<PAGE>

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

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

                  For the Fiscal Year Ended December 31, 2000

                        Commission File Number 0-27448

                     GOLDEN ISLES FINANCIAL HOLDINGS, INC.

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

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

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

Check whether the Registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
twelve months (or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes X   No _____
                 ---

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

The Registrant's revenues for the fiscal year ended December 31, 2000 were
$12,940,796.00.

The aggregate market value of the Common Stock of the Registrant held by
nonaffiliates of the Registrant on February 16, 2001, was $15,819,700.00.  The
aggregate market value of the Common Stock held by nonaffiliates was computed by
reference to the fair market value of $6.50 per share of the Company's Common
Stock as of February 16, 2001, as reported on NASDAQ, on which the Company's
Common Stock is traded.  For the purpose of this response, directors, officers
and holders of 5% or more of the Registrant's Common Stock are considered the
affiliates of the Registrant at that date.  The number of shares outstanding of
the Registrant's Common Stock as of February 16, 2001:  2,433,800 shares of no
par value Common Stock.

Transitional Small Business Disclosure Format:  Yes ____   No  X
                                                              ---
<PAGE>

DOCUMENTS INCORPORATED BY REFERENCE:  NONE.

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

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

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

                                      2
<PAGE>

                     GOLDEN ISLES FINANCIAL HOLDINGS, INC.

                         ANNUAL REPORT ON FORM 10-KSB
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

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

1.  Description of Business ...............................................    4
2.  Description of Property ...............................................   18
3.  Legal Proceedings .....................................................   19
4.  Submission of Matters to a Vote of Security Holders ...................   19


                                    PART II

5.  Market for Common Equity and Related Stockholder Matters ..............   20
6.  Management's Discussion and Analysis of Results of Operations and
    Financial Conditions ..................................................   21
7.  Consolidated Financial Statements .....................................   36
8.  Changes in and Disagreements with Accountants on Account
    and Financial Disclosure ..............................................   67

                                   PART III

9.  Directors, Executive Officers, Promoters and Control Persons;
    Compliance with Section 16(a) of the Exchange Act .....................   67
10. Executive Compensation ................................................   70
11. Stock Ownership of Certain Beneficial Owners and Management ...........   74
12. Certain Relationships and Related Transactions ........................   77

                                    PART IV

13. Exhibit List and Reports on Form 8-K ..................................   78
</TABLE>

                                       3
<PAGE>

                                    PART I

Item 1.  Description of Business

A.   Business Overview.

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

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

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

In September, 1993, the Company received approval from the Federal Reserve Board
to establish and operate First Credit Service Corporation ("FCC"), as a wholly-
owned subsidiary of GIFH, to engage in originating, making, acquiring and
servicing consumer loans, as well as offering credit-related insurance on such
loans. FCC has, since then, engaged in the consumer loan business. As of
December 31, 1996, FCC had six Georgia offices, in Brunswick, Kingsland,
Savannah, Waycross, Martinez, and Garden City. The Waycross and Garden City
offices of FCC, however, were closed respectively, in December and September,
1997, and FCC continued to conduct its operations from its Brunswick, Savannah,
Martinez, and Kingsland, Georgia, offices. In August, 1998, substantially all of
the assets of FCC were sold and GIFH discontinued the operations of FCC.

                                       4
<PAGE>

Beginning May 31, 1994, the Company conducted a secondary public offering of
securities (the "Secondary Offering") pursuant to which GIFH offered for sale a
minimum of 769,832 and a maximum of 1,538,462 units (the "Units") at a price of
$6.50 per Unit. Each Unit consisted of one share of Common Stock of GIFH and one
non-detachable Class A Warrant to purchase one share of the Common Stock. Each
Class A Warrant expired on May 31, 1998, and entitled the holder to purchase an
additional share of the Common Stock at a price of $7.25 if exercised on or
before May 31, 1996, $8.25 if exercised on or before May 31, 1997, and $9.50 if
exercised on or before May 31, 1998. The Secondary Offering closed as of March
31, 1995. GIFH accepted subscriptions for a total of 897,230 Units, and received
total proceeds in connection with such subscriptions amounting to $5,831,995.
The proceeds were held in escrow until May 11, 1995, when $5,500,000 was
released from escrow to GIFH. The balance of the proceeds held in escrow was
released to GIFH on July 25, 1995. In 1996, the Company received $53,077
pursuant to the exercise of 7,321 Class A warrants at $7.25 per share. In 1997,
no Class A warrants were exercised, so the Company received no money therefrom.
In 1998, 149,970 shares were exercised from these warrants at $9.50 each. The
Company received $1,434,552 from the exercise of these warrants and incurred
$9,837 in related expense. Unexercised warrants expired May 31, 1998 and the
former units are now shares of common stock traded on the NASDAQ national market
under the symbol GIFH.

On February 21, 2001, ABC Bancorp ("ABC") announced that it had entered into a
definitive Agreement and Plan of Merger dated as of February 20, 2001 (the
"Merger Agreement") with Golden Isles Financial Holdings, Inc., a Georgia
corporation and registered bank holding company ("Golden Isles"), pursuant to
which, among other things, Golden Isles will merge with and into ABC, and The
First Bank of Brunswick, a Georgia state-chartered bank and wholly-owned
subsidiary of Golden Isles, shall thereupon become a wholly-owned subsidiary of
ABC (the "Merger").

As a result of the Merger, all of the issued and outstanding shares of the
common stock, no par value per share, of Golden Isles (the "Golden Isles Common
Stock") and all outstanding options to purchase shares of Golden Isles Common
Stock shall be converted into the right to receive an aggregate consideration
(the "Merger Consideration") equal to (a) $10,237,960.00 in cash (the "Cash
Consideration") and (b) 1,241,204 shares (the "Stock Consideration") of the
common stock, $1.00 par value per share, of ABC (the "ABC Common Stock");
provided, however, that if the closing price per share of the ABC Common Stock -
for the 30 highest-volume trading days during the 60-day period ending five
calendar days prior to the closing date of the Merger (the "Average Price") is
higher than $12.00, then the Merger Consideration will be reduced by (i)
reducing the Cash Consideration by an amount equal to one-half of the difference
between the value of the Stock Consideration at the Average Price and the value
of the Stock Consideration at $12.00 per share, and (ii) reducing the Stock
Consideration by a number of shares equal to one-half of the difference between
the value of the Stock Consideration at the Average Price and the value of the
Stock Consideration at $12.00 per share, divided by the Average Price. The
Merger Agreement also provides that the Board of Directors of Golden Isles may
terminate the Merger Agreement and the Merger if the Average Price is higher
than $14.00 per share or lower than $8.00 per share.

