
                                                                          ----------------   ------------------

Other expense
    Salaries and employee benefits                                              2,085,017            1,744,761
    Equipment and occupancy expense                                               559,123              549,944
    Advertising and business development                                          159,802              154,623
    Legal and professional                                                        220,274              216,950
    Supplies and printing                                                         154,243              150,224
    Other operating expenses                                                      525,769              510,275
                                                                          ----------------   ------------------
          Total other expense                                                   3,704,228            3,326,777
                                                                          ----------------   ------------------

          Income from continuing operations
             before income tax                                                    431,441            1,307,291

Applicable income tax                                                             156,322              451,540
                                                                          ----------------   ------------------

          Income from continuing operations                                       275,119              855,751

Discontinued operations
    Loss from operations, less applicable income tax
        benefit of $62,904                                                              -             (128,103)
    Gain from disposal of business segment, less applicable
        income tax of $184,173                                                          -              357,513
                                                                          ----------------   ------------------

          Net income                                                      $       275,119    $       1,085,161
                                                                          ================   ==================
</TABLE>

                                     -43-
<PAGE>

                     GOLDEN ISLES FINANCIAL HOLDINGS, INC.
                                AND SUBSIDIARY

                       CONSOLIDATED STATEMENTS OF INCOME
                    YEARS ENDED DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
                                                                      1999               1998
                                                                ----------------   ---------------
<S>                                                             <C>                <C>
Basic earnings (loss) per common share:
    Income from continuing operations                           $          0.11    $         0.35
    Loss from discontinued operations                                         -             (0.05)
    Gain from disposal of business segment                                    -              0.15
                                                                ----------------   ---------------
    Net income                                                  $          0.11    $         0.45
                                                                ================   ===============

Diluted earnings (loss) per common share:
    Income from continuing operations                           $          0.11              0.35
    Loss from discontinued operations                                         -             (0.05)
    Gain from disposal of business segment                                    -              0.14
                                                                ----------------   ---------------
    Net income                                                  $          0.11    $         0.44
                                                                ================   ===============
</TABLE>

See Notes to Consolidated Financial Statements.

                                     -44-
<PAGE>

                     GOLDEN ISLES FINANCIAL HOLDINGS, INC.
                                AND SUBSIDIARY

            CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                    YEARS ENDED DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
                                                                          1999           1998
                                                                     ------------    --------------
<S>                                                                  <C>             <C>
Net income                                                           $    275,119    $   1,085,161
                                                                     ------------    --------------

Other comprehensive income (loss):
  Net unrealized holding gains (losses) on securities
    available for sale arising during period, net of taxes
    (benefits) of ($273,425) and $54,104, respectively                   (530,228)         104,488
  Reclassification adjustment for gains included in
    net income, net of taxes of $2,807                                     (5,450)               -
                                                                     ------------    -------------
Total other comprehensive income (loss)                                  (535,678)         104,488
                                                                     ------------    -------------

Comprehensive income (loss)                                          $   (260,559)   $   1,189,649
                                                                     ============    =============
</TABLE>

See Notes to Consolidated Financial Statements.


                                     -45-
<PAGE>

                     GOLDEN ISLES FINANCIAL HOLDINGS, INC.
                                AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                    YEARS ENDED DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------

                                                                                                    Accumulated
                                                                                        Retained      Other            Total
                                             Common Stock              Capital          Earnings    Comprehensive    Stockholders'
                                    ------------------------------
                                      Shares           Par Value       Surplus          (Deficit)   Income (Loss)      Equity
                                    -------------    -------------   --------------   -----------  --------------    -------------
<S>                                 <C>              <C>             <C>              <C>          <C>               <C>
Balance, December 31, 1997              2,313,645    $   1,094,338   $    9,959,244   $  (360,699) $       56,922    $  10,749,805
    Net income                                  -                -                -     1,085,161               -        1,085,161
    Vesting of restricted stock                 -                -           32,466             -               -           32,466
    Proceeds from exercise
        of stock warrants, net
        of expenses                       149,970                -        1,414,878             -               -        1,414,878
    Proceeds from exercise
        of stock options                   10,762                -           76,078             -               -           76,078
    Other comprehensive
        income                                  -                -                -             -         104,488          104,488
                                    -------------    -------------   --------------   -----------  --------------  ---------------
Balance, December 31, 1998              2,474,377        1,094,338       11,482,666       724,462         161,410       13,462,876
    Net income                                  -                -                -       275,119               -          275,119
    Dividends paid, $0.08 per share             -                -                -      (198,677)              -         (198,677)
    Vesting of restricted stock                 -                -           37,164             -               -           37,164
    Proceeds from exercise
        of stock options                   27,123                -          173,888             -               -          173,888
    Other comprehensive
        loss                                    -                -                -             -        (535,678)        (535,678)
                                    -------------    -------------   --------------  ------------  --------------  ---------------
Balance, December 31, 1999              2,501,500    $   1,094,338   $   11,693,718  $    800,904  $     (374,268) $    13,214,692
                                    =============    =============   ==============  ============  ==============  ===============
</TABLE>

See Notes to Consolidated Financial Statements.

                                     -46-
<PAGE>

                     GOLDEN ISLES FINANCIAL HOLDINGS, INC.
                                AND SUBSIDIARY

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                    YEARS ENDED DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                                                      1999                   1998
                                                                                 --------------         --------------
<S>                                                                              <C>                    <C>
OPERATING ACTIVITIES
    Net income                                                                   $      275,119         $    1,085,161
    Deduct income from discontinued operations                                                -               (229,410)
                                                                                 --------------         --------------
    Income from continuing operations                                                   275,119                855,751
    Adjustments to reconcile income from continuing operations
        to net cash provided by continuing operations:
        Depreciation                                                                    292,102                283,415
        Provision for loan losses                                                     1,470,000                886,000
        Provision for deferred taxes                                                   (159,224)              (171,747)
        Net loss on disposal of premises and equipment                                   21,346                 57,170
        Net realized gain on securities transactions                                     (8,257)                     -
        Decrease in loans held for sale, net                                                  -                307,457
        Decrease (increase) in interest receivable                                       60,181                (87,861)
        Increase (decrease) in interest payable                                          16,728                 (2,330)
        Increase in taxes receivable                                                   (126,894)                     -
        Decrease (increase) in taxes payable                                           (445,442)               400,402
        Net change in other prepaids and accruals                                       (43,563)               258,735
                                                                                 --------------         --------------
              Net cash provided by continuing operations                              1,352,096              2,786,992
              Net cash provided by discontinued operations                                    -                 37,193
                                                                                 --------------         --------------
              Net cash provided by operating activities                               1,352,096              2,824,185
                                                                                 --------------         --------------

INVESTING ACTIVITIES
    Decrease (increase) in interest-bearing deposits in bank                            108,866               (100,080)
    Increase in Federal funds sold                                                   (4,395,000)              (220,000)
    Available for sale securities:
        Proceeds from sales and calls                                                11,015,465              5,340,549
        Proceeds from maturities and paydowns                                         3,281,826              2,406,673
        Proceeds from redemption of Federal Home
            Loan Bank stock                                                             186,100                      -
        Purchases                                                                   (11,488,695)           (13,291,776)
    Increase in loans, net                                                           (9,217,529)           (11,631,711)
    Purchase of premises and equipment                                                 (705,988)              (354,969)
    Proceeds from sales of premises and equipment                                           295                  3,950
    Proceeds from sales of assets from
        discontinued operations                                                               -              9,571,022
                                                                                 --------------         --------------

              Net cash used in investing activities                                 (11,214,660)            (8,276,342)
                                                                                 --------------         --------------
</TABLE>

                                     -47-
<PAGE>

                     GOLDEN ISLES FINANCIAL HOLDINGS, INC.
                                AND SUBSIDIARY

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                    YEARS ENDED DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
                                                                                            1999                 1998
                                                                                      ----------------       ---------------
<S>                                                                                   <C>                    <C>
FINANCING ACTIVITIES
    Net increase in deposits                                                          $     11,470,985       $    10,481,164
    Net decrease in notes payable                                                                    -            (9,367,458)
    Net (decrease) increase in Federal Home Loan
        Bank borrowings                                                                       (611,671)            2,621,329
    Dividends paid                                                                            (198,677)                    -
    Vesting of restricted stock                                                                 37,164                32,466
    Proceeds from exercise of stock warrants                                                         -             1,414,878
    Proceeds from exercise of stock options                                                    173,888                76,078
                                                                                      ----------------       ---------------

              Net cash provided by financing activities                                     10,871,689             5,258,457
                                                                                      ----------------       ---------------

Net increase (decrease) in cash and due from banks                                           1,009,125              (193,700)

Cash and due from banks at beginning of year                                                 3,008,387             3,202,087
                                                                                      ----------------       ---------------

Cash and due from banks at end of year                                                $      4,017,512       $     3,008,387
                                                                                      ================       ===============

SUPPLEMENTAL DISCLOSURES
    Cash paid for:
        Interest                                                                      $      5,314,190       $     5,783,368

        Income taxes                                                                  $        887,882       $       222,885


NONCASH TRANSACTIONS
    Unrealized (gains) losses on securities
        available for sale                                                            $        811,910       $      (158,592)

    Principal balances of loans transferred to
        other real estate owned                                                       $      1,009,165       $       294,774
</TABLE>

See Notes to Consolidated Financial Statements.

                                     -48-
<PAGE>

                     GOLDEN ISLES FINANCIAL HOLDINGS, INC.
                                AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          Nature of Business

               Golden Isles Financial Holdings, Inc. (the "Company") is a bank
               holding company whose business is conducted by its wholly-owned
               subsidiary, The First Bank of Brunswick (the "Bank").  The Bank
               is a commercial bank located in Brunswick, Glynn County, Georgia
               with one branch located on St. Simons Island, Georgia.  The Bank
               provides a full range of banking services in its primary market
               area of Glynn County and surrounding counties.

          Basis of Presentation

               The preparation of financial statements in conformity with
               generally accepted accounting principles requires management to
               make estimates and assumptions that affect the reported amounts
               of assets and liabilities and disclosures of contingent assets
               and liabilities as of the balance sheet date and 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, the valuation of foreclosed real estate, and deferred tax
               assets.

               The Company's consolidated financial statements include the
               accounts of the Company and the Bank. All significant
               intercompany transactions and accounts have been eliminated in
               consolidation.

          Reclassification of Certain Items

               Certain items in the consolidated financial statements as of and
               for the year ended December 31, 1998 have been reclassified, with
               no effect on total assets, total capital or net income, to be
               consistent with the classifications adopted for the year ended
               December 31, 1999.

                                     -49-
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          Cash and Due From Banks

               Cash on hand, cash items in process of collection, and amounts
               due from banks are included in cash and due from banks.

               The Company maintains amounts due from banks which, at times, may
               exceed Federally insured limits. The Company has not experienced
               any losses in such accounts.

          Securities

               Securities are classified based on management's intention on the
               date of purchase.  All debt securities are classified as
               available for sale and recorded at fair value with unrealized
               gains and losses reported in other comprehensive income (losses).
               Other investments consists of Federal Home Loan Bank stock, a
               restricted equity security.  The stock can be redeemed at par
               value back to the Federal Home Loan Bank or another member bank.
               The stock is recorded at cost.

