U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-KSB



|(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
|--------------------------------------------------------------------------------------------------------------------
|For the fiscal year ended September 30, 2001                                                                        
|[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)      
|For the transition period _____________ to _____________                                                            
|Commission file number: 0-16657                                                                                     
|FIRST GEORGIA HOLDING, INC. 
(Name of Small Business Issuer)                                                        
|Georgia                                                                                                             
|(State or other jurisdiction of incorporation or organization)                                                      
|                                                                                                                    
|1703 Gloucester Street, Brunswick, GA 31521 
(Address of principal executive offices)                               
|                                                                                                                    

Registrant's telephone number, including area code:(912) 267-7283

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $1.00

Check whether the issuer (1) has filed all reports required to be filed by section 12 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 60 days. Yes [ X ] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statement incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-K. [ X ]

State issuer's revenues for its most recent fiscal year $23,156,807

State the aggregate market value of the voting stock held by non-affiliates of the registrant as of December 1, 2001:

5,233,056 Shares of Common Stock, $1.00 par value -- $21,560,191 based upon approximate market value of $4.12 per share at December 1, 2001.

State the number of shares outstanding of each of the issuer's classes of common stock, as of December 1, 2001:

Common Stock, $1.00 par value - 7,713,723 shares

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company's Proxy Statement (the "Proxy Statement") for the Annual Meeting of Shareholders scheduled to be held January 22, 2002 are incorporated by reference into Part I and Part III.

Portions of the Company's Annual Report (the "Annual Report") to Shareholders for the year ended September 30, 2001 are incorporated by reference into Part I, Part II and Part III.

FIRST GEORGIA HOLDING, INC.

FORM 10-KSB

INDEX



|         |               |                                                                                                                 | PAGE
|-------- | ------------- | --------------------------------------------------------------------------------------------------------------- | ----
|Part I   |               |                                                                                                                 |     
|         | Item 1.       | Business                                                                                                        | 3   
|         | Item 2.       | Description of Properties                                                                                       | 29  
|         | Item 3.       | Legal Proceedings                                                                                               | 29  
|         | Item 4.       | Submission of Matters to a Vote of Security Holders                                                             | 29  
|Part II  |               |                                                                                                                 |     
|         | Item 5.       | Market for Common Equity and Related Stockholder Matters                                                        | 30  
|         | Item 6.       | Management's Discussion and Analysis or Plan of Operations                                                      | 30  
|         | Item 7.       | Financial Statements                                                                                            | 30  
|         | Item 8.       | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                            | 30  
|Part III | Item 9.       | Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act | 31  
|         | Item 10.      | Executive Compensation                                                                                          | 31  
|         | Item 11.      | Security Ownership of Certain Beneficial Owners and Management                                                  | 31  
|         | Item 12.      | Certain Relationships and Related Transactions                                                                  | 31  
|         | Item 13.      | Exhibits and Reports on Form 8-K                                                                                | 31  
|         |               |                                                                                                                
|         | Signatures    | 33                                                                                                             
|         | Exhibit Index | 34                                                                                                             
|         |               |                                                                                                                



PART I

Item 1. DESCRIPTION OF BUSINESS

Business of the Company

First Georgia Holding, Inc. (the Company), was incorporated as a Georgia corporation on December 16, 1987, for the purpose of acquiring all of the issued and outstanding shares of First Georgia Bank, F.S.B. (formerly known as First Georgia Savings Bank, F.S.B.)(the Bank) pursuant to a plan of reorganization. The reorganization of the Bank into a holding company structure became effective on April 30, 1988, and the Bank is now a wholly-owned subsidiary of the Company.

Other than its ownership of the Bank, the Company has not engaged in any material operations to date and management of the Company has no immediate plans to engage in any non-banking activities.

The holding company structure provides the Company with the ability to expand and diversify its financial services beyond those currently offered through the Bank. As a holding company, the Company has greater flexibility than the Bank to diversify its business activities, through existing or newly-formed subsidiaries, or through an acquisition or merger. Commencement of non-banking operations by subsidiaries, if they are organized, will be contingent upon approval by the Board of Directors of the Company and by regulatory authorities as appropriate. While the Company has no plans, arrangements, agreements or understandings regarding diversification through acquisition or development of other businesses, the Board of Directors believes that the holding company structure offers significant advantages.

The Company may, in the future, enter into a management agreement for the purpose of rendering certain services to the Bank. No proposal and no terms of such agreement, however, have been considered as yet and it has not been decided that such an agreement will be made. Certain restrictions on the total compensation under management and similar agreements are imposed by federal regulation and, under certain circumstances, regulatory approval may be required.

Except for the officers of the Bank who presently serve as officers of the Company, the Company does not have any employees.

The Company's executive office is located at 1703 Gloucester Street, Brunswick, Georgia 31520. At the present time the Company does not have any plans to establish additional offices.

Business of the Bank

The Bank is a federal stock savings bank headquartered in Brunswick, Georgia. It was chartered in 1983 and opened for business on January 31, 1984 with approximately $8.6 million of acquired deposits. The Bank's business consists primarily of residential and consumer lending and retail banking. To a lesser extent the Bank engages in commercial real estate lending and construction lending.

The Bank's retail banking operation consists of attracting deposits and making commercial and consumer loans. It attracts deposits by offering a wide array of banking services, including checking accounts, overdraft protection, various savings programs, IRAs, and four automated teller machines. Similarly, the Bank offers a full range of commercial loans, including short-term loans for working capital purposes, seasonal loans, lines of credit, accounts receivable loans and inventory loans, as well as a full range of consumer loans, including automobile, boat, home improvement and other similar loans.

Commercial real estate and construction lending includes construction and permanent loans on multi-family apartment buildings, shopping centers, office buildings and other income producing properties located mainly in the Bank's primary market area.

The principal executive offices of the Bank are located at 1703 Gloucester Street, Brunswick, Georgia 31520 and the telephone number at that address is (912) 267-7283.

Summary of Financial Results

First Georgia Holding, Inc. reported net income of $2,007,786 in 2001, an increase of $576,131 over 2000. Net interest income after provision for loan losses increased a total of $1,761,474 to $9,518,638 in 2001 compared to $7,757,164 in 2000. Other income increased by a total of $198,191to a total of $2,904,887 in 2001 compared to $2,706,696 in 2000. Other expenses increased to $9,284,509, an increase of $1,161,455 over 2000.

Return on Average Assets and Equity

Return on average assets for the year ended September 30, 2001 was .82% as compared to .61% for the year ended September 30, 2000. Return on average equity for the year ended September 30, 2001 was 10.37% compared to 7.79% for the year ended September 30, 2000. These increases were due primarily to an increase in the net interest margin and a decrease in the provision for loan losses as compared to the previous year.

SELECTED STATISTICAL INFORMATION

The following tables set forth certain statistical information and should be read in conjunction with the consolidated financial statements of the Company and Bank.

|                                 | Years Ended September 30,
|-------------------------------- | -------------------------
|                                 | 2001                     
|                                 |                          
|Return on Average Assets         | 0.82%                    
|Return on Average Equity         | 10.37%                   
|Average Equity to Average Assets | 7.91%                    
|Dividend Payout Ratio            | 34.58%                   



|SELECTED STATISTICAL INFORMATION
AVERAGE BALANCE SHEETS
|-------------------------------------------------------
|                                                       
|                                                       
|                                                       
|Cash and due from banks                                
|Federal funds sold                                     
|Interest-bearing deposits in other banks               
|Investment securities held to maturity                 
|Loans receivable, net                                  
|Real estate owned                                      
|Federal Home Loan Bank stock                           
|Premises and equipment, net                            
|Intangible assets, net                                 
|Accrued interest receivable                            
|Other assets                                           
|                                                       
|                                                       
|LIABILITIES AND STOCKHOLDERS EQUITY                    
|Liabilities:                                           
|Deposits                                               
|Federal Home Loan Bank advances                        
|Other borrowed money                                   
|Accrued expenses and other liabilities                 
|                                                       
|Stockholders equity                                    
|Total liabilities and stockholders equity              



|                                     | Years Ended September 30,
|------------------------------------ | -------------------------
|                                     | 2001                     
|Interest earned on:                  |                          
|Loans                                | $ 18,141,655             
|Investment securities                | 1,650,762                
|Other                                | 459,503                  
|Total interest income                | 20,251,920               
|                                     |                          
|Interest paid on:                    |                          
|Deposits                             | 9,918,978                
|Federal Home Loan Bank advances      |                          
|and other borrowings                 | 379,314                  
|Total Interest expense               | 10,298,292               
|NET INTEREST EARNED                  | $ 9,953,628              
|                                     |                          
|Average percentage earned on:        |                          
|Loans                                | 9.40%                    
|Taxable investment securities        | 7.30%                    
|Other                                | 4.70%                    
|Total interest earning assets        | 9.05%                    
|                                     |                          
|Average percentage paid on:          |                          
|Deposits                             | 4.57%                    
|Federal Home Loan Bank advances      |                          
|and other borrowings                 | 6.12%                    
|Total interest bearing liabilities   | 4.61%                    
|                                     |                          
|NET YIELD ON INTEREST EARNING ASSETS | 4.44%                    

"Management's Discussion and Analysis of Financial Condition and Results of Operations - Yields Earned and Rates Paid" in the Company's Annual Report is incorporated by reference herein.

Lending Activities

General

Thrift institutions are permitted to invest up to 400% of their capital in commercial real estate loans. Thrift institutions are also permitted to invest up to 10% of their assets in secured or unsecured loans for commercial, corporate, business or agricultural purposes. Institutions may also invest up to 35% of their assets in consumer loans and up to 10% of their assets in tangible personal property in order to engage in personal property leasing.

Loan Portfolio Analysis

The Bank's net loan portfolio totaled approximately $187,526,000 at September 30, 2001, representing approximately 76% of its total assets. On that date, approximately 60% of its total outstanding loans were secured by mortgages on residential property. The balance of the Bank's outstanding loans at that date consisted of commercial real estate loans, construction loans, consumer loans and commercial loans.

The Bank extends credit to customers throughout its market area with a concentration in real estate mortgage loans. The real estate loan portfolio is substantially secured by properties located throughout Southeast Georgia. Although the Bank has a diversified loan portfolio, a substantial portion of its borrowers' ability to repay such loans is dependent upon the economy in the Bank's market area.

Set forth in the following table is selected data relating to the composition of the Bank's loan portfolio by type of loan and type of security on the dates indicated.

LOAN ANALYSIS

|Loans by Type of Security: | 2001           | 2000    | 1999     | 1998    | 1997    
|-------------------------- | -------------- | ------- | -------- | ------- | --------
|Real Estate Loans:         | (In Thousands)
|Residential:               |                |         |          |         |         
|One-four family:           |                |         |          |         |         
|Conventional               | $106,776       | 56.94%  | $114,014 | 58.88%  | $ 92,969
|FHA-VA                     | -              | 0.00%   | -        | 0.00%   | 494     
|Multi-family conventional  | 175            | 0.09%   | 402      | 0.21%   | 3,003   
|Total Residential          | 106,951        | 57.03%  | 114,416  | 59.09%  | 96,466  
|                           |                |         |          |         |         
|Commercial property        | 34,192         | 18.23   | 34,736   | 17.94%  | 26,402  
|Land development and other | 16,663         | 8.89    | 14,758   | 7.62%   | 19,546  
|Total Real Estate Loans    | 157,806        | 84.15   | 163,910  | 84.65%  | 142,414 
|                           |                |         |          |         |         
|Consumer loans             | 17,454         | 9.31    | 17,089   | 8.82%   | 14,801  
|Commercial loans           | 14,824         | 7.91    | 15,285   | 7.89%   | 17,481  
|Unearned interest income   | (25)           | -0.01   | (63)     | -0.03%  | (61)    
|Allowance for loan losses  | (2,414)        | -1.29   | (2,365)  | -1.22%  | (1,236) 
|Deferred loan (fees) cost  | (119)          | -0.06   | (212)    | -0.11%  | (203)   
|Total                      | $187,526       | 100.00% | $193,644 | 100.00% | $173,196



LOAN ANALYSIS (Continued)



|                                   | September 30, 
|---------------------------------- | --------------
|                                   | 2001          
|Loans by Type of Loan:             | (In Thousands)
|Real Estate Loans:                 |               
|Loans on existing property:        |               
|Fixed Rate                         | $ 41,520      
|One year ARM and variable rate (1) | 81,217        
|Three year ARM                     | 866           
|Construction loans                 | 34,203        
|Total real estate loans            | 157,806       
|                                   |               
|Consumer loans                     | 17,454        
|Commercial loans                   | 14,824        
|Unearned interest income           | 25            
|Allowance for loan losses          | 2,414         
|Deferred loan (fees) cost          | 119           
|Total                              | $187,526      

(1) An ARM is an adjustable rate mortgage

LOAN MATURITY SCHEDULE

The following table sets forth certain information at September 30, 2001 regarding the dollar amounts of loans maturing in the Bank's portfolio based on their contractual terms to maturity. Demand loans, loans having no stated schedule of repayments and no stated maturity, and overdrafts, are reported as due in one year or less. This table does not consider the repricing of loans to be maturities. Interest rate sensitivity is incorporated herein by reference from the Management's Discussion and Analysis of Financial Condition and Results of Operations - Asset/Liability Management in the Annual Report to Shareholders for 2001.

|Maturities                     | Real Estate Mortgage | Real Estate Construction | Consumer | Commercial and other      | Total    
|------------------------------ | -------------------- | ------------------------ | -------- | ------------------------- | ---------
|Within 1 year                  | $ 36,989             | $ 30,552                 | $ 5,494  | $ 7,432                   | $ 80,467 
|After 1 year through 5 years   | 24,975               | 3,651                    | 11,623   | 6,689                     | 46,938   
|After 5 years through 10 years | 9,919                | -                        | 143      | 616                       | 10,678   
|After 10 years                 | 51,720               | -                        | 194      | 87                        | 52,001   
|Total                          | $ 123,603            | $ 34,203                 | $ 17,454 | $ 14,824                  | $ 190,094
|                               |                      |                          |          | Less:                     |          
|                               |                      |                          |          | Unearned Income           | (25)     
|                               |                      |                          |          | Allowance for Loan losses | (2,414)  
|                               |                      |                          |          | Deferred Loan Fees        | (119)    
|                               |                      |                          |          |                           | $ 187,526

The following table sets forth the dollar amount of all loans due more than one year after September 30, 2001 which have predetermined interest rates and which have floating or adjustable interest rates.

|                             | Real Estate Mortgage | Real Estate Construction | Consumer | Commercial and Other | Total  
|---------------------------- | -------------------- | ------------------------ | -------- | -------------------- | -------
|                             | (In Thousands)      
|Predetermined rates          | $ 30,463             | -                        | 11,468   | 5,506                | 47,437 
|Floating or adjustable rates | 56,151               | 3,651                    | 492      | 1,886                | 62,180 
|Total                        | $ 86,614             | 3,651                    | 11,960   | 7,392                | 109,617

Lending Policies

Federal regulations limit the amount which federally chartered thrift institutions may lend in relation to the appraised value of the real estate securing the loan, as determined by an appraisal at the time of loan origination. Those regulations permit a maximum loan-to-value ratio of 100% for real estate loans. The Bank's lending policies generally limit the maximum loan-to-value ratio on residential mortgage loans to 95% of the lesser of the appraised value or purchase price. Multi-family residential and commercial real estate loans and unimproved real estate loans generally do not exceed 90% of value. The loan-to-value ratio, maturity and other provisions of the loans made by the Bank generally reflect the policy of making less than the maximum loan permissible under applicable regulations in accordance with sound lending practices, market conditions and underwriting standards established by the Bank.

In an effort to keep the yields on its loan portfolio and investments more interest rate sensitive, the Bank has implemented a number of measures including: (a) generally originating long-term fixed rate mortgage loans for brokerage to other financial institutions; (b) emphasizing origination of ARMs on residential and commercial properties when market conditions permit; (c) originating construction loans secured by residential properties generally for a 12-month period at interest rates determined by reference to the Bank's prime rate; and (d) originating consumer and commercial loans having either adjustable rates or relatively short maturities.

Single Family Residential Loans

One of the lending activities of the Bank has been the origination of single family residential loans through its mortgage lending operation. Through an arrangement with another financial institution, the Bank brokers substantially all of its fixed rate single family residential loans. This allows the Bank to offer a broader base of financing alternatives than would be possible if the Bank were structuring all of its loans to sell to the Federal Home Loan Mortgage Corporation (FHLMC) or the Federal National Mortgage Association (FNMA).

Federally chartered thrift institutions are authorized to make home loans on which the interest rate, loan balance or maturity may be adjusted, provided that the adjustments are tied to specified indices. The rate adjustments are determined by reference to cost of funds and Treasury securities indices and are limited generally to 1.5-2.0% per adjustment period and 5-6% over the life of the loan.

Commercial Real Estate Loans

Current regulations permit federal institutions to invest up to 400% of their capital in commercial real estate loans. At September 30, 2001, the Bank had 193% of its capital invested in commercial real estate loans. The commercial real estate loans originated by the Bank are primarily secured by multi-family apartment buildings, shopping centers, office buildings and other income-producing properties. The interest rates on commercial real estate loans presently offered by the Bank generally adjust every one to three years. The rate is generally determined by reference to money center banks' prime rates. The Bank's commercial real estate loans have various terms, with the payments based on a 15 to 25 year amortization schedule, and have balloon maturities of 5 to 7 years. The Bank generally requires that such loans have a minimum debt service coverage of 1.15 and a loan-to-value ratio of not more than 90%.