The Merger is intended to constitute a reorganization under Section 368(a) of
the Internal Revenue Code of 1986, as amended, and will be accounted for as a
purchase transaction. The consummation

                                       5
<PAGE>

of the Merger is subject to (i) the approval of the Board of Governors of the
Federal Reserve and the Georgia Department of Banking and Finance, (ii) the
approval by the shareholders of Golden Isles, and (iii) the satisfaction or
waiver of customary conditions.

In connection with the Merger Agreement, the members of the Board of Directors
of Golden Isles, who together beneficially directly and indirectly own
approximately 27% of the issued and outstanding shares of Golden Isles Common
Stock, have executed and delivered to ABC irrevocable proxies pursuant to which,
among other things, they agreed to vote their shares of Golden Isles Common
Stock in favor of the Merger.

B.   Business Operations.

The Holding Company (GIFH)

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

The First Bank of Brunswick (the Bank)

The Bank conducts a general commercial and retail banking business, emphasizing
in its marketing the Bank's local management and ownership. The Bank accepts
demand, savings, and time deposits of individuals, partnerships and corporations
and offers commercial and retail checking accounts, Super NOW accounts, money
market accounts, individual retirement accounts and certificates of deposit. The
Bank makes various types of level term and installment loans, both personal and
commercial, and makes and services long-term mortgage loans as well as
individual and business loans. The Bank acts as an issuing agent for U.S.
savings bonds, traveler's checks, money orders and cashier's checks, and it
offers collection teller services, including wire transfer services. The Bank
also offers safe deposit boxes and a night depository facility. In 2000, the
Bank began offering the sale of nondeposit investment and annuity products
through Raymond James Financial Services, Inc. The Bank provides these services
from its main office in Brunswick, Georgia, and its branches in North Glynn
County, Jekyll Island, and St. Simons Island, Georgia. Bank deposits are insured
by the Federal Deposit Insurance Corporation ("FDIC"), up to applicable limits.

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

                                       6
<PAGE>

(the "Center") in Brunswick, which processed approximately 19,350 law
enforcement officers in 1996. The Center employs approximately 1,600 people.

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

The Bank competes with other commercial banks, savings and loan associations,
credit unions, mortgage banking companies, consumer finance companies,
securities brokerage firms, insurance companies, money market mutual funds, and
other financial institutions. As of December 31, 2000, there were a total of
eight (8) FDIC-insured institutions operating in the Glynn County markets.
Management estimates that as of June 30, 2000, FDIC-insured deposits in Glynn
County totaled approximately $893 million, with the Bank having approximately
13.6% of such deposits.

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

First Bank Mortgage Corporation (FBMC)

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

First Credit Service Corporation (FCC)

Since its inception in September 1993, FCC engaged in the consumer finance
business, i.e., it originates, makes, acquires, and services consumer loans, as
well as offers credit related insurance on such loans, to the general public.
The primary areas serviced by FCC from its four offices were Glynn, Camden,
Columbia, and Chatham Counties, Georgia. In August, 1998, GIFH sold
substantially all of the assets of FCC and discontinued operations of the
Company. The Company sold substantially all the assets of its subsidiary, First
Credit Service Corporation, on August 14, 1998 pursuant to an Asset Purchase
Agreement dated August 11, 1998 by and among First Credit Service

                                       7
<PAGE>

Corporation ("FCC"); Golden Isles Financial Holdings, Inc. and New South
Financial Services, Inc. ("New South"). The acquisition was initially closed on
August 14, 1998 and pursuant to paragraph 3.2 of the Asset Purchase Agreement,
New South paid to FCC $9,365,120.00 as the "Estimated Purchase Price." Ten days
thereafter pursuant to Section 3.3(b) of the Asset Purchase Agreement, the
purchase price was increased by $89,922.00. Additionally FCC sold some loans,
leases and personal property that were not purchases by new South to another
party for $128,134.68. The assets sold to New South and the other party were all
loans of FCC, personal property of FCC located in the Savannah, Martinez,
Brunswick, and Kingsland branch of FCC, certain itemized contracts, all records
relating to purchased assets of FCC and all insurance contracts relating to
loans purchased.

C.  Employees.

As of December 31, 2000, GIFH and its subsidiaries employed the equivalent of 65
full-time employees. Management believes that its employee relations are good.
There are no collective bargaining agreements covering any of the employees.

D.  Supervision and Regulation.

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

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

Regulation of the Company.

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

    Reporting and Examination.

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

                                       8
<PAGE>

determine whether the Company is in compliance with Bank Holding Company Acts
and regulations promulgated thereunder.

     Acquisitions.

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

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

     Source of Strength to Subsidiary Banks.

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

     Capital Requirements.

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

     The Federal Reserve also requires the maintenance of minimum capital
leverage ratios to be used in tandem with the risk-based guidelines in assessing
the overall capital adequacy of bank

                                       9
<PAGE>

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

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

     As of December 31, 2000, GIFH maintained Tier 1 and Total Risk Based
Capital Ratios of 13.8% and 15.0% respectively. For a more detailed analysis of
the Company's capital and comparison to regulatory requirements see Item 6 and
Note 14 to the Consolidated Financial Statements in Item 7 below.

     The Riegle-Neal Interstate Banking and Branching Efficiency Act.

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

     While the Riegle-Neal Act precludes a state from entirely insulating its
banks from acquisition by an out-of-state holding company, a state may still
provide that a bank may not be acquired by an out-of-state company unless the
bank has been in existence for a specified number of years, not to exceed five
years. Additionally, the Federal Reserve is directed not to approve an
application for the acquisition of a bank across state lines if: (i) the
applicant bank holding company, including all

                                      10
<PAGE>

affiliated insured depository institutions, controls or after the acquisition
would control, more than ten (10) percent of the total amount of deposits of all
insured depository institutions in the United States (the "ten percent
concentration limit") or (ii) the acquisition would result in the holding
company controlling thirty (30) percent or more of the total deposits of insured
depository institutions in any state in which the holding company controlled a
bank or branch immediately prior to the acquisition (the "thirty percent
concentration limit"). States may waive the thirty percent concentration limit,
or may make the limits more or less restrictive, so long as they do no
discriminate against out-of-state bank holding companies.

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

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

     A bank resulting from an interstate merger transaction may retain and
operate any office that any bank involved in the transaction was operating
immediately before the transaction. After completion of the transaction, the
resulting bank may establish or acquire additional branches at any location
where any bank involved in the transaction could have established or acquired a
branch. The Riegle-Neal Act also provides that the appropriate federal banking
agency may approve an application by a bank to establish and operate an
interstate branch in any state that has in effect a law that expressly permits
all out-of-state banks to establish and operate such a branch.