               Interest and dividends on securities, including amortization of
               premiums and accretion of discounts, are included in interest
               income.  Realized gains and losses from the sale of securities
               are determined using the specific identification method.

          Loans

               Loans are reported at their outstanding principal balances less
               unearned income and the allowance for loan losses.  Interest
               income is accrued based on the principal balance outstanding.

               Fees on loans and costs incurred in origination of loans are
               recognized at the time the loan is placed on the books.  Because
               these loan fees and costs are not significant and the majority of
               loans have maturities of one year or less, the results of
               operations are not materially different than the results which
               would be obtained by accounting for loan fees and costs in
               accordance with generally accepted accounting principles.

                                     -50-
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          Loans (Continued)

               The accrual of interest on loans is discontinued when, in
               management's opinion, the borrower may be unable to meet payments
               as they become due.  Unless, in management's opinion, the
               borrower's impairment is only temporary, all interest accrued but
               not collected for loans that are placed on nonaccrual status or
               charged off is reversed against interest income.  Interest income
               is subsequently recognized only to the extent cash payments are
               received.

               The allowance for loan losses is maintained at a level that
               management believes to be adequate to absorb potential losses in
               the loan portfolio.  Loan losses are charged against the
               allowance when management believes the uncollectibility of a loan
               is confirmed.  Subsequent recoveries are credited to the
               allowance.  Management's determination of the adequacy of the
               allowance is based on an evaluation of the portfolio, past loan
               loss experience, current economic conditions, volume, growth,
               composition of the loan portfolio, and other risks inherent in
               the portfolio.  This evaluation is inherently subjective as it
               requires material estimates that are susceptible to significant
               change including the amounts and timing of future cash flows
               expected to be received on impaired loans.  In addition,
               regulatory agencies, as an integral part of their examination
               process, periodically review the Company's allowance for loan
               losses, and may require the Company to record additions to the
               allowance based on their judgment about information available to
               them at the time of their examinations.

               A loan is considered impaired when it is probable the Company
               will be unable to collect all principal and interest payments due
               in accordance with the contractual terms of the loan agreement.
               Individually identified impaired loans are measured based on the
               present value of expected payments using the contractual loan
               rate as the discount rate, the loan's observable market price, or
               the fair value of the collateral if the loan is collateral
               dependent.  If the recorded investment in the impaired loan
               exceeds the measure of fair value, a valuation allowance is
               established as a component of the allowance for loan losses.
               Changes to the valuation allowance are recorded as a component of
               the provision for loan losses.

          Premises and Equipment

               Land is carried at cost.  Premises and equipment are carried at
               cost less accumulated depreciation computed principally by the
               straight-line method over the estimated useful lives of the
               assets.

                                     -51-
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          Other Real Estate Owned

               Other real estate owned represents properties acquired through
               foreclosure.  Other real estate owned is held for sale and is
               carried at the lower of the recorded amount of the loan or fair
               value of the properties less estimated selling costs.  Any write-
               down to fair value at the time of transfer to other real estate
               owned is charged to the allowance for loan losses.  Subsequent
               gains or losses on sale and any subsequent adjustment to the
               value are recorded as other expenses.  The carrying amount of
               other real estate owned at December 31, 1999 and 1998 was
               $1,047,785 and $44,810, respectively.

          Income Taxes

               Income tax expense consists of current and deferred taxes.
               Current income tax provisions approximate taxes to be paid or
               refunded for the applicable year.  Deferred income tax assets and
               liabilities are determined using the balance sheet method.  Under
               this method, the net deferred tax asset or liability is
               determined based on the tax effects of the differences between
               the book and tax bases of the various balance sheet assets and
               liabilities and gives current recognition to changes in tax rates
               and laws.

               Recognition of deferred tax balance sheet amounts is based on
               management's belief that it is more likely than not that the tax
               benefit associated with certain temporary differences will be
               realized.  A valuation allowance would be recorded for those
               deferred tax items for which it is more likely than not that
               realization would not occur.

               The Company files a consolidated income tax return.  Each entity
               provides for income taxes based on its contribution to income
               taxes (benefits) of the consolidated group.

          Earnings Per Common Share

               Basic earnings per common share are computed by dividing net
               income by the weighted average number of shares of common stock
               outstanding.  Diluted earnings per common share are computed by
               dividing net income minus the income effect of potential common
               shares that are dilutive by the sum of the weighted average
               number of shares of common stock outstanding and potential common
               shares.

                                     -52-
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          Comprehensive Income (Loss)

               Statement of Financial Accounting Standards ("SFAS") No. 130
               describes comprehensive income as the total of all components of
               comprehensive income, including net income.  Other comprehensive
               income refers to revenues, expenses, gains and losses that under
               generally accepted accounting principles are included in
               comprehensive income but excluded from net income.  Currently,
               the Company's other comprehensive income consists of unrealized
               gains and losses on available for sale securities.

          Recent Accounting Pronouncements

               In June 1998, the Financial Accounting Standards Board issued
               SFAS No. 133, "Accounting for Derivative Instruments and Hedging
               Activities".  The effective date of this statement has been
               deferred by SFAS No. 137 until fiscal years beginning after June
               15, 2000.  However, the statement permits early adoption as of
               the beginning of any fiscal quarter after its issuance.  The
               Company expects to adopt this statement effective January 1,
               2001.  SFAS No. 133 requires the Company to recognize all
               derivatives as either assets or liabilities in the balance sheet
               at fair value.  For derivatives that are not designated as
               hedges, the gain or loss must be recognized in earnings in the
               period of change.  For derivatives that are designated as hedges,
               changes in the fair value of the hedged assets, liabilities, or
               firm commitments must be recognized in earnings or recognized in
               other comprehensive income until the hedged item is recognized in
               earnings, depending on the nature of the hedge.  The ineffective
               portion of a derivative's change in fair value must be recognized
               in earnings immediately.  Management has not yet determined what
               effect the adoption of SFAS No. 133 will have on the Company's
               earnings or financial position.

               There are no other recent accounting pronouncements that have
               had, or are expected to have, a material effect on the Company's
               financial statements.

                                     -53-
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 2.   DISCONTINUED OPERATIONS

               During 1998, the Company discontinued the operations of its
               consumer finance subsidiary, First Credit Service Corporation
               ("FCC") and disposed of its assets, realizing cash proceeds of
               $9,571,022.  The sales resulted in a pretax gain of $541,686,
               which, net of income taxes of $184,173, produced a gain on the
               disposal of the business segment of $357,513.

               The gain on disposal of the assets of FCC and the operations of
               the discontinued business segment have been accounted for as
               discontinued operations.  Revenues for the consumer finance
               segment for the year ended December 31, 1998 were approximately
               $1,531,500.  There were no operations of the discontinued
               business segment for the year ended December 31, 1999.

NOTE 3.   SECURITIES

          The amortized cost and fair value of securities are summarized as
          follows:

<TABLE>
<CAPTION>
                                                                             Gross            Gross
                                                       Amortized          Unrealized        Unrealized            Fair
                                                          Cost               Gains            Losses              Value
                                                     --------------      ------------      ------------       --------------
               <S>                                   <C>                 <C>               <C>                <C>
               Securities Available for Sale
                 December 31, 1999:
                   U. S. Government and agency
                    securities                       $   16,645,505      $      2,963      $   (534,368)      $   16,114,100
                 Mortgage-backed securities               2,799,966                 -           (35,667)           2,764,299
                                                     --------------      ------------      ------------       --------------
                                                     $   19,445,471      $      2,963      $   (570,035)      $   18,878,399
                                                     ==============      ============      ============       ==============

                 December 31, 1998:
                   U. S. Government and agency
                    securities                       $   21,150,936      $    243,404      $       (659)      $   21,393,681
                   Mortgage-backed securities             1,094,874             2,640              (547)           1,096,967
                   Equity securities                        552,500                 -                 -              552,500
                                                     --------------      ------------      ------------       --------------
                                                     $   22,798,310      $    246,044      $     (1,206)      $   23,043,148
                                                     ==============      ============      ============       ==============
</TABLE>

                                     -54-
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 3.   SECURITIES (Continued)

          Securities with a carrying value of $3,034,765 and $2,662,765 at
          December 31, 1999 and 1998, respectively, were pledged to secure
          public deposits and for other purposes.

          The amortized cost and fair value of debt securities as of December
          31, 1999 by contractual maturity are shown below.  Maturities may
          differ from contractual maturities in mortgage-backed securities
          because the mortgages underlying the securities may be called or
          prepaid with or without penalty.  Therefore, these securities are not
          included in the maturity categories in the following maturity summary.

<TABLE>
<CAPTION>
                                                                                   Amortized             Fair
                                                                                     Cost                Value
                                                                                --------------      --------------
               <S>                                                              <C>                 <C>
               Due in one year or less                                          $            -      $            -
               Due from one year to five years                                       9,148,504           8,966,445
               Due from five to ten years                                            7,497,001           7,147,655
               Mortgage-backed securities                                            2,799,966           2,764,299
                                                                                --------------      --------------
                                                                                $   19,445,471      $   18,878,399
                                                                                ==============      ==============
</TABLE>

          Gains and losses on sales of securities available for sale consist of
          the following:

<TABLE>
<CAPTION>
                                                                                      Years Ended December 31,
                                                                                ----------------------------------
                                                                                     1999                1998
                                                                                --------------      --------------
               <S>                                                              <C>                 <C>
               Gross gains on sales of securities                               $        8,257      $            -
               Gross losses on sales of securities                                           -                   -
                                                                                --------------      --------------
               Net realized gain on sales of securities available for sale      $        8,257      $            -
                                                                                ==============      ==============
</TABLE>

                                     -55-
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 4.   LOANS AND ALLOWANCE FOR LOAN LOSSES

          The composition of loans is summarized as follows:

<TABLE>
<CAPTION>
                                                                                  December 31,
                                                                      -------------------------------------
                                                                            1999                  1998
                                                                      ---------------       ---------------
               <S>                                                    <C>                   <C>
               Commercial and financial                               $    15,197,054       $    19,250,668
               Real estate - construction                                   7,472,027             6,770,235
               Real estate - mortgage                                      70,302,250            58,502,031
               Consumer installment                                         5,166,018             6,150,213
               Other                                                          109,000               101,004
                                                                      ---------------       ---------------
                                                                           98,246,349            90,774,151
               Allowance for loan losses                                   (2,559,153)           (1,825,319)
                                                                      ---------------       ---------------
               Loans, net                                             $    95,687,196       $    88,948,832
                                                                      ===============       ===============
</TABLE>

          Changes in the allowance for loan losses are as follows:

<TABLE>
<CAPTION>
                                                                             Years Ended December 31,
                                                                      -------------------------------------
                                                                            1999                  1998
                                                                      ---------------       ---------------
               <S>                                                    <C>                   <C>
               Balance, beginning of year                             $     1,825,319       $     1,512,953
                 Provision for loan losses                                  1,470,000               886,000
                 Loans charged off                                           (803,942)             (412,553)
                 Recoveries of loans previously charged off                    67,776               151,658
                 Discontinued operations                                            -              (312,739)
                                                                      ---------------       ---------------
               Balance, end of year                                   $     2,559,153       $     1,825,319
                                                                      ===============       ===============
</TABLE>

          The Bank had no loans which it considered to be impaired other than
          the loans on which the accrual of interest had been discontinued.  The
          total recorded investment in impaired loans was $1,808,864 and
          $1,309,642 at December 31, 1999 and 1998, respectively.  These loans
          had related allowances for loan losses of approximately $661,000 and
          $550,400 at December 31, 1999 and 1998, respectively.  The average
          recorded investment in impaired loans for 1999 and 1998 was
          approximately $1,507,000 and $1,085,500, respectively.  There was no
          significant amount of interest income recognized on impaired loans in
          1999 or 1998.