Commercial real estate lending entails significant additional risks compared to residential lending. Commercial real estate loans typically involve large loan balances to single borrowers or groups of related borrowers. The payment experience of such loans typically depends upon the successful operation of the real estate project. These risks can be significantly affected by supply and demand conditions in the market for office and retail space and for apartments, and as such may be subject, to a greater extent than residential real estate loans, to adverse conditions in the economy. In dealing with these risk factors, the Bank generally limits itself to a real estate market or to borrowers with which it is familiar and participates portions of its commercial real estate loans when necessary. The Bank concentrates on originating commercial real estate loans secured by properties generally located within its primary market area, although the Bank will continue, on a limited basis, to originate commercial real estate loans secured by properties located in other parts of Georgia and in other states.

Construction Loans

The Bank originates construction loans on single family residences. Such construction loans generally have a term of 12 months or less. The interest rates charged by the Bank on construction loans are determined by reference to the prime rate charged by money center banks and vary depending upon the type of property, the loan amount and the credit worthiness of the borrower. The Bank generally requires personal guarantees of payment from the principals of the borrowing entities for the full amount of the loan, and it is the policy of the Bank to enforce guarantees in the event of non-payment of the loan.

The Bank also originates construction loans on multi-family and commercial real estate. The interest rates on such loans presently offered by the Bank are also determined by reference to the prime rate charged by money center banks. Multi-family and commercial real estate construction financing generally exposes the lender to a greater risk of loss than long-term financing on improved, occupied real estate, due in part to the fact that the loans are underwritten on projected rather than historical income and rental results. The Bank's risk of loss on such loans depends largely upon the accuracy of the initial appraisal of the property's value at completion of construction and the estimated cost (including interest) of completion. If either estimate proves to have been inadequate and the borrower is unable to provide additional funds pursuant to his or her guarantee, the Bank either may be required to advance funds beyond the amount originally committed to permit completion of the development or be confronted at the maturity of the loan with a project whose value is insufficient to assure full repayment.

The Bank's underwriting criteria are designed to evaluate and to minimize the risks of each commercial real estate construction loan. The Bank considers evidence of the financial stability and reputation of both the borrower and the contractor, the amount of the borrower's cash equity in the project, independent evaluation and review of the building costs, local market conditions, pre-construction sales and leasing information based upon evaluation of similar projects, the use of independent engineers to examine plans and monitor construction and the borrower's cash flow projections upon completion. The Bank may require a performance bond in the amount of the construction contract based on management's evaluation of the project and the financial strength of the contractor and also requires personal guaranties of payment by the principals of any borrowing entity. At September 30, 2001, approximately $34,203,000 of the Bank's loan portfolio consisted of construction loans.

Consumer Loans

Current regulations permit federal savings institutions to invest up to 35% of their assets in consumer loans. The Bank currently offers a wide variety of consumer loans including secured and unsecured personal loans (such as home improvement loans and loans secured by savings accounts), automobile, boat and other loans. Total consumer loans amounted to approximately $17,455,000 at September 30, 2001.

The Bank markets consumer loans in order to provide a full range of retail banking services to its customers and because of the shorter term and normally higher interest rates on such loans. The Bank's underwriting standards for consumer loans include a determination of the applicant's payment history on other debts and an assessment of his or her ability to meet existing obligations and to make payments on the proposed loan. Loan-to-value, cash equity and debt service-to-income ratios are also generally considered. Risks associated with consumer loans include, but are not limited to, fraud, deteriorated or non-existing collateral, general economic downturn, and customer financial problems.

Commercial Loans

Current regulations authorize federal thrift institutions to make secured and unsecured loans for commercial, corporate, business and agricultural purposes, including issuing letters of credit. The aggregate amount of such loans outstanding generally may not exceed 10% of the institution's assets.

The Bank makes commercial loans primarily on a secured basis. Substantially all of such loans to date have

interest rates which adjust with changes in the prime rate charged by money center banks. The Bank's commercial loans primarily consist of short-term loans for working capital purposes, seasonal loans, lines of credit, accounts receivable loans and inventory loans. The Bank customarily requires personal guaranties of payment by the principals of any borrowing entity and reviews the financial statements and income tax returns of the guarantors generally on an annual basis. At September 30, 2001, the Bank had approximately $12,916, 000 outstanding in commercial loans. Risks associated with these loans can be significant. Risks include, but are not limited to, fraud, bankruptcy, deteriorated or non-existing collateral, general economic downturn, and changes in interest rates.

Loan Solicitation and Processing

The Bank actively solicits mortgage loan applications from existing customers, walk-ins, referrals, builders and real estate brokers. Commercial real estate loan applications are also obtained through direct solicitation.

Detailed loan applications are obtained to determine the borrower's ability to repay, and the more significant items on these applications are verified through the use of credit reports, financial statements and confirmations. After analysis of the loan applications and property or collateral involved, including an appraisal of the property by independent appraisers approved by the Bank's management, the lending decision is made in accordance with the underwriting guidelines of the Bank. With respect to commercial loans, the Bank also reviews the capital adequacy of the business, the ability of the borrower to repay the loan and honor its other obligations, and general economic and industry conditions. All applications for loans greater than $250,000 but less than $500,000 require the approval of the Bank's Loan Committee, which consists of the Bank's president and three outside directors. All loan applications in excess of $500,000 must be approved by the full Board of Directors.

Loan applicants are promptly notified of the decision of the Bank, together with the terms and conditions of the decision. In this regard, the Bank seeks to handle loan processing and origination faster than its competition. If approved, these terms and conditions include the amount of the loan, interest rate basis, amortization term, a brief description of the real estate to be mortgaged to the Bank, notification that insurance coverage must be maintained to protect the Bank's interest and any other special conditions.

It is the Bank's policy to obtain a title insurance policy insuring that the Bank has a valid first lien on the mortgaged real estate and that the property is free of encumbrances. Borrowers are also to obtain paid hazard insurance policies prior to closing and, when the property is in a flood plain as designated by the Department of Housing and Urban Development, paid flood insurance policies. It is the Bank's policy to require flood insurance for the full insurable value of the improvements for any such loan located in a designated flood hazard area. In certain coastal areas, however, there are limits on the amount of insurance available. Substantially all borrowers are also required to advance funds on a monthly basis, together with each payment of principal and interest, to a mortgage escrow account from which the Bank makes disbursements for items such as real estate taxes, hazard insurance premiums and private mortgage insurance premiums.

Loan Originations, Sales and Purchases

It is a policy of the Bank not to originate for its own portfolio any fixed rate residential mortgage loans that exceed 15 years. The Bank instead originates long term fixed rate mortgages to be brokered out to various mortgage lenders. The Bank may sell its commercial real estate and construction loans, generally retaining a percentage of the loans in its own portfolio. Loan sales provide additional funds for lending, generate income for the Bank and generally reduce exposure to interest rate risk. The Bank generally continues to collect payments on the loans and otherwise to service the loans sold. The Bank retains a portion of the interest paid by the borrower on these loans as consideration for its servicing loans sold to others. At September 30, 2001, the Bank was servicing loans for others of approximately $10,856,000.

The Bank has purchased a number of loans in the past, and intends to consider future purchases of residential mortgage loans as market conditions warrant. The Bank has also sold loans as discussed above and, similarly, intends to consider future sales as conditions warrant.

It is the current intention of management to continue offering residential fixed rate mortgage loans through the Bank's brokerage lending arrangement and to continue offering adjustable rate instruments to be held in the Bank's portfolio.

Loan Commitments

Upon loan approval, short-term commitments of 45 days are issued to the applicant and in most cases provide for the loan to be closed at the prevailing rate of interest as of the date of approval.

Loan Origination Fees

The Bank defers and amortizes loan origination fees, net of certain direct origination costs incurred, and recognizes such fees over the life of the related loan as a yield adjustment.

The Bank also receives other fees and charges relating to existing loans along with late charges and fees collected in connection with a change in borrower or other loan modifications.

Delinquencies and Asset Classifications

The Bank's collection procedures provide that when a loan is 15 days past due, the borrower will be contacted by mail and payment requested. If the delinquency continues, subsequent efforts will be made to contact the delinquent borrower. In certain instances, the Bank may modify the loan or grant a limited moratorium on loan payments to enable the borrower to reorganize his or her financial affairs. If the loan continues in a delinquent status for 90 days or more, the Bank generally will initiate foreclosure proceedings, but there is no requirement that the Bank defer foreclosure proceedings or other enforcement action. Any property acquired as the result of foreclosure is classified as real estate acquired in settlement of loans until such time as it is sold or otherwise disposed of by the Bank to recover its investment.

As a measure of the soundness of a thrift institution's loans, federal regulatory authorities have developed the concept of asset classification and have established four categories of problem assets: "Special Mention," "Substandard," "Doubtful" and "Loss". Assets designated Special Mention do not require that a bank take any specific action. For assets classified Substandard or Doubtful, a bank's examiner is authorized to direct the establishment of a general allowance for loan losses based on the assets classified and the overall quality of the bank's asset portfolio. This valuation allowance must be established in accordance with generally accepted accounting principles. For assets or portions of assets classified as loss, a bank is required either to establish specific allowances of 100% of the amount so classified, or to charge off such amount. These specific allowances or charge offs must also be established in accordance with generally accepted accounting principles.

The Bank is responsible for determining the valuation and classification of its assets, subject to review by regulatory authorities. Portions of an asset may be classified in more than one category.

An asset will be designated Special Mention if it does not justify a classification of Substandard but does constitute undue and unwarranted credit risk to the Bank. An asset will be classified Substandard if it is determined to involve a distinct possibility that the Bank may sustain some loss if deficiencies associated with the loan, such as inadequate documentation, are not corrected. An asset will be classified as Doubtful if full collection is highly questionable or improbable. An asset will be classified as Loss if it is considered uncollectible, even if a partial recovery may be expected in the future.

The Bank closely monitors its classified loans and actively attempts to dispose of real estate acquired in settlement of loans. Real estate acquired through foreclosure is appraised when acquired and is recorded at the lower of cost or fair market value.

At September 30, 2001, the following amounts of loans were classified as follows:

|Special Mention | $10,493,000
|--------------- | -----------
|Substandard     | 6,665,000  
|Doubtful        | -          
|Loss            | -          
|                | $17,158,000

Non-accrual, Past Due and Restructured Loans

The Bank has approximately $3,541,000 of loans in non-accrual status at September 30, 2001. The Bank had approximately $3,720,000 of loans in non-accrual status at September 30, 2000. The Bank has had no restructured loans. ("Management's Discussion and Analysis of Financial Condition and Results of Operations - Provision for Loan Losses" in the Company's Annual Report is incorporated by reference herein.) Had all non-accrual loans at September 30, 2001 actually accrued interest for the full fiscal year, approximately $183,000 of additional interest income would have been added to fiscal earnings.

Accrual of interest is discontinued when either principal or interest become 90 days past due unless, in management's opinion, the loan is well secured and in the process of collection.

Allowance for Loan Losses

For a detailed analysis of the allowance for loan losses, Management's Discussion and Analysis of Financial Condition and Results of Operations - Provision for Loan Losses is incorporated by reference from the Annual Report to Shareholders herein.

The Company has allocated the allowance for loan losses according to the amount deemed to be reasonably necessary to provide for losses being incurred within the categories of loans set forth in the table below. This allocation is based on management's evaluation of the loan portfolio under current economic conditions, past loan loss experience, adequacy and nature of collateral, and such factors which, in the judgment of management, deserve recognition in estimating loan losses. Regulatory agencies, as an integral part of their examination process, periodically review the Company's allowances for probable losses on loans and real estate acquired through foreclosure and other non-performing assets. Such agencies may require the Company to make additions to the allowance based on their judgments about information available to them at the time of their examination. Because the allocation is based on estimates and subjective judgment, it is not necessarily indicative of the specific amounts or loan categories in which charge-offs may occur.

The allocation of the allowance for probable loan losses to the various loan categories and the ratio of each loan category to total loans outstanding at September 30, 2001 and 2000 are presented in the following table.

|                                          | September 30,
|----------------------------------------- | -------------
|                                          | 2001         
|(In Thousands)                            | Amount       
|Balance at the end of year applicable to: |              
|Commercial, financial, and agricultural   | $ 185        
|Real estate-construction                  | 427          
|Real estate-mortgage                      | 1,543        
|Consumer                                  | 218          
|Unallocated                               | 41           
|                                          | $2,414       

The percentage columns are the percentage of total loans in each category to total loans.

Loan Repayments

In addition to regularly scheduled repayments, loans are prepaid in full as properties are sold, or are refinanced by the Bank or other lenders, or are satisfied in full by the borrower. Loan repayments constitute a major source of funding for the Bank.

Other

The Company has no foreign operations and, accordingly, there are no assets or liabilities attributed to foreign operations.

At September 30, 2001, the Company had no concentration of loans exceeding 10% of total loans to borrowers engaged in any single industry.

Investment Activities

The Bank is required under federal regulations to maintain a minimum amount of liquid assets and is also permitted to make certain other securities investments. It is the intention of management to hold securities with short maturities in the Bank's investment portfolio in order to enable the Bank to match more closely the interest rate sensitivities of its assets and liabilities. All of the Bank's investments are subject to interest rate risk. Since some securities have fixed interest rates, as interest rates rise the value of the securities falls and as rates decline the value increases. In addition, mortgage-backed securities are subject to prepayment risk. As rates fall, prepayments increase and the amount of the security earning the coupon rate declines.

Investment decisions are made by senior officers of the Bank. The actions of the officers are within policies established by the Board of Directors. At September 30, 2001 the investment portfolio totaled approximately $25,951,000.

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



|Investment Security Analysis       
|-----------------------------------
|                                   
|September 30, 2001:                
|Investment securities:             
|Mortgage-backed securities and SBAs
|State and municipal bonds          
|                                   
|                                   
|                                   
|September 30, 2000:                
|Investment securities:             
|Mortgage-backed securities and SBAs
|State and municipal bonds          
|                                   
|                                   
|                                   
|September 30, 1999:                
|Investment securities:             
|Mortgage-backed securities and SBAs
|State and municipal bonds          
|                                   

A summary of investment and mortgage-backed securities by maturities as of September 30, 2001 follows:



|                               | Amortized Cost      | Weighted Average Yield | Fair Value      
|------------------------------ | ------------------- | ---------------------- | ----------------
|                               |                     |                        |                 
|Investment Securities:         |                     |                        |                 
|Within 1 year                  | $                 - | 0.00%                  | $              -
|After 1 year through 5 years   | 1,252,396           | 5.14%                  | 1,292,604       
|After 5 years through 10 years | 5,064,156           | 5.63%                  | 5,132,512       
|After 10 years                 | 19,634,125          | 7.76%                  | 2,033,946       
|                               | $ 25,950,677        | 6.58%                  | $ 8,459,062     

(1) Yields on tax-exempt securities are computed on tax equivalent basis.

INTEREST DIFFERENTIAL

The following table describes the extent to which changes in volume of interest-earning assets and interest-bearing liabilities and changes in interest rates have affected the Bank's interest income and expense during the periods indicated. For each category of interest-earning asset and interest-bearing liability, information is provided on changes attributable to (a) change in volume (change in volume multiplied by old rate) and (b) change in rate (change in rate multiplied by old volume). The net change attributable to the combined impact of volume and rate has been allocated to both components in proportion to the relationship of the absolute dollar amounts of the change in each.



|                                                     | Year Ended September 30, 2001 vs. Year Ended September 30, 2000
|---------------------------------------------------- | ---------------------------------------------------------------
|(In Thousands)                                       | Total                                                          
|Interest income:                                     |                                                                
|Loans                                                |                                                                
|Investment securities                                | $ (348)                                                        
|Interest-bearing deposits in other banks             | 605                                                            
|Total interest-earning assets                        | 63                                                             
|                                                     | 320                                                            
|Interest expense:                                    |                                                                
|Deposits                                             | 883                                                            
|Federal Home Loan Bank advances and other borrowings | (119)                                                          
|Total interest-bearing liabilities                   | 764                                                            
|Net interest income                                  | $ (444)                                                        
|                                                     |                                                                
|                                                     |                                                                
|                                                     | Year Ended September 30, 2000 vs. Year Ended September 30, 1999
|(In Thousands)                                       | Total                                                          
|Interest income:                                     |                                                                
|Loans                                                |                                                                
|Investment securities                                | $ 3,693                                                        
|Interest-bearing deposits in other banks             | 79                                                             
|Total interest-earning assets                        | 12                                                             
|                                                     | 3,784                                                          
|Interest expense:                                    |                                                                
|Deposits                                             | 1,639                                                          
|Federal Home Loan Bank advances and other borrowings | (8,219)                                                        
|Total interest-bearing liabilities                   | (6,580)                                                        
|Net interest income                                  | $ 10,364                                                       

Retail Banking Activities and Sources of Funds

General

The Bank's retail banking activities consist of attracting deposits and making consumer and commercial loans. A principal objective of the Bank is to establish a total banking relationship, including a deposit relationship as well as a lending relationship, between the Bank and the customer.