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

The Gramm-Leach-Bliley Act of 1999

     The Gramm-Leach-Bliley Act (the "GLB Act") dramatically increases the
ability of eligible banking organizations to affiliate with insurance,
securities, and other financial firms and insured depository institutions. The
GLB Act permits eligible banking organizations to engage in activities

                                      11
<PAGE>

and to affiliate with nonbank firms engaged in activities that are financial in
nature or incidental to such financial activities, and also includes some
additional activities that are complementary to such financial activities.

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

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

     Since the Bank Holding Company Act of 1956, and its subsequent amendments,
federal law has limited the types of activities that are permitted for a bank
holding company, and it is has also limited the types of companies that a bank
holding company can control. The GLB Act retains the bank holding company
regulatory framework, but adds a new provision that authorizes enlarged
authority for the new financial holding company form of organization to engage
in any activity of a financial nature or incidental thereto. A new Section 4(k)
of the Bank Holding Company Act provides that a financial holding company may
engage in any activity, and may acquire and retain shares of any company engaged
in any activity, that the Federal Reserve Board in coordination with the
Secretary of the Treasury determines by regulation or order to be financial in
nature or incidental to such financial activities, or is complementary to
financial activities.

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

     There are three special criteria to qualify for the enlarged activities and
affiliation. First, all the depository institutions in the bank holding company
organization must be well-capitalized. Second, all of the depository
institutions of the bank holding company must be well managed. Third, the bank
holding company must have filed a declaration of intent with the Federal Reserve
Board stating that it intends to exercise the expanded authority under the GLB
Act and certify to the Federal Reserve Board that the bank holding company's
depository institutions meet the well-capitalized and

                                      12
<PAGE>

well managed criteria. The GLB Act also requires the bank to achieve a rating of
satisfactory or better in meeting community credit needs at the most recent
examination of such institution under the Community Reinvestment Act.

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

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

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

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

Regulation of the Bank.

     As a state-chartered bank, the Bank is examined and regulated by the
Federal Deposit Insurance Corporation ("FDIC") and the Georgia Department. The
major functions of the FDIC with respect to insured banks include paying
depositors to the extent provided by law in the event an insured bank is closed
without adequately providing for payment of the claim of depositors, acting as a
receiver of state banks placed in receivership when so appointed by state
authorities, and preventing the continuance or development of unsound and unsafe
banking practices. In addition, the FDIC also approves conversions, mergers,
consolidations, and assumption of deposit liability transactions between insured
banks and noninsured banks or institutions to prevent capital or surplus
diminution in such transactions where the resulting, continued or assumed bank
is an insured nonmember state bank.

     Subsidiary banks of a bank holding company are subject to certain
restrictions imposed by the Federal Bank Holding Company Act on any extension of
credit to the bank holding company or any

                                      13
<PAGE>

of its subsidiaries, on investment in the stock or other securities thereof and
on the taking of such stock or securities as collateral for loans to any
borrower. In addition, a bank holding company and its subsidiaries are
prohibited from engaging in certain tie-in-arrangements in connection with any
extension of credit or provision of any property or services.

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

     1.   the total classified assets at the most recent examination of such
bank do not exceed 80% of Tier 1 capital plus Allowance for Loan Losses as
reflected at such examination;
     2.   the aggregate amount of dividends declared or anticipated to be
declared in the calendar year does not exceed 50% of the net profits, after
taxes but before dividends, for the pervious calendar year; and
     3.   the ratio of Tier 1 Capital to Adjusted Total Assets shall not be less
than six (6) percent.

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

Expansion through Branching, Merger or Consolidation.

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

     1.   in adjacent counties in certain situations, or
     2.   by means of merger or consolidation with a bank which has been in
existence for at least five years.

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

Capital Requirements.

     The FDIC adopted risk-based capital guidelines that went into effect on
December 31, 1990 for all FDIC insured state chartered banks that are not
members of the Federal Reserve System.

                                      14
<PAGE>

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

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

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

FDIC Insurance Assessments.

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

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

     To arrive at risk-based assessments, the FDIC places each bank in one of
nine risk categories using a two step process based on capital ratios and on
other relevant information.  Each bank is assigned to one of three groups: (i)
well capitalized, (ii) adequately capitalized, or (iii) under capitalized, based
on its capital ratios.  The FDIC also assigned each bank to one of three
subgroups

                                      15
<PAGE>

based upon an evaluation of the risk posed by the bank. The three subgroups
include (i) banks that are financially sound with only a few minor weaknesses,
(ii) banks with weaknesses which, if not corrected, could result in significant
deterioration of the bank and increased risk to the BIF, and (iii) those banks
that pose a substantial probability of loss to the BIF unless corrective action
is taken. FDICIA imposes progressively more restrictive constraints on
operations management and capital distributions depending on the category in
which an institution is classified. As of December 31, 1998, the Bank met the
definition of a well-capitalized institution, and will be assessed accordingly
for 1998.

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

Community Reinvestment Act.

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

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

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

     In addition, a financial institution will have the option of having its CRA
performance evaluated based on a strategic plan of up to five years in length
that it had developed in cooperation

                                      16
<PAGE>

with local community groups. In order to be rated under a strategic plan, the
institution will be required to obtain the prior approval of its federal
regulator.

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

Proposed Legislation.

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

Monetary Policy.

     The results of operations of the Company and the Bank are affected by
credit policies of monetary authorities, particularly the Federal Reserve. The
instruments of monetary policy employed by the Federal Reserve include open
market operations in U.S. Government securities, changes in the discount rate on
member bank borrowings, changes in reserve requirements against member bank
deposits and limitations on interest rates which member banks may pay on time
and savings deposits. In view of the changing conditions in the foreign and
national economy, as well as the effect of policies and actions taken by
monetary and fiscal authorities, including the Federal Reserve, no prediction
can be made as to possible future changes in interest rates, deposit levels,
loan demand or the business and earnings of the Company.

Competition.

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

                                      17
<PAGE>

Item 2.   Description of Property.

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

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

In September 1996, FBMC moved its corporate offices from the Bank's St. Simons
Island facility into an approximately 8,000 square foot office located at 777
Gloucester Street, Suite 300, Brunswick, Georgia 30512. These offices were
subject to a two-year lease which expired in August 1998. As part of the
restructuring of the Company's mortgage lending operations discussed in Item 1
above, FBMC closed its corporate offices in the fourth quarter of 1996 and
vacated the Gloucester Street premises. During 1998, the Company completed
restructuring of its mortgage banking activities. All mortgage banking
activities were reorganized within the bank. Remaining assets of FBMC were sold
and operations discontinued.

FCC's corporate offices were located at 3423 Fourth Street, Building 5, Unit B,
Brunswick, Georgia 31520. Those offices were subject to a three-year lease
ending in August, 1998, FCC leased on a month-to-month basis and vacated in
October 1998. FCC conducted business out of various office/retail spaces on
either a month-to-month basis or subject to term leases. FCC offices in
Savannah, Martinez, Kingsland and Brunswick were vacated and all leases
terminated without additional liability.