                                     -56-
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


================================================================================



NOTE 4.   LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

          The Bank has granted loans to certain related parties, including
          directors, executive officers, and their related entities. The
          interest rates on these loans were substantially the same as rates
          prevailing at the time of the transaction and repayment terms are
          customary for the type of loan involved. Changes in related party
          loans for the years ended December 31, 1999 and 1998 are as follows:


                                                      1999            1998
                                                 -------------    ------------

                 Balance, beginning of year      $   1,736,075    $  2,265,229
                   Advances                            665,881       1,512,967
                   Repayments                         (187,612)     (2,042,121)
                                                 -------------    ------------
                 Balance, end of year            $   2,214,344    $  1,736,075
                                                 =============    ============


NOTE 5.   PREMISES AND EQUIPMENT

          Premises and equipment are summarized as follows:

<TABLE>
<CAPTION>
                                                                      December 31,
                                                               -----------------------------
                                                                   1999             1998
                                                               -------------     -----------
                 <S>                                           <C>               <C>
                 Land                                          $     514,235     $   514,235
                 Buildings and improvements                        2,077,578       2,077,578
                 Furniture and equipment                           1,404,614       1,481,297
                 Construction in progress (estimated cost
                   to complete $1,500,000)                           661,409               -
                                                               -------------     -----------
                                                                   4,657,836       4,073,110
                 Accumulated depreciation                          1,249,599       1,057,118
                                                               -------------     -----------
                                                                $  3,408,237     $ 3,015,992
                                                               =============     ===========
</TABLE>

                                     -57-

<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



================================================================================



NOTE 6.   DEPOSITS

          At December 31, 1999, scheduled maturities of time deposits are as
          follows:

              For the year ended December 31,
              -------------------------------

                   2000                                         $ 60,692,338
                   2001                                            9,949,201
                   2002                                              826,457
                   2003                                              441,321
                   2004                                              104,724
                   Due after five years                              369,084
                                                                ------------
                                                                $ 72,383,125
                                                                ============

          Brokered deposits of $3,800,995 and $3,891,140 are included in time
          deposits at December 31, 1999 and 1998, respectively.


NOTE 7.   FEDERAL HOME LOAN BANK BORROWINGS

          During 1999 and 1998, the Bank obtained funding for mortgage loans
          from the Federal Home Loan Bank of Atlanta ("FHLB"). At December 31,
          1999 and 1998, the advances had a weighted average interest rate of
          5.81% and 5.87%, respectively. The Bank's advances from the FHLB are
          collateralized by a blanket floating lien on qualifying first mortgage
          loans and pledging of the Bank's stock in the FHLB. A summary of the
          Bank's borrowings from the FHLB for the years ended December 31, 1999
          and 1998 follows:

                                                      1999         1998
                                                  -----------   ------------

              Balance, beginning of year          $ 6,500,500   $  3,879,171
                Advances                            1,000,000      3,500,000
                Repayments                         (1,611,671)      (878,671)
                                                  -----------   ------------
              Balance, end of year                $ 5,888,829   $  6,500,500
                                                  ===========   ============


                                     -58-

<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


================================================================================



NOTE 7.   FEDERAL HOME LOAN BANK BORROWINGS (Continued)

          At December 31, 1999, scheduled maturities of FHLB borrowings are as
          follows:


            For the year ending December 31,
            -------------------------------
                  2000                                    $   603,671
                  2001                                        487,671
                  2002                                        145,687
                  2003                                         86,700
                  2004                                      2,021,700
                  Due after five years                      2,543,400
                                                          -----------
                                                          $ 5,888,829
                                                          ===========

NOTE 8.   EMPLOYEE BENEFIT PLAN

          The Company provides a 401(k) plan for qualified employees to defer up
          to 10% of their salary with matching contributions from the Company
          made at the discretion of the Board of Directors. Contributions and
          administrative expenses charged to expense during 1999 and 1998
          amounted to $31,560 and $35,614, respectively.


NOTE 9.   INCOME TAXES

          The provision for income taxes from continuing operations consists of
          the following:

<TABLE>
<CAPTION>
                                          Years Ended December 31,
                                        -----------------------------
                                            1999               1998
                                        -----------       -----------
            <S>                         <C>               <C>
            Current                     $   315,546       $   623,287
            Deferred                       (159,224)         (171,747)
                                        -----------       -----------
                                        $   156,322       $   451,540
                                        ===========       ===========
</TABLE>

                                     -59-

<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



================================================================================


NOTE 9.   INCOME TAXES (Continued)

          The total provision for income taxes for the years ended December 31,
          1999 and 1998 was $156,322 and $572,809, respectively. Those amounts
          have been allocated to the following financial statement items:

<TABLE>
<CAPTION>
                                                     Years Ended December 31,
                                                   ---------------------------
                                                      1999            1998
                                                   ----------     ------------
           <S>                                     <C>            <C>
           Income from continuing operations       $  156,322     $    451,540
           Loss from discontinued operations                -          (62,904)
           Gain on disposal of business segment             -          184,173
                                                   ----------     ------------
                                                   $  156,322     $    572,809
                                                   ==========     ============
</TABLE>

          The Company's provision for income tax differs from the amounts
          computed by applying the Federal income tax statutory rates to income
          from continuing operations before income tax.  A reconciliation of the
          differences is as follows:

<TABLE>
<CAPTION>
                                                                           Years Ended December 31,
                                                        -------------------------------------------------------------
                                                                    1999                              1998
                                                        ----------------------------       --------------------------
                                                           Amount           Percent           Amount          Percent
                                                        -------------    -----------       -------------    ---------
          <S>                                           <C>              <C>               <C>              <C>
          Income tax at statutory rate                  $     146,690             34%      $     444,479           34%
          Miscellaneous permanent differences, net              9,632              2               7,061            1
                                                        -------------    -----------       -------------    ---------
          Provision for income taxes                    $     156,322             36%      $     451,540           35%
                                                        =============    ===========       =============    =========
</TABLE>

                                     -60-

<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 9.   INCOME TAXES (Continued)

          The components of deferred income taxes are as follows:

<TABLE>
<CAPTION>
                                                                       December 31,
                                                         --------------------------------------
                                                                1999                 1998
                                                         -----------------    -----------------
            <S>                                          <C>                  <C>
            Deferred tax assets:
              Allowance for loan losses                  $         738,733    $         546,160
              Restricted stock                                           -               30,424
              Non accrual loan interest receivable                  38,635               42,257
              Securities available for sale                        192,804                    -
                                                         -----------------    -----------------
                                                                   970,172              618,841
                                                         -----------------    -----------------

            Deferred tax liabilities:
              Premises and equipment                                87,523               88,220
              Securities available for sale                              -               83,428
                                                         -----------------    -----------------
                                                                    87,523              171,648
                                                         -----------------    -----------------

            Net deferred tax assets                      $         882,649    $         447,193
                                                         =================    =================
</TABLE>

NOTE 10.  EARNINGS PER COMMON SHARE

          The following is a reconciliation of net income (the numerator) and
          the weighted average shares outstanding (the denominator) used in
          determining basic and diluted earnings per share.

<TABLE>
<CAPTION>
                                                              Year Ended December 31, 1999
                                                ------------------------------------------------------
                                                      Income               Shares           Per Share
                                                   (Numerator)         (Denominator)         Amount
                                                ----------------    ------------------   -------------
            <S>                                 <C>                 <C>                  <C>
            Basic earnings per share
            Net income                              $    275,119             2,488,236      $     0.11
                                                                                            ==========

            Effect of Dilutive Securities
            Stock options                                      -                24,648
                                                    ------------           -----------

            Dilutive earnings per share
            Net income                              $    275,119             2,512,884      $     0.11
                                                    ============           ===========      ==========
</TABLE>

                                     -61-
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================


NOTE 10.  EARNINGS PER COMMON SHARE (Continued)

<TABLE>
<CAPTION>
                                                         Year Ended December 31, 1998
                                            ------------------------------------------------------
                                                Income               Shares            Per Share
                                              (Numerator)         (Denominator)          Amount
                                            ----------------    ------------------   -------------
          <S>                               <C>                 <C>                  <C>
           Basic earnings per share
            Net income                         $   1,085,161             2,404,176    $       0.45
                                                                                      ============

          Effect of Dilutive Securities
            Stock options                                  -                39,127
                                               -------------        --------------

          Dilutive earnings per share
            Net income                         $   1,085,161             2,443,303    $       0.44
                                               =============        ==============    ============
</TABLE>

NOTE 11.  COMMITMENTS AND CONTINGENT LIABILITIES

          In the normal course of business, the Bank has entered into off-
          balance-sheet financial instruments which are not reflected in the
          financial statements. These financial instruments include commitments
          to extend credit and standby letters of credit. Such financial
          instruments are included in the financial statements when funds are
          disbursed or the instruments become payable. These instruments
          involve, to varying degrees, elements of credit risk in excess of the
          amount recognized in the balance sheet.

          The Bank's exposure to credit loss in the event of nonperformance by
          the other party to the financial instrument for commitments to extend
          credit and standby letters of credit is represented by the contractual
          amount of those instruments. A summary of the Bank's commitments is as
          follows:

<TABLE>
<CAPTION>
                                                                         December 31,
                                                           ---------------------------------------
                                                                    1999                  1998
                                                           -----------------     -----------------
            <S>                                            <C>                   <C>
            Commitments to extend credit                     $    12,304,272       $    10,247,887
            Standby letters of credit                                705,405               824,975
                                                           -----------------     -----------------
                                                             $    13,009,677       $    11,072,862
                                                           =================     =================
</TABLE>

                                     -62-

<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 11.  COMMITMENTS AND CONTINGENT LIABILITIES (Continued)

          Commitments to extend credit generally have fixed expiration dates or
          other termination clauses and may require payment of a fee. Since many
          of the commitments are expected to expire without being drawn upon,
          the total commitment amounts do not necessarily represent future cash
          requirements. The credit risk involved in issuing these financial
          instruments is essentially the same as that involved in extending
          loans to customers. The Bank evaluates each customer's
          creditworthiness on a case-by-case basis. The amount of collateral
          obtained, if deemed necessary by the Bank upon extension of credit, is
          based on management's credit evaluation of the customer. Collateral
          held varies but may include real estate and improvements, marketable
          securities, accounts receivable, inventory, equipment, and personal
          property.