Savings accounts and other types of deposits generated by the Bank's retail banking division are the primary source of the Bank's funds for use in lending and for other general business purposes. In addition to savings accounts, the Bank derives funds from loan repayments, FHLB advances, other borrowings and operations. Loan repayments are a relatively stable source of funds while deposit inflows and outflows vary widely and are influenced by prevailing interest rates and money market conditions. Borrowings may be used on a short-term basis to compensate for reductions in normal sources of funds such as deposit inflows at less than projected levels and may be used on a longer-term basis to support expanded lending activities. The Bank's sources of borrowings have been advances from the FHLB of Atlanta, obligations under repurchase agreements, and Federal funds purchased.

Deposits

Savings deposits in the Bank at September 30, 2001 and 2000 were represented by the various types of programs described as follows:



|DEPOSITS AT SEPTEMBER 30, 2001  
|--------------------------------
|Type of Account                 
|                                
|Easy Checking                   
|Commercial Checking             
|NOW Accounts                    
|Super NOW and MMDA              
|Statement Savings               
|                                
|Certificate of deposit accounts:
|Jumbo certificates:             
|Other time deposits:            
|3 months                        
|6 months                        
|1 year                          
|1&1/2 years                     
|2 years                         
|2&1/2 years                     
|3 years                         
|3&1/2 years                     
|4 years                         
|5 years                         
|18 month IRA                    
|Other                           
|                                

Deposits at September 30, 2000 and 1999 are represented on the following pages.



|DEPOSITS AT SEPTEMBER 30, 2000  
|--------------------------------
|Type of Account                 
|                                
|Easy Checking                   
|Commercial Checking             
|NOW Accounts                    
|Super NOW and MMDA              
|Statement Savings               
|                                
|Certificate of deposit accounts:
|Jumbo certificates:             
|Other time deposits:            
|3 months                        
|6 months                        
|1 year                          
|1&1/2 years                     
|2 years                         
|2&1/2 years                     
|3 years                         
|3&1/2 years                     
|4 years                         
|5 years                         
|18 month IRA                    
|Other                           
|                                





|DEPOSITS AT SEPTEMBER 30, 1999  
|--------------------------------
|Type of Account                 
|                                
|Easy Checking                   
|Commercial Checking             
|NOW Accounts                    
|Super NOW and MMDA              
|Statement Savings               
|                                
|Certificate of deposit accounts:
|Jumbo certificates:             
|Other time deposits:            
|3 months                        
|6 months                        
|1 year                          
|1&1/2 years                     
|2 years                         
|2&1/2 years                     
|3 years                         
|3&1/2 years                     
|4 years                         
|5 years                         
|18 month IRA                    
|Other                           
|                                



Bank has a number of different programs designed to attract both short-term and long-term savings of the general public. The programs include commercial demand deposits (checking), NOW accounts, money market deposits accounts (MMDA), traditional passbook savings, time deposits in a minimum amount of $100,000 (Jumbo Certificates), other certificates of deposits and individual retirement accounts (IRAs).

The minimum amount required to open a certificate of deposit for other than retirement accounts ranges from $500 to $100,000, depending on the type of deposit. Rates on certificates of deposit are determined weekly by the Bank, based upon local market rates, national money market rates and yields on assets of the same maturity.

The variety of deposit accounts offered by the Bank allows it to be competitive in obtaining new funds, although the threat of disintermediation (the flow of funds away from the Bank into direct investment vehicles, such as mutual funds and government and corporate securities) still exists. The ability of the Bank to attract and retain deposits and the Bank's cost of funds have been, and will continue to be, significantly affected by capital and money market conditions.

The Bank attempts to control the flow of deposits by pricing its accounts to remain generally competitive with other financial institutions in its market area.

The Bank has generated Jumbo Certificates from both local individuals and businesses and from out-of-town individuals and businesses who have ties to its market area. In addition, the Bank accepts public deposits. The Bank responds to requests for rate information but does not accept deposits for which a broker's commission must be paid. As with other deposits, rates on Jumbo Certificates are set in a manner to be competitive in the Bank's market area.

The following table sets forth the composition of deposits, excluding accrued interest payable, by type and interest rate at the dates indicated.



|                                             | September 30,
|-------------------------------------------- | -------------
|                                             | 2001         
|Access accounts:                             |              
|Commercial checking - 0.00%                  | $     28,450 
|NOW accounts - 1.25%                         | 24,091       
|Money Market deposit account - variable rate | 10,658       
|Statement savings - 2.30%                    | 12,352       
|                                             |              
|Certificates of deposits:                    |              
|2.75% - 5.00%                                | 36,848       
|5.01% - 7.00%                                | 99,296       
|7.01% - 9.00%                                | 7,293        
|Subtotal                                     | 218,983      
|Accrued interest                             | 641          
|Total                                        | $    219,624 





|TIME DEPOSIT MATURITIES  
|-------------------------
|Balances at September 30,
|Interest Rates           
|                         
|2.75% - 5.00%            
|5.01% - 7.00%            
|7.01% - 9.00%            
|                         





|JUMBO CD MATURITIES 
|--------------------
|Maturity            
|                    
|Three months or less
|Three to six months 
|Six to twelve months
|Over twelve months  
|Total               





|AVERAGE DEPOSITS BY TYPE     
|-----------------------------
|September 30,                
|                             
|                             
|                             
|Non-interest bearing deposits
|NOW's                        
|MMDA's                       
|Savings                      
|Time Deposits                
|Total Average Deposits       

Borrowings

Savings deposits are the primary source of funds for the Bank's lending and investment activities and for its general business purposes. The Bank has, however, used advances from the FHLB of Atlanta and other borrowings to supplement its supply of funds available for lending. Advances from the FHLB are typically secured by a portion of the Bank's first mortgage loans. A summary of the Bank's borrowings from the FHLB is set forth below:



|                                      | 2001        | 2000                  
|------------------------------------- | ----------- | ----------------------
|Due During Year Ending 
September 30, | Amount      | Weighted 
Average Rate
|2002                                  | 500,000     | 7.90%                 
|2006                                  | 1,000,000   | 5.90%                 
|2008                                  | 2,000,000   | 5.51%                 
|                                      | $ 3,500,000 | 5.96%                 

The FHLB System functions as a central reserve bank providing credit for savings institutions. As a member of the FHLB of Atlanta, the Bank is required to own capital stock in the FHLB of Atlanta and is authorized to apply for advances on the security of its home mortgage loans and other assets (primarily, securities which are obligations of, or are guaranteed by, the United States) provided certain standards related to creditworthiness have been met.

The FHLB offers several different credit programs each with its own interest rate and term. It prescribes the acceptable uses for advances as well as size limitations. The FHLB periodically reviews its credit limitations and standards. Under its current policies, the FHLB limits its advances based on a member institution's net worth or the FHLB's assessment of the institution's creditworthiness. The following table sets forth certain information regarding borrowings by the Bank at the end of and during the periods indicated:

|FEDERAL HOME LOAN BANK ADVANCES                              
|-------------------------------------------------------------
|                                                             
|                                                             
|Balance outstanding                                          
|Weighted average rate                                        
|Maximum amount of short-term borrowings at any month end     
|Approximate average short-term borrowings outstanding        
|Approximate weighted average paid on short-term borrowings(1)

(1) The average method used is the average end of month totals.

First Georgia Holding, Inc. obtained a line of credit for up to $3,000,000 from the Bankers Bank in March 2000. The interest is payable quarterly at Prime minus 50 basis points (5.5% at September 30, 2001). All of the issued and outstanding shares of capital stock of First Georgia Bank are pledged as collateral for this line of credit. As of September 30, 2001, the Company had borrowed $2,000,000 against this line of credit which matures on March 31, 2002 with an option to extend until March 31, 2012. The Bank did not draw any additional funds on this line of credit during the period ended September 30, 2001. The maximum amount of borrowings at any month end was $2,000,000. The following table sets forth information regarding the Bankers Bank advance at the end of and during the periods indicated.

|Bankers Bank Advance                                    
|--------------------------------------------------------
|                                                        
|Balance outstanding                                     
|Weighted average rate                                   
|Maximum amount of short-term borrowings at any month end
|Approximate average borrowings outstanding              
|Approximate weighted average paid on borrowings(1)      

(1) The average method used is the average end of month totals.

Employees

At September 30, 2001, the Bank employed 136 full-time equivalent employees. Management considers relations with its employees to be excellent. The Bank currently maintains a comprehensive employee benefits program including, among other benefits, hospitalization and major medical insurance, life insurance, dental insurance, long term disability, a 401(k) plan and educational assistance. Management considers these benefits to be generally competitive with those offered by competing financial institutions in its market area. The Bank's employees are not represented by any collective bargaining group.

Competition

The Bank's primary market area is southeastern Georgia. The Bank competes for loans primarily through referrals and quality of the services it provides to borrowers and home builders. It competes for savings by offering depositors a wide variety of savings accounts, checking accounts, NOW accounts, convenient office locations, tax-deferred retirement programs and other services.

Federal deregulation of financial institutions has contributed to the dramatic increase in competition for savings dollars between savings institutions and other types of investment vehicles, such as money market mutual funds, U.S. Treasury securities and municipal bonds, as well as an increase in competition with commercial banks for loans, checking accounts and other types of financial services. In addition, large conglomerates and investment banking firms have entered the market for financial services. Accordingly, the Bank, like other institutions, faces increased competition in the future in attracting and retaining customers for the services it offers.

Forward Looking Statements

This Annual Report on Form 10-KSB, other periodic reports filed by the Company under the Securities Exchange Act of 1934, as amended, and any other written or oral statements made by or on behalf of the Company may include forward looking statements which reflect the Company's current views with respect to future events and financial performance. Such forward looking statements are based on general assumptions and are subject to various risks, uncertainties and other factors that may cause actual results to differ materially from the views, beliefs and projections expressed in such statements. These risks, uncertainties and other factors include, but are not limited to:

(a) Possible changes in economic and business conditions that may affect the prevailing interest rates, the prevailing rates of inflation or the amount of growth, stagnation or recession in the global, U.S. and southeastern U.S. economies, the value of investments, collectibility of loans, and the profitability of business entities;

(b) Possible changes in monetary and fiscal policies, laws and regulations, and other activities of governments, agencies and similar organizations;

(c) The effects of easing of restrictions on participants in the financial services industry, such as banks, securities brokers and dealers, investment companies and finance companies, and attendant changes in patterns and effects of competition in the financial services industry.

(d) The cost and other effects of legal and administrative cases and proceedings, claims, settlements and judgments;

(e) The ability of the Company to achieve the earnings expectations related to the continued growth of the markets in which the Company operates consistent with recent historical experience, and the Company's ability to expand into new markets and to maintain profit margins in the face of pricing pressures.

The words "believe," "expect," "anticipate," "project" and similar expressions signify forward looking statements. Readers are cautioned not to place undue reliance on any forward looking statements made by or on behalf of the Company. Any such statements speak only as of the date the statement was made. The Company undertakes no obligation to update or revise any forward looking statements.

SUPERVISION AND REGULATION

Savings and loan holding companies and federal savings banks are extensively regulated under both Federal and state law. The following is a brief summary of certain statutes and rules and regulations that affect or may affect the Company and the Bank. This summary is qualified in its entirety by reference to the particular statute and regulatory provision referred to below and is not intended to be an exhaustive description of the statutes or regulations applicable to the business of the Company and the Bank. Supervision, regulation and examination of the Company and the Bank by the regulatory agencies are intended primarily for the protection of depositors rather than shareholders of the Company. The terms savings association, federal savings bank and thrift are used interchangeably in this section.

Savings and Loan Holding Company Regulation

The Company is a registered holding company under both the Savings and Loan Holding Company Act (the "SLHCA") which is set forth in Section 10 of the Home Owners Loan Act ("HOLA") and the Financial Institutions Code of Georgia ("FICG"). The Company is regulated under these acts by the Office of Thrift Supervision (the "OTS") and by the Department of Banking and Finance (the "Georgia Department"), respectively. As a savings and loan holding company, the Company is required to file an annual report with the OTS, as well as any additional information the OTS may require pursuant to the SLHCA. The OTS also conducts examinations of the Company and each of its subsidiaries.

Savings and loan holding companies and their non-bank subsidiaries are prohibited from engaging in any activity or rendering any services on behalf of their savings institution subsidiaries that the savings institution subsidiaries are prohibited from engaging in directly. This restriction is designed to prevent the use of holding company affiliates to evade requirements of the SLHCA that are designed to protect the holding company's savings institutions. However, if the holding company owns only one insured institution (a unitary holding company) and was in existence prior to May 4, 1999, the SLHCA and the FICG impose no such restrictions on the activities of its non-bank subsidies, provided that the lone savings institution satisfies the qualified thrift lender test (discussed below). Moreover, a unitary holding company that satisfies these requirements is not restricted to any statutorily prescribed list of permissible activities. However, the Financial Services Modernization Act of 1999 provides that, while existing unitary holding companies retain these unrestricted powers, if the unitary is then acquired by another party, its powers are restricted to those permitted for financial holding companies under the Act.

The SLHCA and the FICG make it unlawful for any savings and loan holding company, directly or indirectly, or through one or more subsidiaries or one or more transactions, to acquire control of another savings association or another savings and loan holding company without prior approval from the OTS and the Georgia Department, respectively. The acquisition of more than 25% of any class of voting stock of a savings association or holding company is deemed to be conclusive evidence of control. Savings and loan holding companies are allowed to acquire or to retain as much as 5% of the voting shares of an unaffiliated savings institution or savings and loan holding company without regulatory approval. On December 7, 2000, Congress passed the American Homeownership and Economic Opportunity Act of 2000 which permits savings and loan holding companies to acquire or to retain a 5% to 25% non-controlling interest in an unaffiliated savings institution or savings and loan holding company with prior regulatory approval.

An acquisition by merger, consolidation or purchase of assets of a savings institution or holding company or of substantially all of the assets of a savings institution or holding company is also prohibited without prior OTS or Georgia Department approval. When considering an application for such an acquisition, the OTS and the Georgia Department take into consideration the financial and managerial resources and future prospects of the prospective acquiring company and the institution involved. This includes consideration of the competence, experience and integrity of the officers, directors and principal shareholders of the acquiring company and savings institution. In addition, the OTS and the Georgia Department consider the effect of the acquisition on the institution, the insurance risk to the Savings Association Insurance Fund ("SAIF") and the convenience and needs of the community to be served.

The OTS may not approve an acquisition that would result in the formation of certain types of interstate holding company networks. The OTS is precluded from approving an acquisition that would result in the formation of a multiple holding company controlling institutions in more than one state unless the acquiring company or one of its savings institution subsidiaries is authorized to acquire control of an institution or to operate an office in the additional state pursuant to a supervisory acquisition authorized under Section 13(k) of the Federal Deposit Insurance Act or unless the statutes of the state in which the institution to be acquired is located permits such an acquisition.

Bank Regulation

General.

The Bank is also insured and regulated by the FDIC. The major functions of the FDIC with respect to insured federal savings banks include 1) paying depositors (to the extent provided by law) in the event an insured bank is closed without adequately providing for depositors and 2) preventing the development and use of unsound and unsafe banking practices.

Subsidiary institutions of a savings and loan holding company, such as the Bank, are subject to certain restrictions imposed by the Federal Reserve Act on any extension of credit to the holding company or any of its other subsidiaries, on investment in the stock or other securities thereof, and on the taking of such stock or securities as collateral for loans to any borrower. In addition, a holding company and its subsidiaries are prohibited from engaging in certain tying arrangements in connection with any extension of credit or provision of any property or services.

Capital Requirements.

In determining total risk-weighted assets for purposes of the risk-based requirement, (i) each off-balance sheet asset must be converted to its on-balance sheet credit equivalent amount by multiplying the face amount of each such item by a credit conversion factor ranging from 0% to 100% (depending upon the nature of the asset), (ii) the credit equivalent amount of each off-balance sheet asset and each on-balance sheet asset must be multiplied by a risk factor ranging from 0% to 200% (again depending upon the nature of the asset) and (iii) the resulting amounts are added together and constitute total risk-weighted assets. "Total capital," for purposes of the risk-based capital requirement equals the sum of core capital plus supplementary capital (which, as defined, includes the sum of, among other items, perpetual preferred stock not counted as core capital, limited life preferred stock, subordinated debt, and general loan and lease loss allowances up to 1.25% of risk-weighted assets) less certain deductions. The amount of supplementary capital that may be counted towards satisfaction of the total capital requirement may not exceed 100% of core capital, and OTS regulations require the maintenance of a minimum ratio of core capital to total risk-weighted assets of 4%.

OTS regulations also include an interest-rate risk in the risk-based capital requirement. Under this regulation, an institution is considered to have excess interest rate-risk if, based upon a 200-basis point change in market interest rates, the market value of an institution's capital changes by more than 2%. This requirement does not have any material effect on the ability of the Bank to meet the risk-based capital requirement. The OTS also revised its risk-based capital standards to ensure that its standards provide adequately for concentration of credit risk, risk from nontraditional activities and actual performance and expected risk of loss on multi-family mortgages.

Capital requirements higher than the generally applicable minimum requirement may be established for a particular savings association if the OTS determines that the institution's capital was or may become inadequate in view of its particular circumstances.