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

In November 1999, the Bank purchased 1.3 acres of property in north Glynn County
located at 5340 New Jesup Highway. During December 1999 the Bank applied for
consent to establish a full-service branch office. Approval for the branch
application was obtained from the FDIC and the Georgia Department of Banking and
Finance in January 2000. A temporary facility opened on the site in

                                      18
<PAGE>

April 2000 which was replaced by a permanent building in October 2000. The total
cost was approximately $1.6 million.

During July 2000, the Bank successfully bid to provide banking services for the
Jekyll Island Authority at a leased facility on Jekyll Island, Georgia. The Bank
obtained approval from the necessary regulatory authorities in August 2000. A
full service branch was opened in the leased location on Jekyll Island in
October 2000. The lease is for a period of five years at a rate of $28,000
annually.

Item 3.   Legal Proceedings.

The Company is party to an outstanding lawsuit filed by Fleet Mortgage Corp.,
plaintiff, against First Bank Mortgage Corporation and Golden Isles Financial
Holdings, Inc. being Civil Action No. 00-CP-40-4033 in the Court of Common
Pleas, Fifth Judicial Circuit, Richmond County, South Carolina. Plaintiff
contends a mortgage sold to it by First Bank Mortgage Corporation was supported
by an improper appraisal resulting in $140,000.00 in damages for which plaintiff
demands judgment. The defendants have answered and deny they are indebted to
plaintiff.

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

No matter was submitted to a vote of security-holders during the fourth quarter
of fiscal 2000 covered by this report.

                                      19
<PAGE>

                                    PART II

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

Before April 18, 1996, there was no established market in which shares of GIFH's
Common Stock were regularly traded, nor was there any uniformly quoted prices
for such shares. However, on April 18, 1996, the Company Common Stock began to
be traded on the NASDAQ Small Capitalization market (NASDAQ-"GIFH") and the
former Units were traded under the symbol GIFHU. On May 31, 1998 the warrants
attached to the units expired and the trading of the common stock was
consolidated under the one symbol GIFH. The high-low range for trades in the
Company's Common Stock, for each quarter during 1999 and 2000 in which trades
were reported, were as follows:

                              2000
    QUARTER              COMMON STOCK
                     High         Low
    1st               6.875       6.00
    2nd               8.00        6.0312
    3rd               7.125       6.00
    4th               7.00        5.50

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

As of February 16, 2001, 2,433,800 shares of GIFH's Common Stock were issued and
outstanding to approximately 730 holders of record.

GIFH paid dividends in 2000 in the amount of $197,624 or .08 cents per share. As
discussed in Item 1 above, the Bank's ability to pay dividends is subject to
numerous statutory conditions. Thus, to the extent the source of dividends to be
paid by GIFH is dividends from the Bank, GIFH may or may not pay dividends in
the near future.

                                      20
<PAGE>

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

General

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

Results From Operations For Years Ended December 31, 2000 and 1999

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

Net Interest Income

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

      The Company's net interest margin decreased two basis points to 4.09% in
2000 as compared to 4.11% in 1999. The yield on average interest-earning assets
increased 43 basis points or 5.02% to 9.00% in 2000 as compared to 8.57% in
1999. The interest rate paid on average interest-bearing liabilities increased
46 basis points or 8.76% to 5.71% in 2000 as compared to 5.25% in 1999. As a
result of the disproportionate increase in the average interest paid on
interest-bearing liabilities as compared with the average rate earned on
interest-earning assets, the interest rate spread decreased three basis points
to 3.29% in 2000 as compared to 3.32% in 1999. A significant increase in volume
of interest-earning assets and interest-bearing liabilities resulted in an
increase in net interest income of $583,000 or 11.88% to $5,491,000 in 2000 as
compared to $4,908,000 in 1999, representing an increase of $708,000 or 14.43%
due to volume and a decrease of $125,000 or 2.55% due to changes in interest
rates.

      Average interest-earning assets increased $14,801,000 or 12.39%% to
$134,293,000 in 2000 from $119,492,000 in 1999. Average loans increased
$17,850,000; average investments decreased $1,504,000; average Federal funds
sold decreased $1,734,000; and average interest-bearing deposits in banks
increased $189,000. The increase in average interest-earning assets was funded
by an increase of $11,915,000 or 11.33% in average deposits to $117,049,000 in
2000 from $105,134,000 in 1999. Approximately 90% of the total increase in
deposits represented an increase in time deposits for which the average interest
rate paid on such deposits increased 61 basis points or 10.68% over the average
rate paid in 1999. This shift in time deposits with increased interest rates
contributed to the overall increase in average interest rate paid on interest-
bearing deposits of 46 basis points or 8.76% in 2000 over 1999. Approximately
9.67% and 9.43% of the average deposits were noninterest-bearing deposits in
2000 and 1999, respectively.

                                      21
<PAGE>

Allowance for Loan Losses

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

         The provision for loan losses is a charge to earnings in the current
period to replenish the allowance and maintain it at a level management has
determined to be adequate. The provision for loan losses charged to earnings
amounted to $335,000 in 2000 as compared to $1,470,000 in 1999, representing a
decrease of 77% in the provision. The significant provision charged to earnings
in 1999 resulted from the replenishment of $736,000 for net charge-offs during
the year and the addition of $886,000 to cover an increase in average loans
during the year and to cover an increase in nonperforming loans of approximately
$938,000 in 1999. The allowance for loan losses as a percentage of total loans
outstanding amounted to 1.94% at December 31, 2000 as compared to 2.60% at
December 31, 1999.

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

Noninterest Income

         Noninterest income amounted to $856,000 and $698,000 for the years
ended December 31, 2000 and 1999, respectively. As a percent of total average
assets, noninterest income increased to .61% in 2000 from .56% in 1999.

         Following is a summary of noninterest income for the years ended
December 31, 2000 and 1999.

<TABLE>
<CAPTION>
                                                                                                   2000             1999
                                                                                             ---------------   --------------
              <S>                                                                            <C>               <C>
              Noninterest income
                 Income from origination of mortgage loans, less related expenses            $      169,000    $     170,000
                 Service charges on deposit accounts                                                475,000          440,000
                 Net realized gain on sales of securities                                                 -            8,000
                 Other                                                                              212,000           80,000
                                                                                             --------------    -------------
                            Total noninterest income                                         $      856,000    $     698,000
                                                                                             ==============    =============
</TABLE>

         The increase in service charges on deposit accounts of $35,000 or 7.95%
to $475,000 in 2000 from $440,000 in 1999 resulted from an increase in average
deposits on which service charges are earned. The increase in other noninterest
income was attributable primarily to other real estate owned transactions.