          Standby letters of credit are conditional commitments issued by the
          Bank to guarantee the performance of a customer to a third party.
          Those guarantees are primarily issued to support public and private
          borrowing arrangements. The credit risk involved in issuing letters of
          credit is essentially the same as that involved in extending loans to
          customers. Collateral held varies as specified above and is required
          in instances which the Bank deems necessary.

          In the normal course of business, the Company is involved in various
          legal proceedings. In the opinion of management of the Company, any
          liability resulting from such proceedings would not have a material
          effect on the Company's financial statements.

NOTE 12.  CONCENTRATIONS OF CREDIT

          The Company originates primarily commercial, residential, and consumer
          loans to customers in and around Glynn County, Georgia. The ability of
          the majority of the Company's customers to honor their contractual
          loan obligations is dependent on the economy in the Glynn County area.

          Approximately seventy-nine percent (79%) of the Company's loan
          portfolio is concentrated in real estate loans, of which 10% consists
          of construction loans. A substantial portion of these loans are
          secured by real estate in the Company's primary market area.
          Accordingly, the ultimate collectibility of the loan portfolio is
          susceptible to changes in market conditions in the Company's primary
          market area. The other significant concentrations of credit by type of
          loan are set forth in Note 4.

                                     -63-

<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 12.  CONCENTRATIONS OF CREDIT (Continued)

          The Bank, as a matter of policy, does not generally extend credit to
          any single borrower or group of related borrowers in excess of 25% of
          statutory capital, or approximately $1,975,000.

NOTE 13.  RESTRICTED STOCK, STOCK OPTIONS AND STOCK WARRANTS

          Restricted Stock

            In August 1994, the Company granted 9,260 shares of restricted stock
            to four key employees. Of the above shares, 8,100 were forfeited in
            1997, and the remaining 1,160 shares vested in August 1999. In July
            1995, the Company granted 62,570 shares of restricted stock to eight
            directors. In 1997, 22,558 of these shares were forfeited. In
            December 1998, the Company granted 4,000 shares of restricted stock
            to two directors. All of the remaining 44,012 shares will be fully
            vested by the end of the seventh year from the date of the grant.
            The cost of the restricted stock is being amortized on the straight-
            line method over the applicable vesting periods. The amortization
            expense on restricted stock was $37,164 and $32,466 for the years
            ended December 31, 1999 and 1998, respectively, and the same amounts
            were credited to capital surplus.

          Stock Options

            The Company has options outstanding under three stock option plans.
            The 1991 Incentive Stock Option Plan ("Plan A") and the 1991
            Nonstatutory Stock Option Plan ("Plan B") were discontinued in 1995
            and replaced by the 1995 Stock Option Plan (the "1995 Plan".)
            Options granted under the two prior plans at the date of replacement
            by the 1995 Plan remain outstanding and can be exercised during the
            terms of the option agreements unless such options are forfeited by
            the optionee. The option price for shares granted under Plan A were
            at least equal to the fair value of such shares on the date granted
            unless the optionee was a restricted shareholder, in which case the
            options price was at least equal to 110% of the fair value of the
            shares on the date granted. The option price for shares of common
            stock to be issued under Plan B was determined by the Board, but
            under no circumstances could the option price be less than the fair
            value of the shares on the date granted.

                                     -64-

<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 13.  RESTRICTED STOCK, STOCK OPTIONS AND STOCK WARRANTS (Continued)

               Options granted under the 1995 Plan are one of two types: (i)
               those which qualify for treatment as incentive stock options
               under Section 422 of the Internal Revenue Code of 1986, as
               amended ("Incentive Stock Options") or (ii) those which do not so
               qualify ("Nonqualified Options").  The 1995 Plan provides that
               not more than 250,000 shares in the aggregate be issued for
               Incentive Stock Options and Nonqualified Options.  The exercise
               price of an Incentive Stock Option shall not be less than the
               fair value at the date of grant.  The fair value shall be
               determined from the trading price on a national securities
               exchange, NASDAQ, or over-the-counter markets, if so traded.  If
               not so traded, the Board will determine the fair value based upon
               recent sales reported to the Company.  The exercise price of a
               Nonqualified Option shall be determined by the Board on the date
               granted.

               A summary of the status of the three plans at December 31, 1999
               and 1998, and changes during the years ended on those dates, is
               as follows:

<TABLE>
<CAPTION>
                                                                   1999                                   1998
                                                       --------------------------             ----------------------------
                                                                        Weighted-                                Weighted-
                                                                         Average                                  Average
                                                                        Exercise                                 Exercise
                                                        Number            Price                Number              Price
                                                       --------         ---------             --------           ---------
                <S>                                    <C>              <C>                   <C>                <C>
                Under option, beginning of the year     149,805         $    6.89              114,077           $    5.91
                  Granted                                79,258              8.43               52,490                9.00
                  Exercised                             (27,123)             6.41              (10,762)               7.79
                  Forfeited                             (13,165)             6.65               (6,000)                6.5
                                                       --------                               --------
                Under option, end of year               188,775              7.63              149,805                6.89
                                                       ========                               ========

                Exercisable at end of year              148,275                                140,805
                                                       ========                               ========

                Weighted-average fair value per
                  option of options granted
                  during year                          $   3.60                               $   4.09
                                                       ========                               ========
</TABLE>

                                     -65-
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 13.  RESTRICTED STOCK, STOCK OPTIONS AND STOCK WARRANTS (Continued)

          Additional information about options outstanding at December 31, 1999
          is as follows:

<TABLE>
<CAPTION>
                                          Options Outstanding                               Options Exercisable
                 -------------------------------------------------------------------      -----------------------
                                                      Weighted-            Weighted-                    Weighted-
                    Range of                           Average              Average                      Average
                    Exercise           Number        Contractual           Exercise         Number      Exercise
                     Prices          Outstanding    Life in Years            Price        Outstanding     Price
                 ---------------     -----------    -------------          ---------      -----------   ---------
                 <S>                 <C>            <C>                    <C>            <C>           <C>
                  $4.00 - $4.99          24,254               1.5          $    4.04          24,254    $    4.04
                  $6.00 - $6.99          63,049               7.6               6.55          40,049         6.38
                  $7.00 - $7.99          10,000               8.0               7.30          10,000         7.30
                  $8.00 - $8.99           4,966               9.8               8.36           4,966         8.36
                  $9.00 - $9.99          86,506               8.8               9.41          69,006         9.45
                                     -----------                                          -----------
                                        188,775               7.4               7.63         148,275         7.56
                                     ===========                                          ===========
</TABLE>

               As permitted under generally accepted accounting principles,
               grants under the plans are accounted for following the provisions
               of APB Opinion No. 25 and its related interpretations.
               Accordingly, no compensation cost has been recognized for grants
               made to date.  Had compensation cost been determined based on the
               fair value method prescribed in FASB Statement No. 123, reported
               net income and earnings per share would have been reduced as
               follows:

<TABLE>
<CAPTION>
                                                                               December 31,
                                                 -----------------------------------------------------------------------
                                                               1999                                    1998
                                                 ---------------------------------      --------------------------------
                                                                        Basic                                  Basic
                                                       Net            Net Income            Net              Net Income
                                                     Income            Per Share           Income            Per Share
                                                 --------------      -------------      -------------      -------------
                <S>                              <C>                 <C>                <C>                <C>
                As reported                      $      275,119      $        0.11      $   1,085,161      $        0.45
                Stock based compensation,
                  net of related tax effect            (111,392)             (0.04)          (127,997)             (0.05)
                                                 --------------      -------------      -------------      -------------
                As adjusted                      $      163,727      $        0.07      $     957,164      $        0.40
                                                 ==============      =============      =============      =============
</TABLE>

                                     -66-
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 13.  RESTRICTED STOCK, STOCK OPTIONS AND STOCK WARRANTS (Continued)

<TABLE>
<CAPTION>
                                                                              December 31,
                                                  ----------------------------------------------------------------------
                                                                  1999                                  1998
                                                  --------------------------------      --------------------------------
                                                                       Diluted                                Diluted
                                                       Net            Net Income             Net             Net Income
                                                      Income          Per Share            Income            Per Share
                                                  -------------      -------------      -------------      -------------
                <S>                               <C>                <C>                <C>                <C>
                As reported                       $     275,119      $        0.11      $   1,085,161      $        0.44
                Stock based compensation,
                  net of related tax effect            (111,392)             (0.04)          (127,997)             (0.05)
                                                  -------------      -------------      -------------      -------------
                As adjusted                       $     163,727      $        0.07      $     957,164      $        0.39
                                                  =============      =============      =============      =============
</TABLE>

          The fair value of the options granted in 1999 was based upon the
          discounted value of future cash flows of the options using the
          following assumptions:

                Risk-free interest rate                     6.28%
                Expected life of the options             10 years
                Expected dividend yield                     0.91%
                Expected volatility                        19.50%

          Warrants to Purchase Common Stock

               In 1994, the Company initiated a public secondary stock offering
               to sell 1,538,462 units at a price of $6.50 per unit.  Each unit
               consisted of one share of common stock and one Class A Warrant to
               purchase common stock.  Each of the Class A Warrants expired in
               three years and entitled the holder to purchase an additional
               share of common stock at a price of $7.25 in year one, $8.25 in
               year two and $9.50 in year three.  The public offering was closed
               in 1995 following the sale of 897,230 units.  After deducting
               related stock offering and issue expense, net proceeds of
               $5,456,457 were credited to paid-in capital.  During 1998,
               warrants to purchase 149,970 shares of common stock were
               exercised at a price of $9.50 per share.  All proceeds were
               credited to paid-in capital, net of related expenses.  On May 31,
               1998, the remaining warrants outstanding expired.

                                     -67-
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 14.  REGULATORY MATTERS

          The Bank is subject to certain restrictions on the amount of dividends
          that may be declared without prior regulatory approval.  At December
          31, 1999, approximately $213,000 of the Bank's retained earnings were
          available for dividend declaration without regulatory approval.

          The Company and the Bank are subject to various regulatory capital
          requirements administered by the federal banking agencies.  Failure to
          meet minimum capital requirements can initiate certain mandatory, and
          possibly additional discretionary, actions by regulators that, if
          undertaken, could have a direct material effect on the 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 assets,
          liabilities, and certain off-balance-sheet items as calculated under
          regulatory accounting practices.  The capital amounts and
          classification are also subject to qualitative judgments by the
          regulators about components, risk weightings, and other factors.
          Prompt corrective action provisions are not applicable to bank holding
          companies.

          Quantitative measures established by regulation to ensure capital
          adequacy require the Company and the Bank to maintain minimum amounts
          and ratios of total and Tier I capital to risk-weighted assets and of
          Tier I capital to average assets.  Management believes, as of December
          31, 1999, the Company and the Bank met all capital adequacy
          requirements to which it is subject.

          As of December 31, 1999, the most recent notification from the Federal
          Deposit Insurance Corporation categorized the Bank as well capitalized
          under the regulatory framework for prompt corrective action.  To be
          categorized as well capitalized, the Bank must maintain minimum total
          risk-based, Tier I risk-based, and Tier I leverage ratios as set forth
          in the following table.  There are no conditions or events since that
          notification that management believes have changed the Bank's
          category.