Additionally, the Georgia Department requires that savings and loan holding companies, such as the Company, must maintain a 5% Tier 1 leverage ratio on a consolidated basis.

Prompt Corrective Action.

An institution that is categorized as undercapitalized, significantly undercapitalized, or critically undercapitalized is required to submit an acceptable capital restoration plan to its appropriate federal banking agency. A holding company must guarantee that a subsidiary depository institution meets its capital restoration plan, subject to certain limitations. The controlling holding company's obligation to fund a capital restoration plan is limited to the lesser of 5% of an undercapitalized subsidiary's assets or the amount required to meet regulatory capital requirements. An undercapitalized institution is also generally prohibited from increasing its average total assets, making acquisitions, establishing any branches or engaging in any new line of business, except under an accepted capital restoration plan or with regulatory approval. An institution may be downgraded to a lower capital category based on supervisory factors other than capital.

FDIC Insurance Assessments.

In addition, effective January 1, 1997, the FDIC imposed assessments to help pay off the $780 million in annual interest payments on the $8 billion Financing Corporation bonds issued in the late 1980s as part of the government rescue of the thrift industry. The assessment is calculated at a rate of 3.7 cents per $100 (the same assessment rate that is imposed on commercial banks).

The FDIC may terminate its insurance of deposits if it finds 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.

Since the Bank's aggregate assets are not ore than $250,000, under the Gramm-Leech Bliley Act, we are subject to a CRA examination only once every 60 months if we receive an outstanding rating and once every 48 months if our rating is less than satisfactory.

Capital Distributions.

An institution that either before or after a proposed capital distribution fails to meet its then applicable minimum capital requirement or that has been notified that it needs more than normal supervision may not make any capital distributions without the prior written approval of the OTS. In addition, the OTS may prohibit a proposed capital distribution, which would otherwise be permitted by the regulation, if the OTS determines that such distribution would constitute an unsafe or unsound practice.

Equity Investments.

Qualified Thrift Lender Requirement.

OTS regulations provide that any savings association that fails to meet the definition of a QTL must either convert to a national bank charter or limit its future investments and activities (including branching and payments of dividends) to those permitted for both savings associations and national banks. Further, within one year of the loss of QTL status, a holding company of a savings association that does not convert to a bank charter must register as a bank holding company and will be subject to all statutes applicable to bank holding companies. In order for the Bank to exercise the powers granted to federally chartered savings associations and for the Company to retain the power of a unitary holding company, the Bank must meet the definition of a QTL.

Loans to One Borrower Limitations.

Commercial Real Property Loans.

Federal Home Loan Bank System.

Federal Reserve System.

Savings institutions also have the authority to borrow from the Federal Reserve "discount window." Federal Reserve Board regulations, however, require savings associations to exhaust all FHLB sources before borrowing from a Federal Reserve bank.

Other Regulations.

- The federal Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers;
- The Home Mortgage Disclosure Act of 1975, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves;
- The Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit;
- The Fair Credit Reporting Act of 1978, governing the use and provision of information to credit reporting agencies;
- The Fair Debt Collection Act, governing the manner in which consumer debts may be collected by collection agencies; and
- The rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws.

The deposit operations of the Bank are subject to:

- The Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; and
- The Electronic Funds transfer Act and Regulation E issued by the Federal Reserve to implement that act, which governs automatic deposits to and withdrawals from deposit accounts and customers' rights and liabilities arising from the use of automated teller machines and other electronic banking services.

Effect of Governmental Monetary Polices.

Transactions with Affiliates Restrictions

The Company and the Bank are subject to the provisions of Section 23A of the Federal Reserve Act. Section 23A places limits on:

- The amount of loans or extensions of credit to affiliates;

The aggregate of all of the above transactions is limited in amount, as to any one affiliate, to 10% of a bank's capital and surplus and, as to all affiliates combined, to 20% of a bank's capital and surplus. In addition to the limitation on the amount of these transactions, each of the above transactions must also meet specified collateral requirements. The Company must also comply with certain provisions designed to avoid the taking of low-quality assets.

The Company and the Bank are also subject to the provisions of Section 23B of the Federal Reserve Act which, among other things, prohibits an institution from engaging in the above transactions with affiliates unless the transactions are on terms substantially the same, or at least as favorable to the institution or its subsidiaries, as those prevailing at the time for comparable transactions with nonaffiliated companies.

The Bank is also subject to restrictions on extensions of credit to its executive officers, directors, certain principal shareholders and their related interests. These extensions of credit (1) must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with third parties, and (2) must not involve more than the normal risk of repayment or present other unfavorable features.

The Company files all reports with the Securities and Exchange Commission under the Securities Act of 1933. This Form 10-KSB and any other report filed are a matter of public record and may be read or copied by contacting the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. These documents, along with reports, proxy and information statements may also be obtained by visiting the SEC online at http://www.sec.gov.

Proposed Legislation and Regulatory Action

New regulations and statutes are regularly proposed that contain wide-ranging proposals for altering the structures, regulations and competitive relationships of the nation's financial institutions. The Company cannot predict whether or in what form any proposed regulation or statute will be adopted or the extent to which its business may be affected by any new regulation or statute. Legislation that would eliminate the federal savings bank charter is under discussion. If such legislation is enacted, the Bank would be required to convert its federal savings bank charter to either a national bank charter or to a state depository institution charter. Various legislative proposals also may result in the restructuring of federal regulatory oversight, including, for example, consolidation of the OTS into another agency, or creation of a new Federal banking agency to replace the various such agencies which presently exist. The Bank is unable to predict whether such legislation will be enacted or, if enacted, whether it will contain relief as to bad debt deductions previously taken.

Item 2. DESCRIPTION OF PROPERTIES

The executive office of the Company and Bank is located at 1703 Gloucester Street, Brunswick, Georgia 31520, and its telephone number at that office is (912) 267-7283. The Bank also has six full-service branch offices. The following table sets forth the addresses of the aforementioned offices, their net book value and the expiration dates of the leases applicable to the offices not owned by the Bank.

|Office                                                                 | Lease Expiration Date | Net Book Value
|---------------------------------------------------------------------- | --------------------- | --------------
|Executive Office                                                       |                       |               
|1703 Gloucester Street Brunswick, GA 31520                             | owned                 | $1,014,305    
|Full Service Offices                                                   |                       |               
|Altama Avenue Office 4510 Altama Avenue Brunswick, GA 31520            | 7/28/08               | $172,959      
|Demere Village 2461 Demere Road St. Simons Island, GA 31522            | owned                 | $264,644      
|North Brunswick Office 2001 Commercial Drive South Brunswick, GA 31525 | owned                 | $446,773      
|Colonial Mall Office 109 Scranton Connector Brunswick, GA              | owned                 | $835,101      
|Waycross 1010 Plant Avenue Waycross, GA31501                           | Owned                 | $158,193      

Refer to the Lending Activities section of Item 1 contained herein for a description of investment policies related to investments in real estate mortgages.

Item 3. LEGAL PROCEEDINGS

Neither the Company nor the Bank is a party to, nor is any of their property the subject of, any material pending legal proceedings, other than ordinary routine litigation incidental to their business, and no such proceedings are known to be contemplated by governmental authorities.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable

PART II

Item 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Information concerning common stock, shareholders and dividends appears in the Annual Report under the heading "Shareholder Information" and is incorporated by reference herein.

Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Management's discussion and analysis of the Company's financial condition and its results of operations appears in the Annual Report under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" and is incorporated by reference herein.

Item 7. FINANCIAL STATEMENTS

The consolidated financial statements of the Company and the Bank as of September 30, 2001 and 2000 and for each of the years in the three year periods ended September 30, 2001, 2000, and 1999, and the report issued thereon by the Company's independent certified public accountant, appear in the Annual Report and are incorporated herein by reference.

Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

PART III

Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; Compliance with Section 16(a) of the Exchange Act

Information concerning the Company's and the Bank's Directors and Executive Officers appears in the Proxy Statement under the heading "Election of Directors", "Executive Officers", "Ownership of Stock", and "Compliance with Section 16(a) of the Securities Exchange Act of 1934" and is incorporated by reference herein.

Item 10. EXECUTIVE COMPENSATION

Information concerning the compensation of the Company's and the Bank's Management appears in the Proxy Statement under the heading "Executive Compensation" and is incorporated by reference herein.

Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information concerning beneficial owners of more than 5% of the Company's common stock appears in the Proxy Statement under the heading "Ownership of Stock - Principal Holders of Stock" and is incorporated by reference herein.

Information concerning the common stock owned by the Company's management appears in the Proxy Statement under the heading "Ownership of Stock - Stock Owned by Management" and is incorporated by reference herein.

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information concerning certain relationships and related transactions appears in the Proxy Statement under the heading "Executive Compensation - Certain Other Transactions" and is incorporated by reference herein.

Item 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

The list of documents set forth on the Exhibit Index that immediately follows the last signature page hereof is incorporated herein by reference, and such documents are filed as exhibits to this report on Form 10-KSB.

(b) Reports on Form 8-K:

Form 8-K dated November 27, 2000 reporting First Georgia Holding, Inc. annual earnings for the period ended September 30, 2000 and the increase in provision for loan losses for the same period.

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FIRST GEORGIA HOLDING, INC.

(Registrant)

BY: /s/Henry S. Bishop

President

Date:  December 17, 2001

POWER OF ATTORNEY

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

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



|Signatures             | Title                                                                | Date             
|---------------------- | -------------------------------------------------------------------- | -----------------
|/s/ Henry S. Bishop    | President and Director (principal executive officer)                 | December 17, 2001
|/s/ B.W. Bowie         | Director                                                             | December 17, 2001
|/s/ M. Frank Deloach   | Director                                                             | December 17, 2001
|/s/ Terry Driggers     | Director                                                             | December 17, 2001
|/s/ Roy K. Hodnett     | Director                                                             | December 17, 2001
|/s/ E. Raymond Mock    | Director                                                             | December 17, 2001
|/s/ James D. Moore     | Director                                                             | December 17, 2001
|/s/ D. Lamont Shell    | Director                                                             | December 17, 2001
|/s/ G.F. Coolidge, III | Chief Operating Officer (principal financial and accounting officer) | December 17, 2001





|EXHIBIT INDEX
|-------------
|Exhibit No.  
|3.1          
|3.2          
|*10.1        
|*10.2        
|*10.3        
|*10.4        
|*10.5        
|*10.6        
|13           
|21           
|23           
|24           



EXHIBIT 13

FIRST GEORGIA HOLDING, INC.

First Georgia:

Its Mission and Markets

First Georgia Holding, Inc. owns 100% of the stock of First Georgia Bank, F.S.B. The Bank is federally chartered and began operations in January 1984. First Georgia develops and provides a full range of financial services encompassing retail banking, real estate, commercial and consumer lending, and a host of related financial products. The Bank currently operates eight full service offices in three Georgia counties.

First Georgia's PRIMARY MISSION is to maximize stockholder value in a prudent manner. We will concentrate on the following principles.

We will maintain high levels of asset quality through conservative lending policies, a vigorous comprehensive credit administration system and a diversified portfolio of earning assets. Interest rate risk will be thoroughly evaluated and controlled.

Our long-term goals for return on equity and assets will be set at the upper levels of peer bank comparisons. We will strive to maintain a strong capital base supported by adequate loan loss reserves.

We will continue to attract and retain exceptional people. We will deliver the best quality customer service available in the banking industry. This high level of personal service is what separates us from our competitors.

Our officers and employees will be encouraged to provide leadership and support in civic and economic development activities. We will also strive to assess and serve the credit needs of each community in which we are located.

We are committed to the overall success of First Georgia. The proper implementation of these principles will continue to maximize the value of the Company.

TABLE OF CONTENTS



|PRESIDENT'S MESSAGE                                                                    | 1 
|-------------------------------------------------------------------------------------- | --
|INDEPENDENT AUDITORS' REPORT                                                           | 3 
|CONSOLIDATED FINANCIAL STATEMENTS                                                      | 4 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                             | 9 
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                             | 28
|MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
CONDITION AND RESULTS OF OPERATIONS | 29
|DIRECTORS AND OFFICERS                                                                 | 42



PRESIDENT'S MESSAGE

Dear Stockholders:

I am proud to report that our Company remained strong in 2001 despite the uncertain economic environment. The events of September 11, 2001 changed all of our lives forever and accelerated the slow-down of an already declining economy. However, thanks to the hard work of our employees and the loyalty of our customers, the Bank has come through this uncertain time in excellent condition and your investment in our Company remains stable.

Net Income for the year ended September 30, 2001 was $2,007,786 which represents and increase of $576,000 or 40% over the previous year. Net Income per share increased from $.20 per share to $.26 per share.

Total assets grew to a record high of $245,468,000 at September 30, 2001 compared to $239,185,203 at September 30, 2000. This represents an increase of $6,283,000. However, due to a decrease in loan demand, total loans decreased by$6,118,000 at September 30, 2001. Our asset quality remains a high priority and we believe it remains strong.

We continue to be excited about our position in our market place. First Georgia is attracting new relationships daily that want and need a community bank such as ours to service their banking needs. Our deposit market share has grown to be one of the leaders in Glynn County and our valuable employees count customer service as their top priority.

Our Internet banking service continues to attract many customers, as it is one of the 'premier' Internet banking services in our market place.

We look forward to the upcoming year with cautious optimism. As always, we extend our sincere gratitude and appreciation for your support,

Sincerely,

/s/ Henry S. Bishop

Chairman, President and CEO

FIRST GEORGIA HOLDING, INC.

CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2001 and 2000 (With Independent Auditor's Report Thereon)



The Board of Directors and Stockholders

First Georgia Holding, Inc.

Brunswick, Georgia

We have audited the accompanying consolidated balance sheets of First Georgia Holding, Inc. and subsidiary as of September 30, 2001 and 2000, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended September 30, 2001. These consolidated 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 auditing standards generally accepted in the United States of America. 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, such consolidated financial statements present fairly, in all material respects, the financial position of the companies at September 30, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended September 30, 2001 in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP

Certified Public Accountants

Jacksonville, Florida

November 20, 2001

|CONSOLIDATED BALANCE SHEETS               
|------------------------------------------
|First Georgia Holding, Inc. and subsidiary

|Assets                                                             | September 30,
|------------------------------------------------------------------ | -------------
|                                                                   | 2001         
|                                                                   |              
|Cash and cash equivalents:                                         |              
|Cash and due from banks                                            | $ 8,972,134  
|Federal funds sold                                                 | 10,759,000   
|Interest bearing deposits in other banks                           | 220,179      
|Total cash and cash equivalents                                    | 19,951,313   
|Investment securities held to maturity, fair value $26,459,062     |              
|and $17,475,680 at September 30, 2001 and 2000,                    |              
|respectively (note 2)                                              | 25,950,677   
|Loans receivable, net of allowance for loan loss of $2,414,477 and |              
|$2,364,704 at September 30, 2001 and 2000, respectively (note 3)   | 187,526,158  
|Real estate owned                                                  | 928,739      
|Federal Home Loan Bank stock, at cost                              | 992,300      
|Premises and equipment, net (note 4)                               | 5,616,054    
|Accrued interest receivable (note 5)                               | 1,328,007    
|Intangible assets, net                                             | 502,025      
|Deferred income taxes, net (note 9)                                | 686,327      
|Other assets                                                       | 1,986,436    
|                                                                   |              
|Total Assets                                                       | $ 245,468,036
|                                                                   |              
|Liabilities and Stockholders' Equity                               |              
|                                                                   |              
|Liabilities:                                                       |              
|                                                                   |              
|Deposits (note 6)                                                  | $ 218,982,788
|Federal Home Loan Bank advances (note 7)                           | 3,500,000    
|Other borrowed funds (note 7)                                      | 2,000,000    
|Accrued interest payable                                           | 644,192      
|Obligations under capital lease (note 10)                          | 172,959      
|Accrued expenses and other liabilities                             | 498,937      
|Total liabilities                                                  | 225,798,876  
|                                                                   |              
|Commitments and contingencies (notes 10 and 16)                    |              
|                                                                   |              
|Stockholders' Equity (note 8):                                     |              
|                                                                   |              
|Common stock, $1 par value; 10,000,000 shares                      |              
|authorized; 7,713,733 shares issued and outstanding                |              
|at September 30, 2001 and 2000                                     | 7,713,733    
|Additional paid-in capital                                         | 396,297      
|Retained earnings                                                  | 11,559,130   
|Total stockholders' equity                                         | 19,669,160   
|                                                                   |              
|Total Liabilities and Stockholders' Equity                         | $ 245,468,036
|                                                                   |              
|See accompanying notes to consolidated financial statements.       |              



|CONSOLIDATED STATEMENTS OF OPERATIONS                       
|------------------------------------------------------------
|First Georgia Holding, Inc. and subsidiary                  
|                                                            
|                                                            
|Interest Income:                                            
|Loans                                                       
|Mortgage-backed securities                                  
|Investment securities                                       
|Other                                                       
|Total interest income                                       
|                                                            
|Interest Expense:                                           
|Deposits (note 6)                                           
|Advances and other borrowings                               
|Total interest expenses                                     
|                                                            
|Net interest income                                         
|Provision for Loan Losses (note 3)                          
|Net interest income after provision for loan losses         
|                                                            
|Other Income:                                               
|Loan fees                                                   
|Deposit service charges                                     
|Gain on sale of branch (note 11)                            
|Other operating income                                      
|Total other income                                          
|                                                            
|Other Expenses:                                             
|Salaries and employee benefits                              
|Net occupancy expense                                       
|Data processing expenses                                    
|Postage                                                     
|Office supplies                                             
|Amortization of intangibles                                 
|Federal insurance premiums                                  
|Other operating expenses                                    
|Total other expenses                                        
|                                                            
|Income before income taxes                                  
|Income Tax Expense (note 9)                                 
|                                                            
|Net Income                                                  
|                                                            
|Net Income Per Share:                                       
|Basic                                                       
|Diluted                                                     
|See accompanying notes to consolidated financial statements.



|CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY                        
|-----------------------------------------------------------------------
|First Georgia Holding, Inc. and subsidiary                             
|                                                                       
|                                                                       
|Balance, September 30, 1998                                            
|                                                                       
|Net income                                                             
|Cash dividends, $0.08 per share                                        
|Fractional shares related to stock split paid in cash                  
|                                                                       
|Balance, September 30, 1999                                            
|                                                                       
|Purchase of treasury stock                                             
|Reissuance of treasury stock and simultaneous exercise of stock options
|Exercise of stock options                                              
|Net Income                                                             
|Cash Dividends, $0.08 per share                                        
|                                                                       
|Balance, September 30, 2000                                            
|                                                                       
|Net Income                                                             
|Cash Dividends, $0.08 per share                                        
|                                                                       
|Balance, September 30, 2001                                            
|                                                                       
|See accompanying notes to consolidated financial statements.           



|CONSOLIDATED STATEMENTS OF CASH FLOWS                                             |                           |             
|--------------------------------------------------------------------------------- | ------------------------- | ------------
|First Georgia Holding, Inc. and subsidiary                                        |                           |             
|                                                                                  | Years Ended September 30,
|                                                                                  | 2001                      | 2000        
|Operating Activities                                                              |                           |             
|Net income                                                                        | $ 2,007,786               | $ 1,431,655 
|Adjustments to reconcile net income to net cash provided by operating activities: |                           |             
|                                                                                  |                           |             
|Provision for loan losses                                                         | 435,000                   | 2,640,000   
|Depreciation and amortization                                                     | 756,221                   | 763,765     
|(Accretion) amortization of (discounts) premiums on investments, net              | (456,693)                 | (17,700)    
|Amortization of intangibles                                                       | 95,628                    | 95,628      
|Amortization of net deferred loan fees                                            | (191,133)                 | (249,286)   
|Gain on sale of branch                                                            | -                         | -           
|Gain on sale of real estate owned                                                 | (82,124)                  | (16,315)    
|Loss on sale of repossesses assets                                                | 3,700                     | -           
|Loss on sale of premises and equipment                                            | 532                       | 7,205       
|Loss on sale of securities                                                        | (2,900)                   | -           
|Deferred income tax expense (benefit)                                             | 109,714                   | (384,031)   
|Decrease (increase) in accrued interest receivable                                | 179,685                   | (302,093)   
|Increase in other assets                                                          | (597,972)                 | (251,582)   
|Decrease in advance payments by borrowers for property taxes and insurance        | (11,385)                  | (11,006)    
|(Decrease) increase in accrued expenses and other liabilities                     | (29,094)                  | (36,578)    
|Net cash provided by operating activities                                         | 2,216,965                 | 3,669,662   
|Investing Activities                                                              |                           |             
|Principal payments received on mortgage-backed securities                         | 2,075,528                 | 1,754,133   
|Maturities of investment securities                                               | 3,689,618                 | 325,000     
|Purchase of investment securities                                                 | (13,378,109)              | (5,497,496) 
|Loan originations, net of principal repayments                                    | 3,388,640                 | (22,955,322)
|Purchase of premises and equipment                                                | (816,724)                 | (1,450,877) 
|Proceeds from sale of real estate owned                                           | 1,842,446                 | 5,000       
|Proceeds from sale of repossessed assets                                          | 116,988                   | 29,100      
|Proceeds from sale of premises and equipment                                      | 13,675                    | 10,750      
|Purchase of FHLB stock                                                            | (100,000)                 | (54,800)    
|Proceeds from redemption of FHLB stock                                            | -                         | -           
|Net cash used in investing activities                                             | (3,167,938)               | (27,834,512)



|                                                            |                           |                |              
|----------------------------------------------------------- | ------------------------- | -------------- | -------------
|CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT'D)              |                           |               
|First Georgia Holding, Inc. and subsidiary                  |                           |                |              
|                                                            | Years Ended September 30,
|                                                            | 2001                      | 2000           | 1999         
|Financing Activities                                        |                           |                |              
|Net increase in deposits                                    | $ 4,009,759               | $ 40,866,111   | $ 18,233,952 
|Net liabilities of branch assumed by purchaser, net of gain | -                         | -              | (7,909,400)  
|Proceeds from other borrowed funds                          | -                         | 2,000,000      | -            
|Proceeds from FHLB advances                                 | 6,000,000                 | -              | 7,500,000    
|Repayment of FHLB advances                                  | (5,000,000)               | (6,100,000)    | (7,500,000)  
|Net (decrease) increase in federal funds purchased          | -                         | (2,860,000)    | 2,860,000    
|Net proceeds from exercise of stock options                 | -                         | 195,919        | -            
|Dividends and fractional shares                             | (694,232)                 | (596,479)      | (576,755)    
|Net cash provided by financing activities                   | 4,315,526                 | 33,505,551     | 12,607,797   
|Increase (decrease) in cash and cash equivalents            | 3,364,553                 | 9,340,701      | (10,464,107) 
|Cash and cash equivalents at beginning of year              | 16,586,760                | 7,246,059      | 17,710,166   
|Cash and cash equivalents at end of year                    | $ 19,951,313              | $  16,586,760  | $   7,246,049
|Supplemental disclosure of cash paid during year for:       |                           |               
|Interest                                                    | $  10,373,000             | $    9,334,000 | $   7,959,000
|Income taxes                                                | $  925,000                | $    1,649,000 | $   1,193,000

Supplemental disclosure of non-cash activities:

Loans receivable of approximately $2,779,000, $758,000 and $302,000 were transferred to real estate owned during the years ended September 30, 2001, 2000, and 1999, respectively.

Loans receivable of approximately $97,000, $37,000 and $106,500 were transferred to repossessed assets during the years ended September 30, 2001, 2000 and 1999, respectively.

Sales of real estate owned totaling approximately $583,000, $757,000 and $538,000 for the years ended September 30, 2001, 2000 and 1999, respectively, were financed by the Bank.

See accompanying notes to consolidated financial statements.

(1) Summary of Significant Accounting Policies

(a) Basis of Financial Statement Presentation

Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses and the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans. In connection with the determination of the allowances for losses on loans and real estate acquired through foreclosure, management obtains independent appraisals on underlying collateral and reviews available market data such as comparable sales and recent market trends through discussions with local real estate professionals.

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

(b) Cash and Cash Equivalents

(c) Investment Securities Held to Maturity

Held to maturity securities are recorded at cost adjusted for the amortization or accretion of premiums and discounts. Premiums and discounts are amortized or accreted over the life of the related investment security using a method which approximates the interest method. Purchase premiums and discounts on mortgage-backed securities are amortized and accreted to interest income using a method which approximates the interest method, over the remaining lives of the securities taking into consideration assumed prepayment patterns.

(d) Loans and the Allowance for Loan Losses

Loans are placed on a nonaccrual basis when reasonable doubt exists as to the full, timely collection of interest and principal or they become contractually in default for 90 days or more as to either interest or principal unless they are both well secured and in the process of collection.

Additions to the allowance for loan losses are charged to operations based upon management's evaluation of the probable losses in its loan portfolio. This evaluation considers the estimated value of the underlying collateral and such other factors as, in management's judgment, deserve recognition under existing economic conditions. While management uses the best information available to make evaluations, future adjustments to the allowance may be necessary if conditions differ substantially from the assumptions used in making the evaluations. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Bank's allowances for losses on loans and real estate owned. Such agencies may require the Bank to recognize additions to the allowances based on their judgments of information available to them at the time of their examination.

A loan is considered impaired when it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. The Bank's impaired loans include nonaccrual loans, troubled debt restructurings, and large loans more than 90 days delinquent in which full payment of principal and interest is not expected. Cash receipts on impaired loans are used to reduce principal balances. Impairment losses are included in the allowance for loan losses through a charge to the provision for loan losses. Impairment losses are measured by the present value of expected future cash flows discounted at the loan's effective interest rate, or at either the loan's observable market price or the fair value of the collateral. Adjustment to impairment losses due to changes in the fair value of an impaired loan's underlying collateral are included in the provision for losses. Upon disposition of an impaired loan, any related valuation allowance is reversed through a charge-off to the allowance for loan losses.

Large groups of smaller balance homogeneous loans (consumer loans) are collectively evaluated for impairment. Commercial loans and larger balance real estate and other loans are individually evaluated for impairment.

(e) Loan Origination and Commitment Fees

(f) Real Estate Owned

(g) Federal Home Loan Bank Stock

(h) Premises and Equipment

(i) Intangible Assets

(j) Income Taxes

Deferred tax assets and liabilities are recognized for temporary differences between the financial reporting basis of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

(k) Net Income Per Share

(l) Stock Options

(m) Reclassifications

In July of 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standard ("SFAS") No. 141 "Business Combinations" and SFAS No. 142 "Goodwill and Other Intangible Assets". SFAS No. 141 establishes accounting and reporting standards for business combinations. This Statement eliminates the use of the pooling-of-interests method of accounting for business combinations, requiring future business combinations to be accounted for using the purchase method of accounting. The provisions of this Statement apply to all business combinations initiated after June 30, 2001. This Statement also applies to all business combinations accounted for using the purchase method of accounting for which the date of acquisition is July 1, 2001 or later. It does not appear the Statement will have a material impact on the Company's consolidated financial position and consolidated results of operations.

SFAS No. 142 establishes accounting and reporting standards for goodwill and other intangible assets. With the adoption of this Statement, goodwill is no longer subject to amortization over its estimated useful life. Rather, goodwill will be subject to at least an annual assessment for impairment by applying a fair-value based test. SFAS No. 142 is required to be adopted for fiscal years beginning after December 15, 2001. The Company does not expect adoption of the Statement to have a material impact on the Company's consolidated financial position and consolidated results of operations.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations". SFAS No. 143 requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred and requires that the amount recorded as a liability be capitalized by increasing the carrying amount of the related long-lived assets. Subsequent to initial measurement, the liability is accreted to the ultimate amount anticipated to be paid, and is also adjusted for revisions to the timing or amount of estimated cash flows. The capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, an entity either settles the obligation for its recorded amount or incurs a gain or loss upon settlement. SFAS No. 143 is required to be adopted for fiscal years beginning after June 15, 2002, with earlier application encouraged. The Company has not yet determined the impact, if any, the adoption of SFAS No. 143 will have on the Company's consolidated financial position and results of operations.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". This statement supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of". SFAS No. 144 retains the fundamental provisions of SFAS No. 121 for (a) recognition and measurement of the impairment of long-lived assets to be held and used and (b) measurement of long-lived assets to be disposed of by sale. SFAS No. 144 is effective for fiscal years beginning after December 15, 2001. The Company has not yet determined the impact, if any, the adoption of SFAS No. 144 will have on the Company's consolidated financial position and results of operations.

In July 2001, the SEC released Staff Accounting Bulletin ("SAB") No. 102, "Selected Loan Loss Allowance Methodology and Documentation Issues". SAB No. 102 expresses the SEC Staff's views on the development, documentation and application of a systematic methodology in determining a GAAP allowance for loan losses. The SAB stresses that the methodology for computing the allowance be both disciplined and consistent, and emphasizes that the documentation supporting the allowance and provision must be sufficient. SAB No. 102 provides guidance that is consistent with the Federal Financial Institutions Examination Council's ("FFIEC") Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Banks and Savings Institutions, which was also issued in July 2001. SAB No. 102 is applicable to all registrants with material loan portfolios while the parallel guidance of the FFIEC is applicable only to banks and savings institution. The adoption of this bulletin did not have a material impact on reported results of operations of the Company.

(2) Investment Securities Held to Maturity

|                                     | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value  
|------------------------------------ | -------------- | ---------------- | ----------------- | ------------
|                                     |                |                  |                   |             
|September 30, 2001:                  |                |                  |                   |             
|                                     |                |                  |                   |             
|Mortgage-backed securities and SBA's | $ 21,470,502   | $ 635,972        | $ (172,932)       | $ 21,933,542
|State and municipal                  | 4,480,175      | 64,117           | (18,772)          | 4,525,520   
|                                     | $ 25,950,677   | $ 700,089        | $ (191,704)       | $ 26,459,062
|                                     |                |                  |                   |             
|September 30, 2000:                  |                |                  |                   |             
|                                     |                |                  |                   |             
|Mortgage-backed securities and SBA's | $ 16,692,276   | $ 101,089        | $ (502,311)       | $ 16,291,054
|State and municipal                  | 1,185,845      | 4,202            | (5,421)           | 1,184,626   
|                                     | $ 17,878,121   | $ 105,291        | $ (507,732)       | $ 17,475,680

(2) Investment Securities Held to Maturity (Cont'd)

A summary of investment and mortgage-backed securities by maturity as of September 30, 2001 is shown below. The entire principal amount of mortgage-backed securities is shown in the year of contractual maturity. Expected maturities will differ from the maturities shown because borrowers have the right to prepay obligations without prepayment penalties, and principal is paid down over the contractual life of the mortgage-backed securities.

|                                   | Amortized Cost     | Fair Value       
|---------------------------------- | ------------------ | -----------------
|                                   |                    |                  
|Due within 1 year                  | $                - | $               -
|Due after 1 year through 5 years   | 1,252,396          | 1,292,604        
|Due after 5 years through 10 years | 5,064,156          | 5,132,512        
|Due after 10 years                 | 19,634,125         | 20,033,946       
|                                   | $ 25,950,677       | $ 26,459,062     

At September 30, 2001 and 2000, the Company had pledged approximately $13,340,000 and $11,540,000, respectively, of its securities to government and municipal depositors

(3) Loans Receivable

|                                  | 2001          | 2000         
|--------------------------------- | ------------- | -------------
|Real estate mortgage loans        | $ 123,603,340 | $ 128,039,030
|Real estate construction loans    | 34,202,379    | 35,871,217   
|Consumer loans                    | 17,454,671    | 17,089,161   
|Commercial and other loans        | 14,823,605    | 15,285,001   
|                                  | 190,083,995   | 196,284,409  
|Less:                             |               |              
|Deferred loan fees and costs, net | (119,042)     | (212,055)    
|Unearned interest income          | (24,318)      | (63,274)     
|Allowance for loan losses         | (2,414,477)   | (2,364,704)  
|                                  | $ 187,526,158 | $ 193,644,376

An analysis of the activity in the allowance for loan losses is as follows:

|                             | 2001        | 2000        | 1999       
|---------------------------- | ----------- | ----------- | -----------
|Balance at beginning of year | $ 2,364,704 | $ 1,235,566 | $ 968,632  
|Provision for loan losses    | 435,000     | 2,640,000   | 509,067    
|Recoveries                   | 325,298     | 142,448     | 57,016     
|Charge-offs                  | (710,525)   | (1,653,310) | (299,149)  
|Balance at end of year       | $ 2,414,477 | $ 2,364,704 | $ 1,235,566

The Bank extends credit to customers throughout its market area with a concentration in real estate mortgage loans. The real estate loan portfolio is substantially secured by properties located throughout Southeast Georgia. Although the Bank has a diversified loan portfolio, a substantial portion of its borrowers' ability to repay such loans is dependent upon the economy in the Bank's market area

(3) Loans Receivable (Cont'd)

At September 30, 2001 and 2000, the Bank had nonaccrual loans aggregating approximately $3,541,000 and $3,720,000, respectively. The effects of carrying nonaccrual loans during 2001, 2000 and 1999 resulted in a reduction of interest income of approximately $183,000, $136,000, and $56,000, respectively.

The following is a summary of information pertaining to impaired loans:

|                                              | September 30,
|--------------------------------------------- | -------------
|                                              | 2001         
|Impaired loans with a valuation allowance     | $   1,195,238
|Impaired loans without a valuation allowance  | -            
|Total impaired loans                          | $   1,195,238
|                                              |              
|Valuation allowance related to impaired loans | $    711,000 



|                                                             | Years ended September 30,
|------------------------------------------------------------ | -------------------------
|                                                             | 2001                     
|Average Investment in impaired loans                         | $  798,529               
|Interest income recognized on impaired loans                 | $         -              
|Interest income recognized on a cash basis on impaired loans | $    83,738              

No additional funds are committed to be advanced in connection with impaired loans.

At September 30, 2001 and 2000, the Bank had no loans held for sale.