Noninterest Expense

         Noninterest expense amounted to $4,419,000 and $3,704,000 for the years
ended December 31, 2000 and 1999, respectively, representing an increase of
$715,000 or 19.30%. As a percent of total average assets, noninterest expense
amounted to 3.14% in 2000 as compared to 2.95% in 1999.

         Following is a summary of noninterest expense for the years ended
December 31, 2000 and 1999.

<TABLE>
<CAPTION>
                                                                   2000                1999
                                                              --------------       -------------
             <S>                                              <C>                  <C>
             Noninterest expense
                Salaries and employee benefits                $    2,440,000       $   2,085,000
                Equipment and occupancy expense                      659,000             559,000
                Advertising and business development                 176,000             160,000
                Legal and professional                               252,000             220,000
                Supplies and printing                                231,000             154,000
                Other operating expenses                             661,000             526,000
                                                              --------------       -------------
                           Total noninterest expense          $    4,419,000       $   3,704,000
                                                              ==============       =============
</TABLE>

                                      22
<PAGE>

Noninterest Expense (Continued)

         Salaries and employee benefits increased $355,000 to $2,440,000 in 2000
from $2,085,000 in 1999, representing an increase of 17.03%. The increase in
salaries and employee benefits is the result of an increase in the average
number of full-time equivalent employees of the Bank from 50 in 1999 to 65 in
2000, a 30% increase. Equipment and occupancy expense increased $100,000 or
17.89% to $659,000 in 2000 as compared to $559,000 in 1999 . The increase in
occupancy expense was attributable to the opening of two new branches in 2000.
The opening of the two new branches also accounted for increases in supplies and
printing expense. All other noninterest expenses increased $151,000 during 2000.

         For the year ended December 31, 2000, the Company realized net income
from operations of $1,082,000 as compared to net income from operations of
$275,000 for the year ended December 31, 1999. Net income for 1999 was adversely
affected by the significant provision for loan losses charged against income in
the amount of $1,470,000.

Liquidity and Capital Resources

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

         The liquidity and capital resources of the Company and the Bank are
monitored on a periodic basis by state and Federal regulatory authorities. As
determined under guidelines established by these regulatory authorities, the
Bank's liquidity ratio at December 31, 2000 was considered satisfactory. At that
date, the Bank's short-term investments were adequate to cover any reasonable
anticipated immediate need for funds. The Company was aware of no events or
trends likely to result in a material change in their liquidity. During 2000,
the Company's capital increased $787,000 to $14,002,000 at December 31, 2000 as
compared to $13,215,000 at December 31, 1999. After the payment of cash
dividends of $198,000, the Company retained $884,000 of its net earnings for
2000 as equity capital. After recording an increase in capital of $36,000 from
the vesting of restricted stock, an increase in capital of $342,000 from
unrealized gains on securities available for sale, and a decrease in capital of
$475,000 for the purchase of treasury stock, total capital increased by
$787,000.

         At December 31, 2000, the Company had no binding commitments for
capital expenditures.

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

         The following table summarizes the regulatory capital levels of the
Company at December 31, 2000.

<TABLE>
<CAPTION>
                                                Actual                       Required                       Excess
                                      ---------------------------   ---------------------------   ---------------------------
                                          Amount       Percent          Amount       Percent          Amount       Percent
                                      -------------  ------------   -------------  ------------   ---------------------------
                                                                      (Dollars in Thousands)
                                      ---------------------------------------------------------------------------------------
       <S>                            <C>               <C>          <C>               <C>         <C>               <C>
       Leverage capital                $   14,034       10.0 %       $    5,636        4.0 %       $    8,398        6.0 %
       Risk-based capital:
       Core capital                        14,034       13.8              4,083        4.0              9,951        9.8
         Total capital                     15,321       15.0              8,165        8.0              7,156        7.0
</TABLE>

         The Bank also met its individual regulatory capital requirements at
December 31, 2000.

                                      23
<PAGE>

                      SELECTED STATISTICAL INFORMATION OF
                     GOLDEN ISLES FINANCIAL HOLDINGS, INC.


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

Average Balances and Net Income Analysis From Continuing Operations

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

<TABLE>
<CAPTION>
                                                                            Year Ended December 31,
                                                     -----------------------------------------------------------------------
                                                                    2000                                 1999
                                                     ------------------------------------  ---------------------------------
                                                                  Interest     Average                 Interest    Average
                                                      Average     Income/      Yield/       Average    Income/     Yield/
                                                      Balance     Expense     Rate Paid     Balance    Expense    Rate Paid
                                                     ---------   ----------  -----------  ----------- ---------- -----------
                                                                             (Dollars in Thousands)
                                                     -----------------------------------------------------------------------
            <S>                                      <C>         <C>          <C>         <C>          <C>        <C>
            ASSETS
               Interest-earning assets:
                  Loans, net of unearned interest    $ 108,615   $   10,480     9.65 %    $  90,765    $  8,569     9.44 %
                  Investment securities, taxable        20,513        1,276     6.22         22,017       1,334     6.06
                  Federal funds sold                     4,852          310     6.39          6,586         329     5.00
                  Interest-bearing deposits in banks       313           19     6.07            124           7     5.65
                                                     ---------   ----------               ---------    --------
                    Total interest-earning assets      134,293       12,085     9.00        119,492      10,239     8.57
                                                     ---------   ----------               ---------    --------
               Noninterest-earning assets:
                  Cash                                   2,983                                3,022
                  Allowance for loan losses             (2,669)                              (2,007)
                  Unrealized gain (loss) on
                     available for sale securities        (567)                                (120)
                  Other assets                           6,901                                5,117
                                                     ---------                            ---------
                                                         6,648                                6,012
                                                     ---------                            ---------
                    Total assets                     $ 140,941                            $ 125,504
                                                     =========                            =========
</TABLE>

                                      24
<PAGE>

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


<TABLE>
<CAPTION>
                                                                                   Year Ended December 31,
                                                            -----------------------------------------------------------------------
                                                                           2000                                1999
                                                            ------------------------------------ ----------------------------------
                                                                         Interest     Average                Interest    Average
                                                             Average      Income/      Yield/     Average     Income/     Yield/
                                                             Balance      Expense    Rate Paid    Balance     Expense   Rate Paid
                                                            -----------  ----------  ----------- ----------- ---------- -----------
                                                                                    (Dollars in Thousands)
                                                            -----------------------------------------------------------------------