                                     -68-
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 14.  REGULATORY MATTERS (Continued)

          The Company and Bank's actual capital amounts and ratios are presented
          in the following table.

<TABLE>
<CAPTION>
                                                                                                        To Be Well
                                                                              For Capital            Capitalized Under
                                                                               Adequacy              Prompt Corrective
                                                       Actual                  Purposes              Action Provisions
                                              -----------------------   ----------------------   ------------------------
                                                  Amount        Ratio       Amount       Ratio      Amount          Ratio
                                              --------------    -----   -------------    -----   --------------     -----
     <S>                                      <C>               <C>     <C>              <C>     <C>                <C>
     As of December 31, 1999
      Total Capital to Risk Weighted Assets
        Consolidated                          $   14,767,500    15.9%   $   7,432,000    8.0%             - - - N/A - - -
        Bank                                  $   11,401,300    12.3%   $   7,416,600    8.0%    $    9,270,800      10.0%
      Tier I Capital to Risk Weighted Assets
        Consolidated                          $   13,589,000    14.6%   $   3,716,000    4.0%             - - - N/A - - -
        Bank                                  $   10,225,200    11.0%   $   3,708,300    4.0%    $    5,562,500       6.0%
      Tier I Capital to Average Assets
        Consolidated                          $   13,589,000    10.8%   $   5,020,200    4.0%             - - - N/A - - -
        Bank                                  $   10,225,200     8.2%   $   5,016,300    4.0%    $    6,270,400       5.0%

     As of December 31, 1998
      Total Capital to Risk Weighted Assets
        Consolidated                          $   14,363,600    17.1%   $   6,717,300    8.0%             - - - N/A - - -
        Bank                                  $   10,857,300    12.9%   $   6,709,700    8.0%    $    8,387,100      10.0%
      Tier I Capital to Risk Weighted Assets
        Consolidated                          $   13,304,500    15.9%   $   3,358,600    4.0%             - - - N/A - - -
        Bank                                  $    9,799,400    11.7%   $   3,354,800    4.0%    $    5,032,300       6.0%
      Tier I Capital to Average Assets
        Consolidated                          $   13,304,500    11.0%   $   4,842,100    4.0%             - - - N/A - - -
        Bank                                  $    9,799,400     8.6%   $   4,580,800    4.0%    $    5,726,000       5.0%
</TABLE>

                                     -69-
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 15.  FAIR VALUE OF FINANCIAL INSTRUMENTS

          The following methods and assumptions were used by the Company in
          estimating its fair value disclosures for financial instruments.  In
          cases where quoted market prices are not available, fair values are
          based on estimates using discounted cash flow methods.  Those methods
          are significantly affected by the assumptions used, including the
          discount rates 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.  The use of different
          methodologies may have a material effect on the estimated fair value
          amounts.  Also, the fair value estimates presented herein are based on
          pertinent information available to management as of December 31, 1999
          and 1998.  Such amounts have not been revalued for purposes of these
          financial statements since those dates and, therefore, current
          estimates of fair value may differ significantly from the amounts
          presented herein.

          Cash and Due From Banks, Interest-Bearing Deposits in Banks, and
          Federal Funds Sold

               The carrying amounts of cash and due from banks, interest-bearing
               deposits in banks, and Federal funds sold approximate their fair
               value.

          Securities

               Fair values for securities available for sale are based on
               available quoted market prices.  The carrying values of other
               investments with no readily determinable fair value approximate
               fair values.

          Loans

               For variable-rate loans that reprice frequently and have no
               significant change in credit risk, fair values are based on
               carrying values. For other loans, the fair values are estimated
               using discounted cash flow models, using current market interest
               rates offered for loans with similar terms to borrowers of
               similar credit quality. Fair values for impaired loans are
               estimated using discounted cash flow models or based on the fair
               value of the underlying collateral.

                                     -70-
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 15.  FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

          Deposits

               The carrying amounts of demand deposits and savings deposits
               approximate their fair values.  Fair values for certificates of
               deposit are estimated using discounted cash flow models, using
               current market interest rates offered on certificates with
               similar remaining maturities.

          Federal Home Loan Bank Borrowings

               The fair values of the Company's borrowings from the FHLB are
               estimated using discounted cash flow models, using current market
               interest rates offered on similar types of borrowing
               arrangements.

          Off-Balance Sheet Instruments

               Fair values of the Company's off-balance sheet financial
               instruments are based on fees charged to enter into similar
               agreements.  However, commitments to extend credit and standby
               letters of credit do not represent a significant value to the
               Company until such commitments are funded.  The Company has
               determined that these instruments do not have a distinguishable
               fair value and no fair value has been assigned.

          The estimated fair values and related carrying values of the Company's
          financial instruments were as follows:

<TABLE>
<CAPTION>
                                                    December 31, 1999                      December 31, 1998
                                          -----------------------------------     ----------------------------------
                                             Carrying              Fair               Carrying            Fair
                                              Amount              Value                Amount            Value
                                          --------------     ----------------     ---------------    ---------------
       <S>                                <C>                <C>                  <C>                <C>
       Financial assets:
         Cash and due from banks,
          interest-bearing deposits in
          banks, and Federal funds sold   $   10,976,400     $     10,976,400     $     5,681,141    $     5,681,141
         Securities                           19,244,799           19,244,799          23,043,148         23,043,148
         Loans                                95,687,196           94,784,000          88,948,832         89,357,000

       Financial liabilities:
         Deposits                            112,742,906          111,556,000         101,271,921        101,831,000
         FHLB borrowings                       5,888,829            5,572,000           6,500,500          6,581,000
</TABLE>

                                     -71-
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 16.  PARENT COMPANY FINANCIAL INFORMATION

          The following information presents the condensed balance sheets,
          statements of income and cash flows for Golden Isles Financial
          Holdings, Inc. as of and for the years ended December 31, 1999 and
          1998:

                           CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                1999                  1998
                                                                          ---------------       ---------------
               <S>                                                        <C>                   <C>
                                      Assets
                                      ------
               Cash                                                       $     3,269,789       $     3,724,804
               Investment in subsidiary                                         9,850,933             9,960,771
               Premises and equipment, net                                          3,922                15,390
               Other assets                                                       104,202                67,512
                                                                          ---------------       ---------------

                  Total assets                                            $    13,228,846       $    13,768,477
                                                                          ===============       ===============

                       Liabilities and Stockholders' Equity
                       ------------------------------------
               Liabilities, other                                         $        14,154       $       305,601
                                                                          ---------------       ---------------

               Stockholders' equity                                            13,214,692            13,462,876
                                                                          ---------------       ---------------

                  Total liabilities and stockholders' equity              $    13,228,846       $    13,768,477
                                                                          ===============       ===============
</TABLE>

                                     -72-
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 16.  PARENT COMPANY FINANCIAL INFORMATION (Continued)

                        CONDENSED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                               1999                  1998
                                                                         ---------------       ---------------
               <S>                                                       <C>                   <C>
               Income
                 Interest                                                $        66,866       $       129,839
                 Other                                                            20,645                   681
                                                                         ---------------       ---------------
                   Total income                                                   87,511               130,520
                                                                         ---------------       ---------------

               Expense
                 Interest                                                              -               139,614
                 General and administrative                                      311,597               317,803
                                                                         ---------------       ---------------
                   Total expense                                                 311,597               457,417
                                                                         ---------------       ---------------

                   Loss before income tax benefits and
                    equity in undistributed income of subsidiaries              (224,086)             (326,897)
               Income tax benefits                                               (73,365)             (105,322)
                                                                         ---------------       ---------------

                   Loss before equity in undistributed income
                    of subsidiaries                                             (150,721)             (221,575)

               Equity in undistributed income of subsidiaries                    425,840             1,306,736
                                                                         ---------------       ---------------

                   Net income                                            $       275,119       $     1,085,161
                                                                         ===============       ===============
</TABLE>

                                      -73-
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE 16.  PARENT COMPANY FINANCIAL INFORMATION (Continued)

                      CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                              1999                  1998
                                                                        ---------------       ---------------
           <S>                                                          <C>                   <C>
           OPERATING ACTIVITIES
             Net income                                                 $       275,119       $     1,085,161
             Adjustments to reconcile net income to net
                cash used in operating activities:
                Depreciation                                                      6,752                11,886
                Undistributed income of subsidiaries                           (425,840)           (1,306,736)
                Net loss on disposal of premises and equipment                    4,716                24,327
                Change in other prepaids, receivables, deferrals and
                  accruals, net                                                (328,137)              (68,488)
                                                                        ---------------       ---------------

                 Net cash used in operating activities                         (467,390)             (253,850)
                                                                        ---------------       ---------------

           INVESTING ACTIVITIES
             Net decrease in due from subsidiaries                                    -             1,550,000
             Capital contributions to subsidiary bank                                 -              (500,000)
             Return of capital of liquidated subsidiaries                             -             3,330,780
             Purchase of premises and equipment                                       -                  (447)
                                                                        ---------------       ---------------
                 Net cash provided by investing activities                            -             4,380,333
                                                                        ---------------       ---------------

           FINANCING ACTIVITIES
             Net decrease in notes payable                                            -            (2,500,000)
             Dividends paid                                                    (198,677)                    -
             Vesting of restricted stock                                         37,164                32,466
             Proceeds from exercise of stock warrants                                 -             1,414,878
             Proceeds from exercise of stock options                            173,888                76,078
                                                                        ---------------       ---------------

                 Net cash provided by (used in) financing activities             12,375              (976,578)
                                                                        ---------------       ---------------

           Net increase (decrease) in cash                                     (455,015)            3,149,905

           Cash at beginning of year                                          3,724,804               574,899
                                                                        ---------------       ---------------

           Cash at end of year                                          $     3,269,789       $     3,724,804
                                                                        ===============       ===============
</TABLE>

                                     -74-
<PAGE>

ITEM 8.   Changes in and Disagreements with Accountants on Accounting and
          Financial Disclosure.

For the four-year period ended December 31, 1999, there has been no disagreement
between GIFH and its accountants, Mauldin & Jenkins, on any matter of accounting
principal, practice or financial statement disclosure. Mauldin & Jenkins served
as GIFH's accountants since 1996.

PART III

ITEM 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16(a) of the Exchange Act.

The Directors and executive officers of GIFH are as follows:

<TABLE>
<CAPTION>
                                                                        Director
     Name (Age)                      Position With Company               Since
     ----------                      ---------------------              --------
<S>                            <C>                                      <C>
L. McRee Harden (44)           Director                                   1988
Michael D. Hodges (46)         Director, President and CEO of Bank;       1991
Russell C. Jacobs, Jr. (64)    Director                                   1988
James M. Fiveash (69)          Director                                   1997
Claude Kermit Keenum (64)      Director                                   1988
Charles Ray Acosta (59)        Director                                   1997
Jimmy D. Veal (51)             Vice Chairman and Secretary/Treasurer      1987
J. Thomas Whelchel (65)        Chairman and CEO                           1988
Charles K. Werk (49)           Director                                   1999
</TABLE>

Members of the Board of Directors serve for a period of one year, or until their
death, resignation, removal or replacement under GIFH's governing instruments by
a duly elected and qualified candidate.