The Bank has direct and indirect loans outstanding to certain directors and executive officers. All of these loans were made in the ordinary course of business on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable transactions with other persons, and did not involve more than the normal credit risk or present other unfavorable features. The following is a summary of such loans outstanding and the activity in these loans for 2001 and 2000:

|                             | 2001        | 2000       
|---------------------------- | ----------- | -----------
|                             |             |            
|Balance at beginning of year | $ 4,802,788 | $ 5,558,158
|New borrowings               | 4,929,244   | 8,740,703  
|Repayments                   | (4,150,820) | (9,496,073)
|Balance at end of year       | $ 5,581,212 | $ 4,802,788

At September 30, 2001, 2000, and 1999, the Bank was servicing loans for others under a participation agreement, aggregating approximately $10,856,000, $11,652,000, and $10,339,000, respectively.

At September 30, 2001 and 2000, the Company had pledged specific residential real estate mortgage loans amounting to approximately $10,441,000 and $13,932,000, respectively, as collateral for Federal Home Loan Bank advances.

(4) Premises and Equipment

|                                                | 2001             | 2000            
|----------------------------------------------- | ---------------- | ----------------
|Land                                            | $        893,410 | $        893,410
|Buildings and improvements                      | 3,814,488        | 3,504,509       
|Buildings under capital lease                   | 403,466          | 403,466         
|Leasehold improvements                          | -                | 197,674         
|Furniture, equipment, and automobiles           | 5,598,813        | 5,157,595       
|                                                | 10,710,177       | 10,156,654      
|Less accumulated depreciation                   |                  |                 
|Less accumulated depreciation and 
amortization | (5,094,123)      | (4,586,896)     
|Premises and equipment, net                     | $     5,616,054  | $     5,569,758 

Depreciation expense for the years ended September 30, 2001, 2000 and 1999 amounted to approximately $756,000, $764,000 and $674,000, respectively.

(5)

|                           | 2001        | 2000       
|-------------------------- | ----------- | -----------
|Loans                      | $ 1,089,240 | $ 1,384,324
|Investment securities      | 71,437      | 25,917     
|Mortgage-backed securities | 167,330     | 133,451    
|                           | $ 1,328,007 | $ 1,507,692

(6) Deposits

|                                | 2001         |  | 2000    
|------------------------------- | ------------ |  | --------
|                                |              |  | Weighted
|                                |              |  | Average 
|                                | Balance      |  | Rate    
|Non-interest demand deposits    | $ 28,450,103 |  |         
|Negotiable orders of withdrawal | 24,090,739   |  | 0.75%   
|Money market deposit accounts   | 10,657,545   |  | 2.00    
|Savings deposits                | 12,352,185   |  | 1.75    
|Certificates of deposits:       |              |  |         
|Certificates less than $100,000 | 126,935,300  |  | 5.75    
|Jumbo certificates              | 16,496,916   |  | 5.94    
|                                | $218,982,788 |  | 4.06%   

Interest expense on deposits is summarized below:

|                                | 2001        |  | 2000        |  | 1999       
|------------------------------- | ----------- |  | ----------- |  | -----------
|Negotiable orders of withdrawal | $ 249,088   |  | $ 189,363   |  | $ 201,890  
|Money market deposit accounts   | 410,710     |  | 543,966     |  | 341,899    
|Savings deposits                | 221,289     |  | 190,971     |  | 167,003    
|Certificates of deposit:        |             |  |             |  |            
|Certificates less than $100,000 | 8,044,949   |  | 7,195,245   |  | 5,656,830  
|Jumbo certificates              | 1,017,524   |  | 949,261     |  | 1,063,907  
|Less:                           |             |  |             |  |            
|Early withdrawal penalties      | (24,582)    |  | (32,383)    |  | (33,811)   
|                                | $ 9,918,978 |  | $ 9,036,423 |  | $ 7,397,718

At September 30, 2001, the rates on deposits were as follows:

|Negotiable orders of withdrawal | .75%        
|------------------------------- | ------------
|Money market deposit accounts   | 2.00%       
|Savings deposits                | 1.75%       
|Certificates of deposits        | 1.75 - 7.52%

As of September 30, 2001, and 2000, the Bank had no brokered deposits.

The amount and maturities of certificates of deposits at September 30, 2001 are as follows:

|Year Ending September 30, | Amount      
|------------------------- | ------------
|2002                      | $113,619,984
|2003                      | 16,343,148  
|2004                      | 9,704,152   
|2005                      | 3,039,514   
|2006                      | 718,711     
|After 2006                | 6,707       
|                          | $143,432,216

(7)  Federal Home Loan Bank Advances And Other Borrowed Funds

|                       |  | 2001       |  | 2000        
|---------------------- |  | ---------- |  | ------------
|Due During Year Ending |  |            |  | Weighted    
|September 30,          |  | Amount     |  | Average Rate
|                       |  |            |  |             
|2002                   |  | $ 500,000  |  | 7.90%       
|2006                   |  | 1,000,000  |  | 5.90        
|2008                   |  | 2,000,000  |  | 5.51        
|                       |  | $3,500,000 |  | 5.96%       

The Bank has the ability to borrow additional funds from the Federal Home Loan Bank. The advances and any future borrowings are collateralized by certain qualifying real estate loans under a security agreement with the Federal Home Loan Bank. Additionally, all stock of the Federal Home Loan Bank is pledged as collateral for the advances.

The Federal Home Loan Bank has the option to convert both the $1,000,000 and $2,000,000 advances outstanding at September 30, 2001 into a three-month LIBOR-based floating rate advance effective November 10, 2001 and March 26, 2003, respectively, and any payment date thereafter with at least two business days prior notice to the Company.

If the Federal Home Loan Bank elects to convert this advance, then the Company may elect, with at least two business days prior written notice, to terminate in whole or part this transaction without payment of a termination amount on any subsequent payment date. The Company may elect to terminate the advance and pay a prepayment penalty, with two days prior written notice, if the Federal Home Loan Bank does not elect to convert this advance.

First Georgia Holding, Inc. obtained a line of credit for up to $3,000,000 from the Bankers Bank in March 2000. Interest is payable quarterly at the Prime rate minus 50 basis points (5.5% at September 30, 2001). All of the issued and outstanding shares of capital stock of First Georgia Bank is pledged as collateral for this line of credit. As of September 30, 2001 and 2000, the Company had borrowed $2,000,000 against this line of credit. The line of credit matures on March 31, 2002 with an option to extend until March 31, 2012.

(8) Stockholders' Equity and Regulatory Matters

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum capital amounts and ratios (set forth in the table below). The Bank's primary regulatory agency,

As of September 30, 2001, the most recent notification date from the OTS, the Bank was categorized as "Well Capitalized" under the regulatory framework for prompt corrective action. To be categorized as "Well Capitalized", the Bank must maintain minimum core, and total capital and Tier 1 capital ratios of at least 5%, 10%, and 6%, respectively. There are no conditions or events since that notification that management believes have changed the Bank's category.

(8) Stockholders' Equity and Regulatory Matters (cont'd)

|                                            |              |  |        |  | For Capital Adequacy |  | To Be Categorized as "Well  
|------------------------------------------- | ------------ |  | ------ |  | -------------------- |  | ----------------------------
|                                            |              |  |        |  | Purposes             |  | Capitalized" Under Prompt   
|                                            | Actual       |  |        |  | (For OTS Purposes)   |  | Corrective Action Provisions
|As of September 30, 2001                    | Amount       |  | Ratio  |  | Amount               |  | Ratio                       
|                                            |              |  |        |  |                      |  |                             
|Tangible Capital 
(to tangible assets)      | $ 21,126,000 |  | 8.62%  |  | $ 3,674,000          |  | 1.50%                       
|Core Capital 
(to adjusted tangible assets) | 21,628,000   |  | 8.81%  |  | 9,819,000            |  | 4.00%                       
|Total Capital 
(to risk-weighted assets)    | 22,920,000   |  | 11.17% |  | 16,421,000           |  | 8.00%                       
|Tier 1 Capital 
(to risk-weighted assets)   | 21,628,000   |  | 10.54% |  | N/A                  |  | N/A                         
|                                            |              |  |        |  |                      |  |                             
|                                            |              |  |        |  | For Capital Adequacy |  | To Be Categorized as "Well  
|                                            |              |  |        |  | Purposes             |  | Capitalized" Under Prompt   
|                                            | Actual       |  |        |  | (For OTS Purposes)   |  | Corrective Action Provisions
|As of September 30, 2000                    | Amount       |  | Ratio  |  | Amount               |  | Ratio                       
|                                            |              |  |        |  |                      |  |                             
|Tangible Capital 
(to tangible assets)      | $ 19,665,000 |  | 8.24%  |  | $ 3,579,000          |  | 1.50%                       
|Core Capital 
(to adjusted tangible assets) | 20,263,000   |  | 8.47%  |  | 9,567,000            |  | 4.00%                       
|Total Capital 
(to risk-weighted assets)    | 21,994,000   |  | 10.61% |  | 16,578,000           |  | 8.00%                       
|Tier 1 Capital 
(to risk-weighted assets)   | 20,263,000   |  | 9.78%  |  | N/A                  |  | N/A                         



(9) Income Taxes

The components of income tax expense are as follows:

|                 | 2001       | 2000       | 1999      
|---------------- | ---------- | ---------- | ----------
|Federal: Current | $ 909,140  | $1,143,255 | $1,445,959
|Deferred         | 92,160     | (323,395)  | (185,500) 
|                 | 1,001,300  | 819,860    | 1,260,459 
|                 |            |            |           
|State: Current   | 112,366    | 149,927    | 196,555   
|Deferred         | 17,554     | (60,636)   | (34,825)  
|                 | 129,920    | 89,291     | 161,730   
|                 | $1,131,220 | $ 909,151  | $1,422,189

(9) Income Taxes (Cont'd)

The difference between the actual provision for income taxes and income taxes computed at the Federal statutory rate of 34% is as follows:

|                                    | 2001       | 2000     | 1999      
|----------------------------------- | ---------- | -------- | ----------
|Federal taxes at statutory rate     | $1,067,259 | $795,874 | $1,238,364
|Increase (decrease) resulting from: |            |          |           
|State income taxes, net             | 48,193     | 52,217   | 146,840   
|Amortization of intangibles         | 8,686      | 8,686    | (6,289)   
|Tax exempt income                   | (32,788)   | (6,828)  | (10,425)  
|Other, net                          | 39,870     | 59,202   | 53,699    
|                                    | $1,131,220 | $909,151 | $1,422,189

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of September 30, 2001 and 2000 are presented below:

|                                | 2001      | 2000     
|------------------------------- | --------- | ---------
|Deferred tax assets:            |           |          
|Allowance for loan losses       | $ 808,522 | $ 889,089
|Deferred loan costs             | 45,188    | 80,496   
|Total gross deferred tax assets | 853,710   | 969,585  
|Less valuation allowance        | -         | -        
|                                |           |          
|Net deferred tax assets         | 853,710   | 969,585  
|                                |           |          
|Deferred tax liabilities:       |           |          
|FHLB stock dividends            | 127,763   | 127,763  
|Depreciation                    | 39,620    | 45,781   
|                                |           |          
|Total deferred tax liabilities  | 167,383   | 173,544  
|                                |           |          
|Net deferred tax assets         | $ 686,327 | $ 796,041

Prior to January 1, 1996, under the Internal Revenue Code (the "Code"), the Company was allowed a special bad debt deduction related to additions to tax bad debt reserves established for the purpose of absorbing losses. The provisions of the Code permitted the Company to deduct from taxable income an allowance for bad debts based on the greater of a percentage of taxable income before such deductions or actual loss experience. Retained earnings at September 30, 2001 and 2000 include approximately $248,000 for which no deferred Federal income tax liability has been recognized. The amount represents an allocation of income for bad debt deductions for tax purposes only. Reduction of amount so allocated for purposes other than tax bad debt losses or adjustments arising from carry back of net operating losses would create income for tax purposes only, which would be subject to the then current corporate income tax rate.

(10) Leases

On September 28, 1987, the Bank entered into a sale-leaseback of one of its branches. The facility has been capitalized and the related obligation is recorded as a liability in the accompanying financial statements based on the present value of future minimum lease payments. The lease term expires August 28, 2007. Premises and equipment includes buildings under capital leases of $403,466 at September 30, 2001 and 2000 and accumulated amortization of $270,243 and $246,243 at September 30, 2001 and 2000, respectively.

The present value of future minimum capital lease payments as of September 30, 2001, are:

|Year ending September 30,                              |         
|------------------------------------------------------ | --------
|2002                                                   | $ 39,348
|2003                                                   | 39,348  
|2004                                                   | 39,348  
|2005                                                   | 39,348  
|2006                                                   | 39,348  
|Later years                                            | 39,348  
|Total minimum lease payments                           | 236,088 
|Less amount representing interest at 10%               | (63,129)
|Present value of future minimum capital lease payments | $172,959

During the year ended September 30, 2000, the Bank terminated its operating lease for an operating facility that was replaced by a new, permanent branch facility. The balance of the lease was paid off based on the net present value of the future lease payments which was approximately $32,000. There was no additional penalty for this transaction and no further liability exists.

Total rent expense was approximately $89,000, and $48,000 for the years ended September 30, 2000 and 1999, respectively.

(11) Sale of Branch

Effective April 30, 1999, the Bank completed the sale of its Blackshear branch, which had deposits of approximately $9,000,000 and net premises and equipment of $52,037. This transaction resulted in a gain of $766,511 which is reported separately in the accompanying consolidated statements of operations.

(12) Employee Benefit Plans

The Company has a 401(k) Profit Sharing Plan (the "Plan") which covers substantially all of its employees. The Company matches 75% of employee contributions to the Plan, up to 6% of an employee's salary. The Company contributed $103,000, $68,849, and $45,747 to the Plan during the years ended September 30, 2001, 2000, and 1999, respectively.

Also, the Company has an Employee Stock Purchase Plan which covers substantially all of its employees. Employees pay 85% of the price at which the Company buys its stock in the open market. During the years ended September 30, 2001, 2000 and 1999, approximately 19,000, 16,000 and 8,000 shares, respectively, were purchased by employees. As a result of such employee stock purchases, the Company incurred employee benefits expense of approximately $18,000, $15,000 and $12,000 for the years ended September 30, 2001, 2000 and 1999, respectively.

(13) Stock Option Plan

During 2001, the Board of Directors and the Stockholders of the Company adopted the 2000 Stock Incentive Plan (the "2000 Option Plan"). The Company has reserved 825,000 shares of common stock for issuance under the 2000 Option Plan. There were no options granted under the 2000 Option Plan for the year ended September 30, 2001.

During 1995, the Company adopted a nonqualified Stock Option Plan (the "1995 Option Plan"). The Company has reserved 1,033,125 shares of common stock for issuance under the 1995 Option Plan. The Company also has a nonqualified Stock Option Plan (the "Option Plan") adopted prior to 1995. The Company has 37,970 options outstanding under this plan.

Outstanding options, consisting of five-year incentive stock options, vest and become exercisable over a five-year period from the date of grant. The outstanding options expire five years from the date of grant or upon retirement from the Company, and are contingent upon continued employment during the applicable five-year period.

If compensation cost for stock option grants had been determined based on the fair value at the grant dates for 2001, 2000 and 1999 consistent with the method prescribed by SFAS No. 123, the Company's net earnings and earnings per share would have been the pro forma amounts indicated below:

|September 30,                  | 2001        | 2000        | 1999       
|------------------------------ | ----------- | ----------- | -----------
|Net Income                     |             |             |            
|As Reported                    | $ 2,007,786 | $ 1,431,655 | $ 2,220,054
|Pro forma                      | 1,914,452   | 1,376,494   | 2,164,893  
|                               |             |             |            
|Net Income Per Share - Basic   |             |             |            
|As Reported                    | 0.26        | 0.20        | 0.31       
|Pro forma                      | 0.25        | 0.19        | 0.30       
|                               |             |             |            
|Net Income Per Share - Diluted |             |             |            
|As Reported                    | 0.26        | 0.19        | 0.29       
|Pro forma                      | 0.25        | 0.18        | 0.29       

Options for a total of 360,000 shares were granted on September 23, 1998. Under SFAS No. 123, for pro forma disclosure purposes, the fair value of such options of $663,722 is to be expensed over the vesting period of five years. There were no stock options granted in the years ended September 30, 2001, 2000 or 1999.