                 LIABILITIES AND
                  STOCKHOLDERS' EQUITY
               <S>                                         <C>          <C>          <C>        <C>         <C>         <C>
                Interest-bearing liabilities:
                   Savings and interest-bearing
                    demand deposits                         $   28,087   $   1,080    3.85 %     $   28,154  $   1,136   4.03 %
                   Time deposits                                77,640       4,905    6.32           67,065      3,828   5.71
                   Other borrowings                              9,789         609    6.22            6,237        367   5.88
                                                            ----------   ---------               ----------  ---------
                      Total interest-bearing liabilities       115,516       6,594    5.71          101,456      5,331   5.25
                                                            ----------   ---------               ----------  ---------

                Noninterest-bearing liabilities and
                   stockholders' equity:
                   Demand deposits                              11,322                                9,915
                   Other liabilities                               623                                  719
                   Stockholders' equity                         13,480                               13,414
                                                            ----------                           ----------
                      Total noninterest-bearing liabilities
                      and stockholders' equity                  25,425                               24,048
                                                            ----------                           ----------

                      Total liabilities and stockholders'
                       equity                               $  140,941                           $  125,504
                                                            ==========                           ==========


                Interest rate spread                                                  3.29 %                             3.32 %
                                                                                     =======                            =======

                Net interest income                                      $   5,491                           $   4,908
                                                                         =========                           =========

                Net interest margin                                                   4.09 %                             4.11 %
                                                                                     =======                            =======
</TABLE>


                                      25
<PAGE>

Rate and Volume Analysis From Continuing Operations

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

<TABLE>
<CAPTION>
                                                                             Year Ended December 31,
                                                ----------------------------------------------------------------------------------
                                                             2000 vs. 1999                             1999 vs. 1998
                                                ----------------------------------------  ----------------------------------------
                                                  Increase         Changes Due To          Increase          Changes Due To
                                                              --------------------------                --------------------------
                                                 (Decrease)        Rate        Volume     (Decrease)        Rate         Volume
                                                ------------- ------------- ------------  ------------  ------------  ------------
                                                                             (Dollars in Thousands)
                                                ----------------------------------------------------------------------------------
       <S>                                     <C>           <C>          <C>            <C>           <C>           <C>
        Increase (decrease) in:
           Income from earning assets:
              Interest and fees on loans        $     1,911   $       226   $    1,685    $       53    $     (636)   $      689
              Interest on taxable securities            (58)           33          (91)           80           (21)          101
              Interest on Federal funds                 (19)           68          (87)           53           (23)           76
              Deposits in banks                          12             1           11           (17)            -           (17)
                                               ------------   -----------   ----------    ----------    ----------    ----------
                Total interest income                 1,846           328        1,518           169          (680)          849
                                               ------------   -----------   ----------    ----------    ----------    ----------
        Expense from interest-bearing
           liabilities:
           Interest on savings and
           interest-
              bearing demand deposits                   (56)          (53)          (3)          404            20           384
           Interest on time deposits                  1,077           473          604          (275)         (169)         (106)
           Interest on other borrowings                 242            33          209            15           (11)           26
           Interest on debt                               -             -            -          (140)            -          (140)
                                               ------------   -----------   ----------    ----------    ----------    ----------
                Total interest expense                1,263           453          810             4          (160)          164
                                               ------------   -----------   ----------    ----------    ----------    ----------

                Net interest income             $       583   $      (125)  $      708    $      165    $     (520)   $      685
                                               ============   ===========   ==========    ==========    ==========    ==========
</TABLE>


                                      26
<PAGE>

Asset/Liability Management

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

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

     As of December 31, 2000, the Company's cumulative one-year interest rate
sensitivity gap ratio was 77%. This indicates that the Company's interest-
bearing liabilities will reprice during this period at a rate slightly faster
than the Company's interest-earning assets. Certain assumptions regarding the
interest sensitivity of these assets and liabilities have been incorporated into
this analysis. The Company believes that it has positioned itself to maintain
its net interest margin in the event of changes in interest rates. There can be
no assurance, however, that this strategy will be successful.

     The following table sets forth the distribution of the repricing of the
Company's earning assets and interest-bearing liabilities as of December 31,
2000, the interest rate sensitivity gap (i.e., interest rate sensitive assets
less interest rate sensitive liabilities), the cumulative interest rate
sensitivity gap ratio (i.e., interest rate sensitive assets divided by interest
rate sensitive liabilities) and the cumulative sensitivity gap ratio. The table
also sets forth the time periods in which earning assets and liabilities will
mature or may reprice in accordance with their contractual terms. However, the
table does not necessarily indicate the impact of general interest rate
movements on the net interest margin since the repricing of various categories
of assets and liabilities is subject to competitive pressures and the needs of
the Bank's customers. In addition, various assets and liabilities indicated as
repricing within the same period may in fact reprice at different times within
such period and at different rates.

                                      27
<PAGE>

Asset/Liability Management (Continued)

<TABLE>
<CAPTION>
                                                                              At December 31, 2000
                                                    ------------------------------------------------------------------------
                                                                          Maturing or Repricing Within
                                                    ------------------------------------------------------------------------
                                                      Zero to         Three           One           Over
                                                       Three        Months to       Year to         Three
                                                       Months        One Year     Three Years       Years          Total
                                                    ------------   ------------   -----------    -----------    ------------
                                                                             (Dollars in Thousands)
                                                    ------------------------------------------------------------------------
     <S>                                            <C>            <C>            <C>            <C>            <C>
     Earning assets:
        Interest-bearing deposits in banks          $         98   $          -   $         -    $         -    $         98
        Federal funds sold                                 4,303              -             -              -           4,303
        Investment securities                              2,430            501         6,232          9,768          18,931
        Loans                                             52,092         18,144        19,730         23,437         113,403
                                                    ------------   ------------   ------------   -----------    ------------
                                                          58,923         18,645        25,962         33,205         136,735
                                                    ------------   ------------   ------------   -----------    ------------

   Interest-bearing liabilities:
      Interest-bearing demand deposits                    26,678              -             -              -          26,678
      Savings                                              2,911              -             -              -           2,911
      Certificates less than $100,000                     12,330         33,144         4,566            325          50,365
      Certificates, $100,000 and over                      5,631         17,098         5,263            111          28,103
      Other borrowings                                     3,046            444         2,268          5,527          11,285
                                                    ------------   ------------   -----------    -----------    ------------
                                                          50,596         50,686        12,097          5,963         119,342
                                                    ------------   ------------   -----------    -----------    ------------

   Interest rate sensitivity gap                    $      8,327   $    (32,041)  $    13,865    $    27,242    $     17,393
                                                    ============   ============   ===========    ===========    ============

   Cumulative interest rate sensitivity gap         $      8,327   $    (23,714)  $    (9,849)   $    17,393
                                                    ============   ============   ===========    ===========

   Interest rate sensitivity gap ratio                      1.16           0.37          2.15           5.57
                                                    ============   ============   ===========    ===========

   Cumulative interest rate sensitivity gap ratio           1.16           0.77          0.91           1.15
                                                    ============   ============   ===========    ===========
</TABLE>

     The Company manages the mix of asset and liability maturities in an effort
to control the effects of changes in the general level of interest rates on net
interest income. Except for its effect on the general level of interest rates,
inflation does not have a material impact on the Company due to the rate
variability and short-term maturities of its earning assets. In particular,
approximately 62% of the loan portfolio is comprised of loans which mature or
reprice within one year or less. Mortgage loans, primarily with five to fifteen
year maturities, are also made on a variable rate basis with rates being
adjusted every one to five years.