A brief account of the business experience of each of the directors and
executive officers during the past five years is set out below.

L. McRee Harden. Mr. Harden has been a director of the Company since July 1988,
a director of the Bank since February 1990, and a director of FCC since July
1993. Mr. Harden is the Secretary and Treasurer of Friendly Express, Inc., a
company which operates a chain of approximately 28 convenience stores in south
Georgia and Florida.

Michael D. Hodges. Mr. Hodges has been a director of the Company since 1991 and
a director of the Bank since June 1990. On February 20, 1997, Mr. Hodges became
President and CEO of the Bank. He also has been Acting President and CEO of the
Bank since October 1996. Prior to that, he had been Senior Vice President of the
Bank since June 1990, with principal responsibilities for the Bank's loan
portfolio.

                                      -75-
<PAGE>

Russell C. Jacobs, Jr. Mr. Jacobs has been a director of the Company since July
1988, a director of the Bank since February 1990, and a director of FBMC since
July 1993. He also has been a Vice Chairman of the Bank since July 1995. Mr.
Jacobs is self-employed as an agent for the Equitable Financial Companies, and
as a registered representative with Equico Securities, Inc. Mr. Jacobs holds
both the Chartered Life Underwriter ("CLU") and Chartered Financial Consultant
("CHFC") designations.

James M. Fiveash. Mr. Fiveash initially served as a director of the Company from
1989 until his resignation in 1994, and was elected as a director of the Company
at the 1997 Annual Meeting of Shareholders and also serves as a director of FCC.
Mr. Fiveash is retired, and serves as part-time president of The Fiveash
Company, which is in the business of renting trucking terminals.

Claude Kermit Keenum. Mr. Keenum has been a director of the Company since July
1988, a director of the Bank since February 1990, and a director of FCC since
July 1995. He was the Superintendent of the Glynn County School System from 1980
to 1989 and the Superintendent of the Cobb County School System in metropolitan
Atlanta from 1989 to 1992. Mr. Keenum was most recently President of
Southeastern Communication Systems, Inc. and Keenum's Educational Services,
Inc., and is now retired.

Charles R. Acosta. Mr. Acosta has been employed by Georgia Power Company since
1964. He has been Region Manager for the Coastal Region, a 10-county service
area, since 1993. Prior to that, he was District Manager for the Brunswick
District from 1977 to 1993. Mr. Acosta is Past President and Campaign Chairman
of the United Way of Brunswick and Glynn County, and past Chairman of the
Brunswick and Glynn County Development Authority. Mr. Acosta was one of the
original directors of the Company and served as a director of the Company from
1987 to 1994. He also served as a director of the Bank from 1990 to 1994. Mr.
Acosta was reelected as a director of the Company at the 1997 Annual Meeting of
Shareholders.

Jimmy D. Veal. Mr. Veal has been a Vice Chairman of the Company since July 1995.
He has been a director of the Company since June 1987 and Secretary/Treasurer of
the Company since September 1992. He has been a Vice Chairman of the Bank since
July 1995, a director of the Bank since July 1990, and Secretary/Treasurer and a
director of both FCC and FBMC since July 1993. He is Secretary/Treasurer and a
director of Motel Properties, Inc., a corporation that owns and operates four
motels in Glynn County and two in Camden County.

J. Thomas Whelchel. Mr. Whelchel has been the Chairman and CEO of the Company
since October 17, 1996. Prior to that, Mr. Whelchel was a Vice Chairman of the
Company between July 1995 and October 1996. From July 1988 through July 1995, he
served as President of the Company. Mr. Whelchel has been a director of the
Company since July 1988, and Chairman and a director of the Bank since February
1990. Mr. Whelchel has also been a director of both FCC and FBMC since July
1993. He is a senior partner in the Brunswick law firm of Whelchel, Brown,
Readdick and Bumgartner.

                                      -76-
<PAGE>

Charles K. Werk. Mr. Werk is the CEO of Coastal Sleeve Label, Inc., located in
Brunswick, Georgia. Additionally, Mr. Werk is the owner of Trans Link Motor
Express, Inc., a transportation and distribution company located in Albany,
Georgia, and has owned and operated various operating companies in the printing,
warehousing and food manufacturing industries. Prior to his experience with
operating companies, Mr. Werk spent fifteen years in the Investment Banking and
Commercial Banking Industry with various institutions including SunTrust Bank,
Manufacturers Hanover, Melon Bank, and First Chicago.

None of the directors hold directorships in any reporting company other than
Golden Isle Financial Holdings, Inc. There are no family relationships among
directors, executive officers, or persons nominated or chosen by the Company to
become directors or executive officers of the Company.

During the previous five years, no director or executive officer was the subject
of a legal proceeding (as defined below) that is material to an evaluation of
the ability or integrity of any director or executive officer. A "legal
proceeding" includes: (a) any bankruptcy petition filed by or against any
business of which such person was a general partner or executive prior to that
time; (b) any conviction in a criminal proceeding or subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses); (c)
any order, judgment, or decree of any court of competent jurisdiction, or any
Federal or State authority permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of commodities
business, securities or banking activities; and (d) any finding by a court of
competent jurisdiction (in a civil action), the Securities and Exchange
Commission or the Commodity Futures Trading Commission of a violation of a
federal or state securities or commodities law (such finding having not been
reversed, suspended or vacated).

Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the Company under Rule 16a-3(d) during 1999 and Form 5 and amendments thereto
furnished to the Company during 1999, no person who, at any time during 1999,
was a director, officer or beneficial owner of more than 10% of any class of
equity securities of the Company failed to file on a timely basis any reports
required by Section 16(a) during the 1999 fiscal year or previously, except
Director Whelchel was late in filing on Form 5.

                                      -77-
<PAGE>

ITEM 10.  EXECUTIVE COMPENSATION.

     The following table is a summary of compensation paid during the past three
years to the individual serving as the Company's CEO during 1999 and any other
executive officer who during 1999 earned in excess of $100,000 in annual salary
and bonus.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                    SECURITIES
                                                 OTHER ANNUAL  RESTRICTED/1/2/3/    UNDERLYING       LTIP     ALL OTHER
NAME AND POSITION     YEAR   SALARY     BONUS    COMPENSATION    STOCK AWARDS     OPTIONS/SARS(#)  PAYOUTS   COMPENSATION
-------------------------------------------------------------------------------------------------------------------------
<S>                   <C>   <C>        <C>       <C>           <C>                <C>              <C>       <C>
J. THOMAS WHELCHEL    1999                    --           --                 --            7,825/4/      --   6,000/7/
CEO
                      1998        --          --           --                 --           14,006/4/      --   1,500/7/

                      1997    91,872/5/       --           --                 --               --         --      --

MICHAEL D. HODGES     1999   130,000          --           --                 --            1,668/4/      --    3,300/6/
PRESIDENT
FIRST BANK OF         1998   130,000          --           --                 --           10,368/4/      --    2,995/6/
BRUNSWICK
                      1997   120,919          --           --                 --               --         --      --
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

     /1/ In the event that the Company declares a dividend on its outstanding
shares of Common Stock, then such dividend will be equally applicable to the
restricted stock reported in this column.

     /2/ The aggregate number of shares of restricted stock held by J. Thomas
Whelchel as of December 31, 1999, is 10,325 shares and the value of such shares
is $39,825 based on the terms of the following vesting schedule. Under the terms
of the award of these restricted shares to Mr. Whelchel in 1995 ("1995
Restricted Stock") one-seventh of such shares (1,475) became vested on July 25,
1996; another one-seventh became vested on July 25, 1997; and an additional one-
seventh of such shares will vest on July 25 of each year thereafter until all
such shares have vested. If at any time Mr. Whelchel becomes neither a director
nor an executive officer of the Company or any subsidiary of the Company, then
he shall forfeit any shares of 1995 Restricted Stock which has not already
vested at the time of the event which triggers such forfeiture.

     /3/ The aggregate number of shares of restricted stock held by Michael D.
Hodges as of December 31, 1999, is 2,390 shares and the value of such shares is
$11,462, based on the following schedule. Of the shares of restricted stock, 775
were awarded to Mr. Hodges in 1994 ("1994 Restricted Stock"), all of which vest
upon the earlier of (i) five years from August 17, 1994, the date the shares
were granted to Mr. Hodges or (ii) a change in control in the ownership of the
Company through the acquisition of more than 50% of the Company's outstanding
stock by a third party. Mr. Hodges will forfeit the 1994 Restricted Stock if he
is not employed by either the Company or one of its subsidiaries on August 16,
1999, unless Mr. Hodges' employment is termination because

                                      -78-
<PAGE>

of the sale of the Company or a subsidiary through which Mr. Hodges is employed
and Mr. Hodges is not offered other employment within the Company of one of its
subsidiaries. Under the terms of the award of 1,615 shares of restricted stock
awarded to Mr. Hodges in 1995 ("1995 Restricted Stock"), one-seventh of such
shares (230 shares) became vested on July 25, 1996; another one-seventh became
vested on July 25, 1997; and an additional one-seventh of such shares will vest
on July 25 of each year thereafter until all such shares have vested. If at any
time Mr. Hodges becomes neither a director nor an executive officer of the
Company or any subsidiary of the Company, then he shall forfeit any shares of
1995 Restricted Stock which has not already vested at the time of the event
which triggers such forfeiture.

     /4/ These options are incentive stock options which have been granted
pursuant to that certain Golden Isles Financial Holdings, Inc. 1995 Stock Option
Plan adopted by the Company on July 25, 1995 (the "1995 Plan"). The 1995 Plan
provides for the granting of certain options that are intended to qualify as
incentive stock options within the meaning of Section 422(b) of the Internal
Revenue Code, as well as certain nonstatutory stock options that are not
intended to qualify as incentive stock options within the meaning of Section
422(b) of the Internal Revenue Code. These options may be exercised at any time
before the earlier of (i) within ten (10) years from the date of the grant of
the option or (ii) the date upon which the optionee ceases to be an employee of
the Company; provided, however, that if the Optionee's employment with the
Company is terminated for any reason other than (a) optionee's death or
disability, (b) optionee's voluntary termination of his employment with the
Company's consent, or (c) termination of optionee's employment by the Company
for cause, then, in such event, optionee may exercise these incentive stock
options for up to three months after termination of his employment (but in no
even later than ten (10) years from the date of the grant of the option).

     /5/ Mr. Whelchel served as acting CEO of the Company without a written
agreement, and the compensation committee of the Board agreed to compensate Mr.
Whelchel for his time spent as CEO of the Company. The amount stated as his
salary for 1997 is the amount settled upon by the compensation committee.

     /6/ These amounts represent the Company's contribution to the Company
401(k) plan for Mr. Hodges in 1998 and 1999.