A summary of the status of fixed stock option grants under the Company's stock-based compensation plans as of September 30, 2001, 2000 and 1999, and changes during the years ending on those dates is presented below. Such amounts have been adjusted to reflect a 50% stock dividend accounted for as 3-for-2 stock split during the year ended September 30, 1999.

|                                | 2001             |                | 2000             |                | 1999            
|------------------------------- | ---------------- | -------------- | ---------------- | -------------- | ----------------
|                                | Weighted Average |                | Weighted Average |                | Weighted Average
|                                | Options          | Exercise Price | Options          | Exercise Price |                 
|                                |                  |                |                  |                |                 
|Outstanding - October 1         | 397,970          | $ 5.68         |                  | 1,056,095      | $ 3.00          
|Exercised                       | -                | -              |                  | (658,125)      | 1.38            
|Outstanding - September 30      | 397,970          | $ 5.68         |                  | 397,970        | $ 5.68          
|                                |                  |                |                  |                |                 
|Options exercisable at year end | 232,970          | $ 5.21         |                  | 127,970        | $ 4.36          

The following table summarizes information about fixed stock options outstanding at September 30, 2001:

|Exercise | Options     | Options     | Weighted Average
|-------- | ----------- | ----------- | ----------------
|Price    | Outstanding | Exercisable | Remaining Life  
|$ 0.66   | 37,970      | 37,970      | 0.63            
|5.92     | 180,000     | 135,000     | 1.98            
|6.52     | 180,000     | 60,000      | 1.98            
|         | 397,970     | 232,970     |                 

Remaining non-exercisable options as of September 30, 2001 become exercisable as follows:

|2002 | 105,000
|---- | -------
|2003 | 60,000 
|     | 165,000

(14) Net Income Per Share

Following is a reconciliation of the denominator used in the computation of basic and diluted earnings per common share for the years ended September 30:

|                    | Net Income  |  | Weighted Average Shares Outstanding |  | Earnings Per Share
|------------------- | ----------- |  | ----------------------------------- |  | ------------------
|2001                |             |  |                                     |  |                   
|Basic               | $ 2,007,786 |  | 7,713,733                           |  | $ 0.26            
|                    |             |  |                                     |  |                   
|Effect of Dilution: |             |  |                                     |  |                   
|Stock Options       |             |  | 31,892                              |  |                   
|Diluted             | $ 2,007,786 |  | 7,745,625                           |  | $ 0.26            
|                    |             |  |                                     |  |                   
|2000                |             |  |                                     |  |                   
|Basic               | $ 1,431,655 |  | 7,315,984                           |  | $ 0.20            
|                    |             |  |                                     |  |                   
|Effect of Dilution: |             |  |                                     |  |                   
|Stock Options       |             |  | 267,196                             |  |                   
|Diluted             | $ 1,431,655 |  | 7,583,180                           |  | $ 0.19            
|                    |             |  |                                     |  |                   
|1999                |             |  |                                     |  |                   
|Basic               | $ 2,220,054 |  | 7,198,426                           |  | $ 0.31            
|                    |             |  |                                     |  |                   
|Effect of Dilution: |             |  |                                     |  |                   
|Stock Options       |             |  | 333,113                             |  |                   
|Diluted             | $ 2,220,054 |  | 7,531,539                           |  | $ 0.29            

The incremental shares from the assumed conversion of stock options were determined using the treasury stock method under which the assumed proceeds were equal to the amount that the Company would receive upon the exercise of the options. The assumed proceeds are used to purchase outstanding common shares at the average market price during the period.

For the years ended September 30, 2001, 2000 and 1999, 360,000 stock options were excluded from the computation of diluted earnings per share due to their antidilutive effect.

(15) Condensed Financial Information of First Georgia Holding, Inc. (Parent Only)

First Georgia Holding, Inc., was organized December 16, 1987. The following represents parent company only condensed financial information.

|                                           | September 30, 
|------------------------------------------ | --------------
|Condensed Balance Sheets                   | 2001          
|                                           |               
|Assets                                     |               
|Cash                                       | $       39,522
|Investment in subsidiary                   | 21,629,638    
|Total assets                               | $ 21,669,160  
|                                           |               
|Liabilities and Stockholders' Equity       |               
|                                           |               
|Other borrowed funds                       | $  2,000,000  
|                                           |               
|Stockholders' Equity                       |               
|Common stock                               | 7,713,733     
|Additional paid-in capital                 | 396,297       
|Retained earnings                          | 11,559,130    
|Total liabilities and stockholders' equity | $ 21,669,160  

|                                                     | Years Ended September 30,
|---------------------------------------------------- | -------------------------
|Condensed Statements of Operations                   | 2001                     
|                                                     |                          
|Dividends from Bank                                  | $   795,000              
|Expenses                                             | (154,562)                
|Income before equity in undistributed income of Bank | 640,438                  
|Equity in undistributed income of Bank               | 1,367,348                
|Net Income                                           | $ 2,007,786              



|Condensed Statements of Cash Flows                                                |             |             |            
|--------------------------------------------------------------------------------- | ----------- | ----------- | -----------
|                                                                                  | 2001        | 2000        | 1999       
|Operating Activities:                                                             |             |             |            
|Net income                                                                        | $ 2,007,786 | $ 1,431,655 | $ 2,220,054
|Adjustments to reconcile net income to net cash provided by operating activities: |             |             |            
|Equity in undistributed income of Bank                                            | (1,367,348) | (968,370)   | (1,640,094)
|Net cash provided by operating activities                                         | 640,438     | 463,285     | 579,960    
|Investing Activities:                                                             |             |             |            
|Distribution of capital to subsidiary                                             | -           | (2,000,000) | -          
|Financing Activities:                                                             |             |             |            
|Dividends paid on common stock                                                    | (694,232)   | (596,479)   | (575,873)  
|Fractional shares related to stock split paid in cash                             | -           | -           | (882)      
|Net proceeds from exercise of stock options                                       | -           | 195,919     | -          
|Proceeds from other borrowed funds                                                | -           | 2,000,000   | -          
|Net cash (used in) provided by financing activities                               | (694,232)   | 1,599,440   | (576,755)  
|(Decrease) increase in cash and cash equivalents                                  | (53,794)    | 62,725      | 3,205      
|Cash and cash equivalents at beginning of year                                    | 93,316      | 30,591      | 27,386     
|Cash and cash equivalents at end of year                                          | $ 39,522    | $ 93,316    | $ 30,591   

(15) Condensed Financial Information of First Georgia Holding, Inc. (Parent Only) (Cont'd)

(16) Commitments and Contingencies

(17) Fair Value of Financial Instruments

The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments.

Cash and due from banks, interest-bearing deposits in other banks, Federal funds sold and accrued interest receivable

Investment securities

Loans receivable

Off-balance sheet instruments

Deposits

Federal Home Loan Bank advances

Other borrowed funds

The following is a summary of the Company's Financial instruments as of September 30, 2001 and 2000:

|                                                           | 2001        |             | 2000
|---------------------------------------------------------- | ----------- | ----------- | ----
|                                                           | Carrying    | Estimated   |     
|                                                           | Value       | Fair Value  |     
|Assets                                                     |             |             |     
|                                                           |             |             |     
|Cash and due from banks                                    | $ 8,972,000 | $ 8,972,000 |     
|                                                           |             |             |     
|Interest bearing deposits in other financial 
institutions | 220,000     | 220,000     |     
|Federal funds sold                                         | 10,759,000  | 10,759,000  |     
|Investment securities                                      | 25,951,000  | 26,459,000  |     
|Loans                                                      | 187,526,000 | 196,996,000 |     
|                                                           |             |             |     
|Liabilities                                                |             |             |     
|                                                           |             |             |     
|Deposits:                                                  |             |             |     
|Non-interest bearing                                       | 28,450,000  | 28,450,000  |     
|Interest-bearing demand and savings                        | 47,100,000  | 47,100,000  |     
|Certificates of deposit                                    | 143,432,000 | 148,527,000 |     
|Federal Home Loan Bank advances                            | 3,500,000   | 3,496,000   |     
|Other borrowed funds                                       | 2,000,000   | 2,000,000   |     

(18) Off-Balance Sheet Activities

The Company's exposure to credit loss is represented by the contractual amount of these commitments. The Company follows the same credit policies in making commitments as it does for on-balance-sheet instruments.



|                                           | Contract Amount
|------------------------------------------ | ---------------
|                                           | 2001           
|                                           | (approximately)
|                                           |                
|Unfunded commitments under lines of credit | $36,413,000    
|Commercial and standby letters of credit   | 781,000        
|Available credit card lines                | 2,959,000      

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The commitments for equity lines of credit may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if it is deemed necessary by the Bank, is based on management's credit evaluation of the customer.

Unfunded commitments under commercial lines-of-credit, revolving credit lines and overdraft protection agreements, are commitments for possible future extensions of credit to existing customers. These lines-of-credit are uncollateralized and usually do not contain a specified maturity date and may not be drawn upon to the total extent to which the Bank is committed.

Commercial and standby letters-of-credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Those letters-of-credit are primarily issued to support public and private borrowing arrangements. Essentially all letters of credit issued have expiration dates within one year. The credit risk involved in issuing letters-of-credit is essentially the same as that involved in extending loan facilities to customers. The Bank generally holds collateral supporting those commitments if deemed necessary.

(19) Summarized Quarterly Data (Unaudited)

|                                                    | Fiscal Quarter
|--------------------------------------------------- | --------------
|                                                    | First         
|                                                    |               
|$ In Thousands Except Per Share Amounts             |               
|                                                    |               
|2001                                                |               
|Total interest income                               | $ 5,468,756   
|Interest expense                                    | 2,638,394     
|                                                    |               
|Net interest income                                 | 2,830,362     
|Provision for loan losses                           | 210,000       
|                                                    |               
|Net interest income after provision for loan losses | 2,620,362     
|Other income                                        | 711,385       
|Other expense                                       | 2,320,341     
|                                                    |               
|Income before income taxes                          | 1,011,406     
|Income tax expense                                  | 422,962       
|                                                    |               
|Net income                                          | $ 588,444     
|                                                    |               
|Basic income per share                              | $ 0.08        
|Diluted income per share                            | $ 0.08        
|                                                    |               
|2000                                                |               
|Total interest income                               | $ 4,477,045   
|Interest expense                                    | 2,060,529     
|                                                    |               
|Net interest income                                 | 2,416,516     
|Provision for loan losses                           | 30,000        
|                                                    |               
|Net interest income after provision for loan losses | 2,386,516     
|Other income                                        | 625,377       
|Other expense                                       | 2,011,715     
|                                                    |               
|Income before income taxes                          | 1,000,178     
|Income tax expense                                  | 400,434       
|                                                    |               
|Net income (loss)                                   | $ 599,744     
|                                                    |               
|Basic income (loss) per share                       | $ 0.08        
|Diluted income (loss) per share                     | $ 0.08        

Selected consolidated financial data is presented below as of and for each of the years in the five-year period ended September 30, 2001.

|                                 | (Dollars in thousands, except per share data) |          
|-------------------------------- | --------------------------------------------- | ---------
|                                 | September 30,                                
|                                 | 2001                                          | 2000     
|Balance Sheet Data:              |                                               |          
|Total assets                     | $ 245,468                                     | 239,185  
|Loans receivable, net            | 187,526                                       | 193,645  
|Total investments                | 25,951                                        | 17,878   
|Deposits                         | 218,983                                       | 214,973  
|Borrowings                       | 5,500                                         | 4,500    
|Stockholders' equity             | 19,669                                        | 18,356   
|Book value per share             | 2.55                                          | 2.38     
|Number of shares outstanding     | 7,719,733                                     | 7,713,733
|                                 |                                               |          
|                                 | Year Ended September 30,                     
|                                
|                                 | 2001                                          | 2000     
|Income Statement Data:           |                                               |          
|Interest income                  | $ 20,252                                      | 19,932   
|Interest expense                 | 10,298                                        | 9,535    
|Net interest income              | 9,954                                         | 10,397   
|Provision for loan losses        | 435                                           | 2,640    
|Other income                     | 2,905                                         | 2,707    
|Other expense                    | 9,285                                         | 8,123    
|                                 |                                               |          
|Income before income taxes       | 3,139                                         | 2,341    
|                                 |                                               |          
|Income tax expense               | 1,131                                         | 909      
|                                 |                                               |          
|Net Income                       | $ 2,008                                       | 1,432    
|                                 |                                               |          
|Income per share                 |                                               |          
|Basic                            | $ 0.26                                        | 0.20     
|Fully Diluted                    | $ 0.26                                        | 0.19     
|                                 |                                               |          
|                                 | At or For Year Ended September 30,           
|                                
|                                
|                                 | 2001                                          | 2000     
|Other Data:                      |                                               |          
|Net income to average assets     | 0.82%                                         | 0.61%    
|Net income to average equity     | 10.37%                                        | 7.79%    
|Average equity to average assets | 7.90%                                         | 7.87%    
|Number of full-service offices   | 6                                             | 6        

General

First Georgia's net income depends on (a) its net interest income, which is the difference between its interest income from loans and investments and its interest expense on deposits and borrowings, (b) its non-interest income, which consists principally of fee income generated by First Georgia's retail banking operations, and (c) its non-interest expenses, such as employee salaries and benefits. Interest income on loans and investments (yield) is a function of the average balances outstanding during the period and the average rates earned. Interest expense (cost of funds) is a function of the average amount of deposits and borrowings outstanding during the period and average rates paid on such deposits and borrowings. Retail banking fee income, consisting mainly of recurring fees collected for deposit-related services rendered by the Bank, varies with the volume of the Bank's retail banking business. Non-interest expenses vary primarily with the number of employees, expansion of facilities and inflation.

Capital Resources

|First Georgia Bank                       |             
|---------------------------------------- | ------------
|Stockholder's equity                     | $ 21,628,000
|Less:                                    |             
|Intangible assets                        | 502,000     
|Tangible Capital                         | 21,126,000  
|Plus:                                    |             
|Qualifying intangible assets             | 502,000     
|Core capital                             | 21,628,000  
|Plus:                                    |             
|General allowance for loan losses        | 1,703,000   
|Less:                                    |             
|Deduction for loans greater than 80% LTV | 411,000     
|                                         |             
|Total capital                            | $ 22,920,000

Current regulations require financial institutions to have minimum regulatory tangible capital equal to 1.5% of adjusted assets, minimum core capital to adjusted assets of 4% (the leverage ratio), and risk-based capital to risk-adjusted assets of 8.0%. The minimum core capital or leverage ratio also may be increased by the Office of Thrift Supervision (the OTS) based on its assessment of the institution's risk management systems and the level of overall risk in the individual institution. At September 30, 2001 the Bank was in compliance with its minimum capital requirements.

The Bank's regulatory capital and the required minimum amounts, at September 30, 2001, are summarized in the following table.

|                   | Bank    |            | Required       |      | Excess      
|------------------ | ------- | ---------- | -------------- | ---- | ------------
|                   | Capital |            | Minimum Amount |      | (Deficiency)
|                   | %       | $          |                | %    | $           
|                   |         |            |                |      |             
|Tangible capital   | 8.62    | 21,126,000 |                | 1.50 | 3,674,000   
|Core capital       | 8.81    | 21,628,000 |                | 4.00 | 9,819,000   
|Risk-based capital | 11.17   | 22,920,000 |                | 8.00 | 16,421,000  

As of September 30, 2001, the Bank exceeded all the required minimum capital amounts as demonstrated by the chart above. The Bank had strong earnings during the year which helped to strengthen its capital position.

The Federal Deposit Insurance Corporation Improvement Act (FDICIA) requires Federal banking agencies to take "prompt corrective action" with respect to institutions that do not meet minimum capital requirements. In addition to the ratios described above, FDICIA introduced an additional capital measurement, the Tier 1 risk-based capital ratio. The Tier 1 ratio is the ratio of Tier 1 or core capital to total risk-adjusted assets. FDICIA establishes five capital tiers: "well capitalized," "adequately capitalized," "undercapitalized," "significantly undercapitalized," and "critically undercapitalized." The five capital tiers established by FDICIA and the regulator's minimum requirements for each are summarized below.



|                               | Risk-Based 
Capital Ratio  | Tier I Risk-Based Capital Ratio | Tier I 
Leverage Ratio
|------------------------------ | -------------------------- | ------------------------------- | ----------------------
|Well Capitalized               | 10% or above               | 6% or above                     | 5% or above           
|Adequately Capitalized         | 8% or above                | 4% or above                     | 4% or above           
|Undercapitalized               | Less than 8%               | Less than 4%                    | Less than 4%          
|Significantly Undercapitalized | Less than 6%               | Less than 3%                    | Less than 4%          
|Critically Undercapitalized    | -------------------------- | ----------------------          | 2% or less            

An institution may be deemed to be in a capitalization category lower than is indicated by its capital position based on safety and soundness considerations other than capital levels.

At September 30, 2001, the Bank's total risk-based ratio, tier 1 risk-based ratio, and leverage ratio were 11.17%, 10.54%, and 8.81%, respectively, placing the Bank in the well-capitalized category under FDICIA for each ratio.

Liquidity

The Bank's operational needs, demand for loan disbursements, and savings withdrawals can be met by loan principal and interest payments, new deposits and excess liquid assets. While significant loan demand, deposit withdrawal, increased delinquencies and increased foreclosed properties could alter this condition, the Bank has sufficient borrowing capacity through Federal Home Loan Bank advances and other short-term borrowings to manage such an occurrence. Management does not foresee any liquidity problems for fiscal 2002.

Asset/Liability Management

It is a policy of First Georgia not to originate for its own portfolio any fixed-rate residential mortgage loans that exceed 15 years. This allows First Georgia to better match the maturities of its assets and liabilities, thereby limiting interest rate risk. Similarly, the Bank emphasizes the origination of commercial real estate loans, construction loans, consumer loans and commercial loans with either adjustable rates or short maturities.