                                      28
<PAGE>

                             INVESTMENT PORTFOLIO

Types of Investments

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

<TABLE>
<CAPTION>
                                                                                     Gross         Gross
                                                                   Amortized       Unrealized    Unrealized        Fair
                                                                      Cost           Gains         Losses         Value
                                                                 ---------------  ------------- ------------- --------------
                                                                                   (Dollars in Thousands)
                                                                 -----------------------------------------------------------
               <S>                                               <C>              <C>           <C>           <C>
               December 31, 2000:
                  U. S. Government and agency securities         $       15,130   $         24  $       (76)  $       15,078
                  Mortgage-backed securities                              3,266             13           (9)           3,270
                  Restricted equity securities                              583             -             -              583
                                                                 --------------   ------------  -----------   --------------
                                                                 $       18,979   $         37  $       (85)  $       18,931
                                                                 ==============   ============  ===========   ==============

               December 31, 1999:
                  U. S. Government and agency securities         $       16,646   $          3  $      (534)  $       16,115
                  Mortgage-backed securities                              2,800             -           (36)           2,764
                  Restricted equity securities                              366             -             -              366
                                                                 --------------   ------------  ----------- - --------------
                                                                 $       19,812   $          3  $      (570)  $       19,245
                                                                 ==============   ============  ===========   ==============
</TABLE>

Maturities

         The amounts of investments in securities in each category as of
December 31, 2000 are shown in the following table according to contractual
maturity classifications (1) one year or less, (2) after one year through five
years, (3) after five years through ten years, and (4) after ten years.

<TABLE>
<CAPTION>
                                                                           U. S. Treasury
                                                                           and Other U. S.
                                                                         Government Agencies                State and
                                                                          and Corporations          Political Subdivisions
                                                                                        Yield
                                                                         Amount          (1)          Amount          Yield
                                                                     --------------- ------------  --------------  ------------
                                                                                      (Dollars in Thousands)
                                                                     ----------------------------------------------------------
                <S>                                                  <C>                <C>        <C>                <C>
                Maturity:
                   One year or less                                  $        2,076       6.54 %   $          -          -  %
                   After one year through five years                         10,568       6.29                -          -
                   After five years through ten years                         6,287       6.24                -          -
                   After ten years                                               -          -                 -          -
                                                                     --------------    -------     ------------     ------
                                                                     $       18,931       6.30 %   $          -          -  %
                                                                     ==============    =======     ============     ======
</TABLE>

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

                                      29
<PAGE>

                                LOAN PORTFOLIO

Types of Loans

         Management believes that the Company's loan portfolio is adequately
diversified. The loan portfolio contains no foreign or energy-related loans or
significant concentrations in any one industry, with the exception of real
estate mortgage loans, which constituted approximately 81% of the Company's loan
portfolio as of December 31, 2000. The amount of loans outstanding at the
indicated dates is shown in the following table according to type of loans.

<TABLE>
<CAPTION>
                                                                                                  December 31,
                                                                                       ----------------------------------
                                                                                             2000                1999
                                                                                       ----------------   ---------------
                                                                                             (Dollars in Thousands)
                                                                                       ----------------------------------
                  <S>                                                                  <C>                <C>
                  Commercial, financial and agricultural                               $       14,067     $        15,197
                  Real estate - construction                                                   10,319               7,472
                  Real estate -  mortgage                                                      81,456              70,302
                  Consumer instalment                                                           7,412               5,166
                  Other                                                                           149                 109
                                                                                       --------------     ---------------
                                                                                              113,403              98,246
                  Allowance for loan losses                                                    (2,201)             (2,559)
                                                                                       --------------     ---------------
                  Loans, net                                                           $      111,202     $        95,687
                                                                                       ==============     ===============
</TABLE>

         Total loans as of December 31, 2000 are shown in the following table
according to maturity or repricing opportunities (1) one year or less, (2) after
one year through five years, and (3) after five years.

<TABLE>
<CAPTION>
                                                                                                              (Dollars in
                                                                                                               Thousands)
                                                                                                             --------------
<S>                                                                                                          <C>
Maturity or Repricing Within:
   One year or less                                                                                          $       70,236
   After one year through three years                                                                                19,730
   After three years                                                                                                 23,437
                                                                                                             --------------
                                                                                                             $      113,403
                                                                                                             ==============
</TABLE>

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

         The following table summarizes loans at December 31, 2000 with the due
dates after one year which (1) have predetermined interest rates and (2) have
floating or adjustable interest rates.

<TABLE>
<CAPTION>
                                                                                                              (Dollars in
                                                                                                               Thousands)
                                                                                                             --------------
        <S>                                                                                                  <C>
        Predetermined interest rates                                                                         $       43,167
        Floating or adjustable interest rates                                                                            -
                                                                                                             --------------
                                                                                                             $       43,167
                                                                                                             ==============
</TABLE>

                                      30
<PAGE>

Nonperforming Loans

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


<TABLE>
<CAPTION>
                                                                                                     December 31,
                                                                                              ----------------------------
                                                                                                   2000           1999
                                                                                              -------------  -------------
                                                                                                (Dollars in Thousands)
                                                                                              ----------------------------
      <S>                                                                                     <C>            <C>
      Loans accounted for on a nonaccrual basis                                               $      2,899   $      1,809

      Instalment loans and term loans contractually past due ninety days or more                       214            392
        as to interest or principal payments and still accruing

      Loans, the terms of which have been renegotiated to provide a reduction                          216            632
        or deferral of interest or principal because of deterioration in the
        financial position of the borrower
</TABLE>

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

Commitments and Lines of Credit

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

         Following is a summary of the commitments outstanding at December 31,
2000 and 1999.