     /7/ These amounts represent Director's fees paid to Mr. Wheldel in 1998 and
1999.
                                      -79-
<PAGE>

              AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                         AND FY-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
Name                  Shares acquired on   Value Realized    Number of securities underlying       Value of Unexercised
                      exercise (#)         (#)               Unexercised Options/SARS at FY-End    in-the-money options
                                                             (Exercisable/Unexercisable)           SARs at FY-End
                                                                                                   (Exercisable/Unexercisable)
<S>                   <C>                  <C>              <C>                                    <C>
J. Thomas Whelchel                    --               --                          23,221/0/2/                 $     0/0/1/

Michael D. Hodges                     --               --                          42,160/0/3/                 $38,904/0/1/
</TABLE>

     No stock options were exercised by the listed individuals and there were no
outstanding SARs during fiscal year 1999.

     The Company does not have any Long Term Incentive Plans in effect.

     /1/ Dollar values have been calculated by determining the difference
between the estimated fair market value of the Company's common stock at March
3, 2000 ($6.00) and the exercise prices of the options.

     /2/ On January 18, 1996, options on 1,390 at $6.00 per share were awarded
to Mr. Whelchel as compensation with respect to his services as a director. In
1998 he was granted options on 3,836 shares at $9.36 per share, 2,500 shares at
$9.54 per share, 2,500 shares at $9.71 per share, 2,500 shares at $9.17 per
share and 2,670 shares at $9.64 per share. The 7,825 options granted in 1999 are
listed in the table on the following page.

     /3/ Michael D. Hodges has the right to acquire 42,160 shares of the
Company's common stock pursuant to stock options issued by the Company to Mr.
Hodges. Of the 42,160 stock options, 18,750 are exercisable at the price of
$4.00 per share, 1,003 are exercisable at the price of $4.60 per share, 1,408
are exercisable at the price of $6.25 per share, 6,921 are exercisable at the
purchase price of $6.50 per share, 2,042 are exercisable at the price of $6.00
per share, 5,000 shares are exercisable at $7.60 per share, 3,165 shares are
exercisable at $9.36 per share and 2,203 shares are exercisable at $9.64 per
share. The 1,668 options granted in 1999 are listed in the table on the
following page.

                                      -80-
<PAGE>

                     OPTION/SAR GRANTS IN LAST FISCAL YEAR
                              (Individual Grants)

<TABLE>
<CAPTION>
-----------------------------   --------------------------------------    ---------------------------------------
                                           Number of Securities                  Percent of Total Options/SARs
       Name                      Underlying Options/SARs Granted (#)        Granted to Employees in Fiscal Year
=============================   ======================================    =======================================
<S>                             <C>                                       <C>
CEO - J. Thomas Whelchel                           2,500
-----------------------------   --------------------------------------    ---------------------------------------
                                                     385
-----------------------------   --------------------------------------    ----------------------------------------
                                                     569
-----------------------------   --------------------------------------    ----------------------------------------
                                                   3,000
-----------------------------   --------------------------------------    ----------------------------------------
                                                     658
-----------------------------   --------------------------------------    ----------------------------------------
                                                     713
                                                   -----
-----------------------------   --------------------------------------    ----------------------------------------
                                  Total            7,825                                    9.9%
-----------------------------   --------------------------------------    ----------------------------------------

-----------------------------   --------------------------------------    ----------------------------------------
Michael D. Hodges                                    265
-----------------------------   --------------------------------------    ----------------------------------------
                                                     406
-----------------------------   --------------------------------------    ----------------------------------------
                                                     449
-----------------------------   --------------------------------------    ----------------------------------------
                                                     548
                                                   -----
-----------------------------   --------------------------------------    ----------------------------------------
                                  Total            1,668                                    2.1%
-----------------------------   --------------------------------------    ----------------------------------------

<CAPTION>
-----------------------------   --------------------------------------    ---------------------------------------

           Name                    Exercise or Base Price ($/share)                Expiration Date
=============================   ======================================   ========================================
<S>                             <C>                                      <C>
CEO - J. Thomas Whelchel                      $9.49                                  1/27/09
-----------------------------   --------------------------------------    ---------------------------------------
                                              $9.40                                  4/01/09
-----------------------------   --------------------------------------    ---------------------------------------
                                              $9.23                                  6/30/09
-----------------------------   --------------------------------------    ---------------------------------------
                                              $9.16                                  7/21/09
-----------------------------   --------------------------------------    ---------------------------------------
                                              $8.36                                  9/30/09
-----------------------------   --------------------------------------    ---------------------------------------
                                              $6.84                                 12/15/09

-----------------------------   --------------------------------------    ---------------------------------------

-----------------------------   --------------------------------------    ---------------------------------------

-----------------------------   --------------------------------------    ---------------------------------------
Michael D. Hodges                             $9.40                                  4/01/09
-----------------------------   --------------------------------------    ---------------------------------------
                                              $9.23                                  6/30/09
-----------------------------   --------------------------------------    ---------------------------------------
                                              $8.36                                  9/30/09
-----------------------------   --------------------------------------    ---------------------------------------
                                              $6.84                                 12/15/09

-----------------------------   --------------------------------------    ---------------------------------------

-----------------------------   --------------------------------------    ---------------------------------------
</TABLE>

                                     -81-
<PAGE>

EMPLOYMENT AGREEMENTS

On February 20, 1997, the Bank and Michael D. Hodges entered into an employment
agreement ("Hodges Agreement") summarizing the terms of Mr. Hodges' employment
with the Bank.  Pursuant to the Hodges Agreement, Mr. Hodges is to serve as
President and Chief Executive Officer of the Bank.  Mr. Hodges' base salary was
set at $125,000 per year, subject to possible increases.  The Hodges Agreement
provides that Mr. Hodges is entitled to bonuses and other benefits including an
automobile.  The Bank may terminate Mr. Hodges' employment with the Bank with or
without cause.  However, if Mr. Hodges is dismissed from his employment for
reasons other than for cause, the Bank shall for a period of one year following
his termination continue to pay him his then current base salary.  The initial
term of the Hodges Agreement was through February 20, 1999, and thereafter, is
annually renewed for successive one-year periods unless either party gives 90-
days notice of non-renewal.

Mr. Whelchel served as CEO of the Company beginning October 17, 1996, and
throughout the period covered by this report without any written employment
agreement, but with the understanding, however, that the compensation committee
of the Board would determine the sum to be paid to him for his services.  The
recommendation by the compensation committee was approved by the full Board, and
the compensation paid to Mr. Whelchel as disclosed in the Summary Compensation
Table included in this Item 10.  Mr. Whelchel is continuing to serve as CEO of
the Company with no compensation.

Item 11.  Security Ownership of Certain Beneficial Owners and Management.

The following table sets forth share ownership information as of December 31,
1999 with respect to any person known to GIFH to be a beneficial owner of more
than 5% of GIFH's Common Stock. The information as to beneficial ownership was
furnished to GIFH by or on behalf of the persons named. Unless otherwise
indicated, each of the shareholders has sole voting and investment power with
respect to the shares of Common Stock beneficially owned. Percentage ownership
is calculated based on outstanding shares.

                                      -82-
<PAGE>

Security Ownership of Certain Beneficial Owners*

     Name and Address                   Number of           Percent of
     of Beneficial Owner                  Shares               Class

1.   Michael J. Kistler                  132,420              5.29%
     4 Sorghum Lane
     Savannah, Georgia 31411

2.   Charles Werk
     203 Medinah
     St. Simons Island, Georgia 31522    154,636              6.18%

*Information relating to beneficial ownership of Common Stock is based upon
"beneficial ownership" concepts set forth in rules of the SEC under Section
13(d) of the Securities Exchange Act of 1934, as amended (the "Act").  Under
such rule, a person is deemed to be a "beneficial owner" of a security if that
person has or shares "voting power", which includes the power to vote or direct
the voting of such security, or "investment power", which includes the power to
dispose of, or to direct the disposition of, such security.  A person is also
deemed to be a beneficial owner of any security of which that person has the
right to acquire beneficial ownership within sixty (60) days. Under the rules,
more than one person may be deemed to be a beneficial owner of the same
securities, and a person may be deemed to be a beneficial owner of securities as
to which he has no beneficial interest.  For instance, beneficial ownership
includes spouses, minor children and other relatives residing in the same
household, and trusts, partnerships, corporations or deferred compensation plans
which are affiliated with the principal.

The following table sets forth share ownership information as of December 31,
1999, with respect to (i) each director and named executive officer of GIFH who
beneficially owns Common Stock, including Common Stock owned in the form of
Units, and (ii) all directors and named executive officers of GIFH as a group.
The information as to beneficial ownership was furnished to GIFH by or on behalf
of the persons named.  Unless otherwise indicated, each of the shareholders has
sole voting and investment power with respect to the shares beneficially owned.
Percentage ownership is calculated based on outstanding shares.

                                      -83-
<PAGE>

Security Ownership of Management*

                                                                      Percent
Name and Address                                                      -------
of Beneficial Owner                            Number of Shares       of Class
-------------------                            ----------------       --------

L. McRee Harden (1)                                 23,495             .94%
P.O. Box 2369
Darien, GA 31305

Michael D. Hodges (2)                               90,838            3.63%
207 Dunbarton Drive
St. Simons Island, GA 31522

Russell C. Jacobs, Jr. (3)                          24,769             .99%
308 Oak Grove Island Drive
Brunswick, GA 31525

C. Kermit Keenum (4)                                23,687             .95%
100 Old Mountain Road
Powder Springs, GA 30073

Jimmy D. Veal (5)                                   92,458            3.70%
290 Osprey
Brunswick, GA 31525

J. Thomas Whelchel (6)                              56,099            2.24%
22 Boundary Lane
St. Simons Island, GA 31522

Charles R. Acosta (7)                               36,173            1.45%
226 Medinah
St. Simons Island, GA 31522

James M. Fiveash (8)                                14,167             .57%
605 King Cotton Row
Brunswick, GA 31525

Charles K. Werk (9)                                154,636            6.18%
203 Medinah
St. Simons Island, GA 31522

All Directors and Executive                        516,322           20.64%
Officers as a Group (9 persons)

                                      -84-
<PAGE>

*Information relating to beneficial ownership of Common Stock is based upon
"beneficial ownership" concepts set forth in rules of the SEC under Section
13(d) of the Act.  Under such rule, a person is deemed to be a "beneficial
owner" of a security if that person has or shares "voting power," which includes
the power to vote or direct the voting of such security, or "investment power,"
which includes the power to dispose of, or to direct the disposition of, such
security.  A person is also deemed to be a beneficial owner of any security of
which that person has the right to acquire beneficial ownership within sixty
(60) days.  Under the rules, more than one person may be deemed to be a
beneficial owner of the same securities, and a person may be deemed to be a
beneficial owner of securities as to which he has no beneficial interest.  For
instance, beneficial ownership includes spouses, minor children and other
relatives residing in the same household, and trusts, partnerships, corporations
or deferred compensation plans which are affiliated with the principal.