The interest rate sensitivity of the Bank's assets and liabilities provides an indication of the extent to which the Bank's net interest income may be affected by interest rate movements. The concept of interest rate sensitivity recognizes that certain assets and liabilities have interest rates that are subject to change prior to maturity. One method of measuring the impact of interest rate changes on net interest income is to measure, in a number of time frames, the interest sensitivity gap by subtracting interest rate sensitive liabilities from interest rate sensitive assets. A gap is considered positive when the amount of interest rate sensitive assets exceeds the amount of interest rate sensitive liabilities, and is considered negative when the amount of interest rate sensitive liabilities exceeds the amount of interest rate sensitive assets. Generally, during a period of rising interest rates, a negative gap would adversely affect net interest income while a positive gap would result in an increase in net interest income, while conversely during a period of falling interest rates, a negative gap would result in an increase in net interest income and a positive gap would negatively affect net interest income. To the extent that the gaps are close to zero, net interest income can be considered to be relatively immune from interest rate movements. The following table sets forth the Bank's interest-earning assets and interest-bearing liabilities at September 30, 2001. The information presented, however, may not be indicative of actual future trends of net interest income in rising or declining interest rate environments.

|                                      |                | Over One   | Over Five | Over     
|------------------------------------- | -------------- | ---------- | --------- | ---------
|                                      | One Year       | Through    | Through   | Ten      
|                                      | or Less        | Five Years | Ten Years | Years    
|                                      | (in thousands)
|Interest-earning assets (IEA's):      |                |            |           |          
|Investments                           | $ -            | 1,252      | 5,064     | 19,635   
|Interest earning deposits and         |                |            |           |          
|federal funds sold                    | 10,979         | -          | -         | -        
|Loans                                 | 87,342         | 39,921     | 10,677    | 52,000   
|Total                                 | 98,321         | 41,173     | 15,741    | 71,635   
|                                      |                |            |           |          
|Interest-bearing liabilities (IBL's): |                |            |           |          
|Demand deposits                       | $ 24,091       | -          | -         | -        
|Savings and money market deposits     | 23,010         | -          | -         | -        
|Other time deposits                   | 113,608        | 29,817     | -         | 7        
|Debt                                  | 2,500          | 1,000      | 2,000     | -        
|Total                                 | 163,209        | 30,817     | 2,000     | 7        
|                                      |                |            |           |          
|Interest sensitivity gap              | $ (64,888)     | 10,356     | 13,741    | 71,628   
|Cumulative gap                        | $ (64,888)     | (54,532)   | (40,791)  | 30,837   
|Ratio of IEA's to IBL's               | 0.60           | 1.34       | 7.87      | 10,233.57
|Cumulative ratio of IEA's to IBL's    | 0.60           | 0.72       | 0.79      | 1.16     

COMPARISON OF YEARS ENDED SEPTEMBER 30, 2001 AND 2000

Results of Operations

General First Georgia Holding, Inc. reported net income of $2,007,786, an increase of $576,131. This increase is due primarily to the decrease in the provision for loan losses of approximately $2,200,000 due to the reduction in net charge-offs and a reduction in loans outstanding. Net interest income after provision for loan losses increased $1,761,464. Other income increased $198,191 and other expenses increased $1,161,455. Several factors discussed below contributed to the increases and decreases in these areas.

Interest Income

Interest Expense

Yields Earned and Rates Paid



|                                            | Year Ended September 30, |      | At September 30,
|------------------------------------------- | ------------------------ | ---- | ----------------
|                                            | 2001                     | 2000 | 1999            
|Weighted average yield on:                  |                          |      |                 
|Loans                                       | 9.40                     | 9.58 | 9.13            
|Investment securities                       | 6.58                     | 6.42 | 6.55            
|Interest earning deposits and               |                          |      |                 
|federal funds sold                          | 4.70                     | 5.52 | 4.71            
|Total weighted average yield on all         |                          |      |                 
|interest earning assets                     | 9.05                     | 9.24 | 8.73            
|                                            |                          |      |                 
|Weighted average rate paid on:              |                          |      |                 
|Deposits                                    | 4.57                     | 5.73 | 4.38            
|Other borrowings                            | 6.12                     | 5.57 | 5.40            
|Federal Home Loan Bank advances             |                          |      |                 
|Short-term advances                         | 5.50                     | 7.90 | 6.21            
|Long-term advances                          | 5.90                     | 5.51 | 5.69            
|Total weighted average rate paid on all     |                          |      |                 
|interest-bearing liabilities                | 4.61                     | 4.49 | 4.46            
|                                            |                          |      |                 
|Weighted average interest rate spread       |                          |      |                 
|(spread between weighted average yield      |                          |      |                 
|on all interest-earning assets and rate     |                          |      |                 
|paid on all interest-earning liabilities)   | 4.44                     | 4.75 | 4.27            
|                                            |                          |      |                 
|Net yield on average interest-earning       |                          |      |                 
|assets (net interest income as a percentage |                          |      |                 
|percentage of average interest earning      |                          |      |                 
|assets)                                     | 4.44                     | 4.41 | 4.18            



Provision for Loan Losses

Other Income

Other Expenses

Income Tax Expense

Financial Condition

Assets Total assets of the Company increased $6,282,833 from September 30, 2000 to September 30, 2001. Increased investment balances were the driving force behind this increase, as the balances grew $8,072,556, or 45.15%. Loan demand decreased during the year. Loans receivable decreased $6,118,218 or 3.16%. This decrease is primarily attributable to the recent economic slow-down. The increased deposit balances resulted in an increase of $919,000 or 9.34% in the federal funds sold account. Premises and equipment increased $46,296, or .83%, primarily related to the purchase of new cubicle furniture for the Operations Department and the Loan Department located in the main branch on Gloucester Street.

Allowance for Loan Losses

The Bank has sustained substantial charge-offs during the years ended September 30, 2001 and 2000. Actual net charge-offs for 2001 were $385,227, a decrease of $1,125,635 over last year. Although net charge-offs decreased in 2001, Management believes, based on the number of non-accruing past due loans and the current economic situation that the increase in charge-offs will continue. Management believes the allowance is adequate to provide for probable losses at September 30, 2001.

The following tables illustrate the Bank's allowance for loan losses and its problem loans. When a loan has been past due ninety days or more, Management reevaluates the loan and its underlying risk elements to determine if it should be placed on non-accrual status. These loans are loans for which unpaid interest is not recognized into income. Past due loans are loans which are ninety days or more delinquent and still accruing interest.

ANALYSIS OF NON-ACCRUING AND PAST DUE LOANS



|Table 1                                  |               |             |             |             |            
|---------------------------------------- | ------------- | ----------- | ----------- | ----------- | -----------
|                                         | September 30,
|                                         |               |             |             |             |            
|                                         | 2001          | 2000        | 1999        | 1998        | 1997       
|Non-accruing Loans (1)                   |               |             |             |             |            
|Real estate                              |               |             |             |             |            
|Construction                             | $ 52,925      | $   211,769 | $       -   | $         - | $      -   
|First mortgage                           | 2,670,843     | 3,204,748   | 1,907,612   | 2,225,603   | 1,832,123  
|Second mortgage                          | 161,288       | 182,759     | 79,781      | 117,619     | 82,517     
|Consumer                                 | 655,854       | 121,057     | 21,672      | 21,214      | 44,781     
|Total non-accruing loans (3)             | 3,540,910     | 3,720,333   | 2,009,065   | 2,364,436   | 1,959,421  
|Past due loans (2)                       |               |             |             |             |            
|Real estate                              |               |             |             |             |            
|Construction                             | -             | -           | -           | -           | -          
|First mortgage                           | -             | -           | -           | -           | -          
|Second mortgage                          | -             | -           | -           | -           | -          
|Consumer                                 | -             | -           | -           | -           | -          
|Total past due loans                     | -             | -           | -           | -           | -          
|Total non-accruing and past due loans    | $ 3,540,910   | $ 3,720,333 | $ 2,009,065 | $ 2,364,436 | $ 1,959,421
|                                         |               |             |             |             |            
|Percentage of total loans                | 1.86%         | 1.90%       | 1.16%       | 101.16%     | 201.16%    
|                                         |               |             |             |             |            
|Real estate acquired through foreclosure | $    928,739  | $   314,338 | $   225,000 | $   225,001 | $   225,002
|                                         |               |             |             |             |            
|Total non-accruing and past due loans    |               |             |             |             |            
|and nonperforming assets.                | $ 4,469,649   | $ 4,034,671 | $ 2,234,065 | $ 2,589,437 | $ 2,184,423

(1)  Non-accruing loans are loans for which unpaid interest is not recognized into income. The effects ofcarrying non-accrual loans during 2001 resulted in a reduction of income of approximately $183,000. Actual interest income received on non-accrual loans totaled approximately $225,000 for the year ended September 30, 2001

ANALYSIS OF ALLOWANCE FOR LOAN LOSSES



|Table 2                           |               |             |             |             |            
|--------------------------------- | ------------- | ----------- | ----------- | ----------- | -----------
|                                  | September 30,
|                                  |               |             |             |             |            
|                                  | 2001          | 2000        | 1999        | 1998        | 1997       
|                                  |               |             |             |             |            
|Beginning balance                 | $ 2,364,704   | $ 1,235,566 | $ 968,632   | $ 1,012,322 | $ 955,288  
|Loans charged-off:                |               |             |             |             |            
|Real estate construction          | 7,639         | -           | -           | -           | -          
|Real estate mortgage              | 392,634       | 540,371     | 56,589      | 179,995     | 185,696    
|Consumer and other                | 310,252       | 1,112,939   | 242,560     | 63,762      | 162,520    
|                                  | 710,525       | 1,653,310   | 299,149     | 243,757     | 348,216    
|Recoveries:                       |               |             |             |             |            
|Real estate construction          | -             | -           | -           | -           | -          
|Real estate mortgage              | 213,924       | 11,344      | 860         | 78,084      | 32,939     
|Consumer and other                | 111,374       | 131,104     | 56,156      | 115,820     | 62,632     
|                                  | 325,298       | 142,448     | 57,016      | 193,904     | 95,571     
|                                  |               |             |             |             |            
|Net charge-offs                   | 385,227       | 1,510,862   | 242,133     | 49,853      | 252,645    
|                                  |               |             |             |             |            
|Provision charged to operations   | 435,000       | 2,640,000   | 509,067     | 6,163       | 309,679    
|                                  |               |             |             |             |            
|Balance at end of period          | $ 2,414,477   | $ 2,364,704 | $ 1,235,566 | $ 968,632   | $ 1,012,322
|Ratio of net charge-offs to       |               |             |             |             |            
|average loans outstanding         | 0.20%         | 0.78%       | 0.15%       | 0.03%       | 0.20%      
|                                  |               |             |             |             |            
|Ratio of allowance to total loans | 1.27%         | 1.21%       | 0.71%       | 0.64%       | 0.73%      



Liabilities

Other borrowed funds remains at $2,000,000 for the year ended September 30, 2001. Due to the increase in Federal Home Loan Bank advances and deposit balances, the bank did not increase its position in other borrowed funds.

COMPARISON OF YEARS ENDED SEPTEMBER 30, 2000 AND 1999

Results of Operations

General First Georgia Holding, Inc. reported net income of $1,431,655 a decrease of $788,399. This decrease is due primarily to the increase in provision for loan losses of $2,130,933. Net interest income after provision for loan losses increased $23,012. Other income decreased $187,551 and other expenses increased by $1,136,898. Several factors as discussed below contributed the increases and decreases in these areas.

Interest Income

Interest Expense

Other Income

Other Expenses

Income Tax Expense

Financial Condition

Total assets of the Company increased $34,889,662 from September 30, 2000 to September 30, 1999. Loans were the driving force behind this increase, as the net balances grew $20,447,785, or 11.81%. Loan demand remained strong throughout fiscal 2000, and management took advantage of this demand by offering competitive loan products and exceptional service. The increased deposit balances primarily funded the loan growth. The Bank did not have to extensively borrow on its existing federal funds line to meet the loan demand. Accordingly, federal funds sold increased $9,840,000. During the year, the Bank purchased more investments to hedge against any adverse rate conditions, which resulted in an increase in investment balances of $3,436,063, or 23.79%. Premises and equipment increased $669,157, or 13.65%, primarily due to the acquisition of land and materials for the new office located near the Colonial Mall of Brunswick, which opened in April of fiscal 2000 and the construction of a new location for the Information Technology department set to be complete by January 2001.

Total deposits increased $40,872,355, or 23.60%. Much of this increase was in non-interest bearing deposits, as the Bank offers free checking to its customers. The Bank is well positioned to take advantage of the growing local market. With the increase in deposits, the Bank was able to decrease its position in FHLB advances. The balance of FHLB advances decreased $6,100,000 during the year ended September 30, 2000 as compared with the year ended September 30, 1999. The federal funds purchased account also decreased $2,860,000. Due to the increased deposit levels the Bank was able to sell federal funds on a regular basis during the year.

Other borrowed funds increased $2,000,000 during the year ended September 30, 2000. This increase is due to the line of credit obtained by First Georgia Holding Company, Inc. from the Bankers Bank for up to $3,000,000. As of September 30, 2000, the Company had borrowed $2,000,000 against this line of credit. The interest is payable quarterly and all of the shares of issued and outstanding stock of First Georgia Bank are pledged as collateral for this line of credit.

EFFECTS OF INFLATION AND CHANGING PRICES

First Georgia's consolidated financial statements and related data presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America, which require the measurement of financial position and operating results in terms of historical dollars, without considering changes in the relative purchasing power of money over time due to inflation. Unlike industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates have a more significant impact on a financial institution's performance than the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or in the same magnitude as the prices of goods and services. Non-interest expenses, however, do reflect general levels of inflation.

Shareholder Information

A limited trading market has developed in the Company's common stock which is quoted on the NASDAQ (National Association of Securities Dealers Automated Quotation) National Market System under the symbol "FGHC." Set forth below are the high and low sales prices of the Company's common stock for each full quarterly period since October 1999. Such prices reflect inter-dealer prices, without retail mark-up, mark-down, or commission, and may not represent actual transactions.



|Quarterly Period            | High | Low 
|--------------------------- | ---- | ----
|                            |      |     
|October 1 December 31, 1999 | 6.00 | 4.50
|January 1 March 31, 2000    | 5.13 | 3.50
|April 1 June 30, 2000       | 5.31 | 4.00
|July 1 September 30, 2000   | 5.00 | 3.69
|October 1 December 31, 2000 | 4.50 | 3.63

*On May 20, 1999, the Company effected a 50% stock dividend in the form of a 3 for 2 stock split.

At November 1, 2001, the Company had 364 shareholders of record. The Company paid cash dividends of $0.04 per share in February 2001 and $0.04 per share in September 2001. The primary source of funds available to the Company is the payment of dividends by the Bank. Banking regulations limit the amount of dividends that may be paid without prior approval of the Bank's regulators. Approximately $2,000,000 was available to be paid as dividends by the Bank to the Company at September 30, 2001 upon regulatory approval.



|OFFICES                                                       
|--------------------------------------------------------------
|1703 Gloucester Street Brunswick, GA 31520 (912) 267-7283     
|2461 Demere Road St. Simons Island, GA 31522 (912) 638-7118   
|2001 Commercial Drive South Brunswick, GA 31525 (912) 262-1500





|OTHER INFORMATION                                                                 
|----------------------------------------------------------------------------------
|Transfer Agent: 
First Georgia Bank 1703 Gloucester Street Brunswick, GA 31520    
|Legal Counsel: 
James A. Bishop Suite 40 Bank of America Plaza Brunswick, GA 31520





|DIRECTORS AND OFFICERS                                              
|--------------------------------------------------------------------
|FIRST GEORGIA HOLDING, INC.                                         
|OFFICERS                                                            
|HENRY S. BISHOP Chairman and President, Chief Executive Officer     
|                                                                    
|                                                                    
|DIRECTORS                                                           
|HENRY S. BISHOP Chairman of the Board, President, First Georgia Bank
|TERRY DRIGGERS President, Driggers Construction Company             
|JAMES D. MOORE President, J.D. Moore, Inc.                          
|FIRST GEORGIA BANK, BRUNSWICK                                       
|HENRY S. BISHOP Chairman, President and CEO                         
|JUDY DIXON Vice President                                           
|LAURA D. FRIEND Vice President                                      
|DIANE SHARP Vice President                                          
|April Jones Assistant Vice President                                
|LAURA LEE Assistant Vice President                                  
|RITA BOATRIGHT Assistant Vice President                             





|FIRST GEORGIA BANK, ALTAMA 
|---------------------------
|ELZIE JACOBS Vice President





|FIRST GEORGIA BANK, ST. SIMONS ISLAND
|-------------------------------------
|MEL BAXTER Senior Vice President     





|FIRST GEORGIA BANK, COLONIAL MALL
|---------------------------------
|MERLENE BURGESS Vice President   





|FIRST GEORGIA BANK, NORTH BRUNSWICK
|-----------------------------------
|FRED ALEXANDER Vice President      





|FIRST GEORGIA BANK, WAYCROSS
|----------------------------
|PAM TAYLOR Vice President   

EXHIBIT 23

Consent of Deloitte & Touche LLP

Certified Public Accountants

INDEPENDENT AUDITORS' CONSENT

The Board of Directors

First Georgia Holding, Inc.

We consent to the incorporation by reference in Registration Statements (N0.33-62245 and No. 33-62249) of First Georgia Holding, Inc. on Form S-8 of our report dated November 20, 2001, appearing in and incorporated by reference in this Annual Report on Form 10-KSB of First Georgia Holding, Inc. for the year ended September 30, 2001.

/s/ Deloitte & Touche LLP

Certified Public Accountants

Jacksonville, Florida

December 27, 2001