(1)  Includes 1,250 shares owned by his wife for which he disclaims beneficial
     ownership.  Also includes the right to acquire 9,745 shares pursuant to
     vested options.
(2)  Includes the right to acquire 42,160 shares pursuant to vested options.
(3)  Includes the right to acquire 9,269 shares pursuant to vested options.
(4)  Includes the right to acquire 8,187 shares pursuant to vested options.
(5)  Includes the right to acquire 12,518 shares pursuant to vested options and
     18,875 shares owned by his two adult sons for which he disclaims beneficial
     ownership.
(6)  Includes 25 shares owned by Mr Whelchel's daughter and 1,500 shares owned
     by his wife for which he disclaims beneficial ownership, and 23,221 shares
     pursuant to vested options.
(7)  Includes the right to acquire 5,547 shares pursuant to vested options.
(8)  Includes 6,000 shares owned individually by Mr. Fiveash and 1,250 shares
     deemed beneficially owned by him in custodian accounts for a minor child.
     Also includes the right to acquire 6,917 shares pursuant to vested options.
(9)  Includes 1,000 shares owned by his wife for which he disclaims beneficial
     ownership.

Item 12.  Certain Relationships and Related Transactions.

During 1999, the Bank loaned funds to certain of GIFH's executive officers and
directors or to businesses in which such persons had an interest.  All such
loans were: (a) in the ordinary course of business, (b) on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons, and (c) did not involve
more than the normal risk of collectibility or present other unfavorable
features.

                                      -85-
<PAGE>

                                    PART IV

Item 13.  Exhibits List and Reports on Form 8-K.

A.   Exhibits Required Under Item 601 of Regulation S-B.

Exhibit
  No.     Description

3(a)      Restatement and Amendment of the Articles of Incorporation of GIFH,
          effective August 24, 1995 (filed as Exhibit 3.(i) to GIFH's Quarterly
          Report on Form 10-QSB for the quarter ended September 30, 1995(File
          Number 33-19735-A), filed with the Commission on November 13, 1995 and
          incorporated herein by reference).

3(b)      Bylaws of GIFH (filed as Exhibit 3.(ii) to GIFH's Quarterly Report on
          Form 10-QSB for the quarter ended September 30, 1995 (File No. 33-
          19735- A), filed with the Commission on November 13, 1995 and
          incorporated herein by reference).

10(a)     Loan and Security Agreement dated March 14, 1995, between BankAmerica
          Business Credit, Inc. and First Credit Service Corporation (filed as
          Exhibit 10(b) to GIFH's Annual Report on Form 10-KSB (File Number 33-
          19735-A), filed with the Commission on March 31, 1995 and incorporated
          herein by reference).

10(b)     The Golden Isles Financial Holdings, Inc. 1991 Incentive Stock Option
          Plan and The Golden Isles Financial Holdings, Inc. 1991 Nonstatutory
          Stock Option Plan (filed as Exhibit 10(a) to GIFH's Annual Report on
          Form 10-KSB (File Number 33-19735-A), filed with the Commission on
          March 31, 1994 and incorporated herein by reference).

10(c)     Stock Option Agreement Under Golden Isles Financial Holdings, Inc.
          1991 Incentive Stock Option Plan and 1991 Nonstatutory Stock Option
          Plan dated February 22, 1994, between Golden Isles Financial Holdings,
          Inc. and Paul D. Lockyer (filed as Exhibit 10(e) to GIFH's Annual
          Report on Form 10-KSB (File Number 33-19735-A), filed with the
          Commission on March 31, 1995 and incorporated herein by reference).

10(d)     Stock Option Agreement Under Golden Isles Financial Holdings, Inc.
          1991 Incentive Stock Option Plan and 1991 Nonstatutory Stock Option
          Plan dated February 22, 1994, between Golden Isles Financial Holdings,
          Inc. and Michael D. Hodges (filed as Exhibit 10(f) to GIFH's Annual
          Report on Form 10-KSB(File Number 33-19735-A), filed with the
          Commission on March 31, 1995 and incorporated herein by reference).

10(e)     Stock Option Agreement Under Golden Isles Financial Holdings, Inc.
          1991 Incentive Stock Option Plan and 1991 Nonstatutory Stock Option
          Plan dated January 28, 1993, between Golden Isles Financial Holdings,
          Inc. and Paul D. Lockyer (filed as Exhibit 10(g) to the Registrant's
          Annual Report on Form 10-KSB (File Number 33-19735-A), filed with the
          Commission on March 31, 1995 and incorporated herein by reference).

                                      -86-
<PAGE>

10(f)     Stock Option Agreement Under Golden Isles Financial Holdings, Inc.
          1991 Incentive Stock Option Plan and 1991 Nonstatutory Stock Option
          Plan dated January 28, 1993, between Golden Isles Financial Holdings,
          Inc. and Michael D. Hodges (filed as Exhibit 10(h) to the Registrant's
          Annual Report on Form 10-KSB (File Number 33-19735-A), filed with the
          Commission on March 31, 1995 and incorporated herein by reference).

10(g)     Golden Isles Financial Holdings, Inc. 1995 Stock Option Plan (filed as
          Exhibit 10.(i)to the Registrant's Quarterly Report on Form 10-QSB for
          the quarter ended September 30, 1995 (File Number 33-19735-A), filed
          with the Commission on November 13, 1995 and incorporated herein by
          reference).

10(h)     Form of Option Agreement, dated July 25, 1995, entered into between
          GIFH and each of Paul D. Lockyer and Michael D. Hodges (filed as
          Exhibit 10.(iii)to the Registrant's Quarterly Report on Form 10-QSB
          for the quarter ended September 30, 1995 (File Number 33-19735-A),
          filed with the Commission on November 13, 1995 and incorporated herein
          by reference).

10(i)     Employment Agreement between the Bank and Paul D. Lockyer by letter
          dated June 5, 1992 (filed as Exhibit 10.3 to the Registrant's
          Registration Statement on Form SB-2 (File Number 33-77822), filed with
          the Commission on May 27, 1994 and incorporated herein by reference).

10(j)     Employment Agreement between the Bank and Michael D. Hodges by letter
          dated June 5, 1992 (filed as Exhibit 10(j) to the Registrant's Annual
          Report on Form 10-KSB (File Number 33-19735-A), filed with the
          Commission on March 31, 1995 and incorporated herein by reference).

10(k)     Form of Restricted Stock Grant Agreement, dated July 25, 1995, entered
          into between the Company and each of its directors and named executive
          officers (filed as Exhibit 10.(ii) to the Registrant's Quarterly
          Report on Form 10-QSB for the quarter ended September 30, 1995 (File
          No. 33-19735-A), filed with the Commission on November 13, 1995 and
          incorporated herein by reference).

10(l)     Sales Contract dated November 29, 1995 between 200 Plantation Chase
          Company, a Georgia general partnership, and the Registrant filed as
          Exhibit 10(l) to the Registrant's Annual Report on Form 10-KSB (File
          Number 33-19735-A), filed with the Commission on March 31, 1996 and
          incorporated herein by reference).

10(m)     Loan Agreement dated March 29, 1997, between American Banking Company
          and Golden Isles Financial Holdings, Inc. (filed as Exhibit 10(m) to
          Registrant's Annual Report on Form 10-KSB, filed with the Commission
          on March 31, 1997, and incorporated herein by reference).

                                      -87-
<PAGE>

10(n)     Employment Agreement between the Bank and Michael D. Hodges dated
          February 20, 1997 (filed as Exhibit 10(n) to Registrant's Annual
          Report on Form 10-KSB, filed with the Commission on March 31, 1997,
          and incorporated herein by reference).

10(o)     Letter Agreement between Golden Isles Financial Holdings, Inc. and
          James T. Layman dated December 26, 1996 (Filed as Exhibit 10(o) to
          Registrant's Annual Report on Form 10-KSB, filed with the Commission
          on March 30, 1999, and incorporated herein by reference).

10(p)     Asset Purchase Agreement by and among GIFH, FCC and New South
          Financial Services, Inc., dated August 11, 1998 (filed as Exhibit 2.1
          to Registrant's Current Report on Form 8-K filed with the Commission
          on August 27, 1998, and incorporated herein by reference).

21        Subsidiaries of GIFH (filed as Exhibit 21 to Registrant's Annual
          Report on Form 10-KSB, filed with the Commission on March 31, 1997,
          and incorporated herein by reference).

24        Power of Attorney (part of signature page).

27        Financial Data Schedule.

99(a)     Amendment No. 2 to Registrant's Registration Statement on Form SB-2
          (File No. 33-77822), filed with the Commission on April 29, 1995, is
          incorporated herein by reference.

99(b)     Text of Resolution adopted by Company's Board of Directors on December
          9, 1996 (filed as Schedule 1 to Registrant's Definitive Proxy
          Statement dated February 17, 1997 (File No. 0-27448), and filed with
          the Commission on February 18, 1997, and incorporated herein by
          reference.

99(c)     Amendment No. 3 to Registrant's Registration Statement on Form SB-2
          (File No. 33-77822), filed with the Commission on May 1, 1996, is
          incorporated herein by reference.

99(d)     Amendment No. 4 to Registrant's Registration Statement on Form SB-2
          (File No. 33-77822), filed with the Commission on May 1, 1997, is
          incorporated herein by reference.

99(e)     Amendment No. 5 to Registrant's Registration Statement on Form SB-2
          (File No. 33-77822), filed with the Commission on May 5, 1997, is
          incorporated herein by reference.

B.   Reports on Form 8-K.

No reports on Form 8-K were filed during the last quarter of the period covered
by this report.

                                      -88-
<PAGE>

                                 SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been duly signed on behalf of Registrant by the undersigned,
thereunto duly authorized, in the City of St. Simons Island, State of Georgia,
on March 24, 2000.

                              GOLDEN ISLES FINANCIAL HOLDINGS, INC.

                              By:    /s/ J. Thomas Whelchel
                                 --------------------------------------------
                                 J. THOMAS WHELCHEL, Chairman of the Board of
                                 Directors and Chief Executive Officer

     Know All Men By These Presents, that each person whose signature appears
below constitutes and appoints J. Thomas Whelchel and Michael D. Hodges, and
either of them (with full power in each to act alone), as true and lawful
attorneys-in-fact, with full power of substitution, for him in his name, place
and stead, in any and all capacities, to sign any amendment to this report, and
to file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as full and to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each of said
attorneys-in-fact, or either of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons in the capacities indicated on
March 24, 2000.

  /s/ J. Thomas Whelchel            Chairman of the Board of Directors,
----------------------------        Chief Executive Officer (principal executive
J. Thomas Whelchel                  officer)


  /s/ L. McRee Harden               Director
----------------------------
L. McRee Harden

  /s/ Michael D. Hodges             President, Chief Operating Officer
----------------------------        and Director
Michael D. Hodges

  /s/ Russell C. Jacobs, Jr.        Director
----------------------------
Russell C. Jacobs, Jr.

  /s/ James M. Fiveash              Director
----------------------------
James M. Fiveash

  /s/ Claude Kermit Keenum          Director
----------------------------
Claude Kermit Keenum

  /s/ Charles Ray Acosta            Director
----------------------------
Charles Ray Acosta

  /s/ Jimmy D. Veal                 Vice Chairman of the Board of
----------------------------        Directors; Secretary and Treasurer
Jimmy D. Veal

  /s/ Charles K. Werk               Director
----------------------------
Charles K. Werk

                                      -89-
<PAGE>

INDEX TO EXHIBITS

Exhibit                                                 Sequential
Number                   Description                   Page Number

27                       Financial Data Schedule