<TABLE>
<CAPTION>
                                                                                                 2000              1999
                                                                                            ---------------   ---------------
                                                                                                 (Dollars in Thousands)
                                                                                            ---------------------------------
           <S>                                                                              <C>               <C>
           Commitments to extend credit                                                     $       14,350    $       12,304
           Standby letters of credit                                                                   610               705
                                                                                            ---------------   ---------------
                                                                                            $       14,960    $       13,009
                                                                                            ===============   ===============
</TABLE>

                                      31
<PAGE>

                         SUMMARY OF LOAN LOSS EXPERIENCE

         The provision for possible loan losses is created by direct charges to
operations. Losses on loans are charged against the allowance in the period in
which such loans, in management's opinion, become uncollectible. Recoveries
during the period are credited to this allowance. The factors that influence
management's judgment in determining the amount charged to operating expense are
past loan experience, composition of the loan portfolio, evaluation of possible
future losses, current economic conditions and other relevant factors. The
Company's allowance for loan losses was approximately $2,201,000 at December 31,
2000, representing 1.94% of year end total loans outstanding, compared with
$2,559,000 at December 31, 1999, which represented 2.60% of year end total loans
outstanding. The allowance for loan losses is reviewed monthly based on
management's evaluation of current risk characteristics of the loan portfolio,
as well as the impact of prevailing and expected economic business conditions.
Management considers the allowance for loan losses adequate to cover possible
loan losses on the loans outstanding.

Allocation of the Allowance for Loan Losses

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

<TABLE>
<CAPTION>
                                                                                         At December 31,
                                                                      -------------------------------------------------------
                                                                                2000                         1999
                                                                      -------------------------    --------------------------
                                                                                    Percent of                   Percent of
                                                                                    Loans in                      Loans in
                                                                                     Category                     Category
                                                                                     to Total                     to Total
                                                                        Amount        Loans          Amount        Loans
                                                                      -----------   -----------    -----------  -------------
                                                                                      (Dollars in Thousands)
                                                                      -------------------------------------------------------
       <S>                                                            <C>           <C>           <C>          <C>
       Commercial, financial,
          industrial and agricultural                                 $    1,430         12%       $    1,756         16 %
       Real estate                                                           594         81               688         79
       Consumer                                                              110          7               115          5
       Unallocated                                                            67          -                 -          -
                                                                      -----------   -----------    -----------  -------------
                                                                      $    2,201        100%       $    2,559        100 %
                                                                      ===========   ===========    ===========  =============
</TABLE>

                                      32
<PAGE>

Allocation of the Allowance for Loan Losses (Continued)

         The following table presents an analysis of the Company's loan loss
experience for the periods indicated:

<TABLE>
<CAPTION>
                                                                                                      December 31,
                                                                                               --------------------------
                                                                                                    2000           1999
                                                                                               -------------  -----------
                                                                                                 (Dollars in Thousands)
                                                                                               --------------------------
                  <S>                                                                          <C>            <C>
                  Average amount of loans outstanding                                          $   108,615    $    90,765
                                                                                               ===========    ===========
                  Balance of reserve for possible loan losses at
                    beginning of period                                                        $     2,559    $     1,825
                                                                                               -----------    -----------
                  Charge-offs:
                    Commercial, financial and agricultural                                            (613)          (460)
                    Real estate                                                                          -           (210)
                    Consumer                                                                          (252)          (134)
                  Recoveries:
                    Commercial, financial and agricultural                                             112             21
                    Real estate                                                                          -             14
                    Consumer                                                                            59             33
                                                                                               -----------    -----------
                          Net charge-offs                                                             (694)          (736)
                                                                                               -----------    -----------

                  Additions to reserve charged to operating expenses                                   335          1,470
                                                                                               -----------    -----------

                          Balance of reserve for possible loan losses                          $     2,200    $     2,559
                                                                                               ===========    ===========

                  Ratio of net loan charge-offs to average loans                                      0.64%          0.81%
                                                                                               ===========    ===========
</TABLE>

                                      33
<PAGE>

                                   DEPOSITS

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

<TABLE>
<CAPTION>
                                                                                    Year Ended December 31,
                                                                  ---------------------------------------------------------
                                                                              2000                           1999
                                                                  -----------------------------  --------------------------
                                                                       Amount         Rate            Amount         Rate
                                                                  ---------------  ------------  ---------------  ---------
                                                                                    (Dollars in Thousands)
                                                                  ---------------------------------------------------------
      <S>                                                         <C>                <C>         <C>                <C>
      Noninterest-bearing demand deposits                         $       11,322          -%     $        9,915         -%
      Interest-bearing demand and savings deposits                        28,087       3.85              28,154      4.03
      Time deposits                                                       77,640       6.32              67,065      5.71
                                                                  --------------                 --------------
              Total deposits                                      $      117,049                 $      105,134
                                                                  ==============                 ==============
</TABLE>

         The amounts of time certificates of deposit issued in amounts of
$100,000 or more as of December 31, 2000, are shown below by category, which is
based on time remaining until maturity of (1) three months or less, (2) over
three through twelve months and (3) over twelve months.


<TABLE>
<CAPTION>
                                                                                                  (Dollars in
                                                                                                   Thousands)
                                                                                                 --------------
           <S>                                                                                   <C>
           Three months or less                                                                  $        5,631
           Over three through twelve months                                                              17,098
           Over twelve months                                                                             5,374
                                                                                                 --------------
                         Total                                                                   $       28,103
                                                                                                 ==============
</TABLE>

                                      34
<PAGE>

                   RETURN ON ASSETS AND STOCKHOLDERS' EQUITY

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

<TABLE>
<CAPTION>
                                                                                             Year Ended December 31,
                                                                                       ------------------------------------
                                                                                            2000                1999
                                                                                       ----------------    ----------------
      <S>                                                                              <C>                  <C>
      Return on assets  (1)                                                                  0.77                0.22%

      Return on equity  (2)                                                                  8.03                2.05

      Dividend payout ratio (3)                                                             18.26               72.35*

      Equity to assets ratio (4)                                                             9.56               10.69
</TABLE>

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


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

                                      35
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Independent Auditor's Report

     Consolidated Balance Sheets - December 31, 2000 and 1999

     Consolidated Statements of Income - Years ended December 31, 2000 and 1999

     Consolidated Statements of Comprehensive Income (Loss) - Years ended
     December 31, 2000 and 1999

     Consolidated Statements of Stockholders' Equity - Years ended December 31,
     2000 and 1999

     Consolidated Statements of Cash Flows - Years ended December 31, 2000 and
     1999

     Notes to Consolidated Financial Statements.

                                      36
<PAGE>

                         INDEPENDENT AUDITOR'S REPORT

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

          We have audited the accompanying consolidated balance sheets of Golden
Isles Financial Holdings, Inc. and Subsidiary as of December 31, 2000 and 1999
and the related consolidated statements of income, comprehensive income (loss),
stockholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

          In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of Golden
Isles Financial Holdings, Inc. and Subsidiary as of December 31, 2000 and 1999,
and the results of their operations and their cash flows for the years then
ended, in conformity with generally accepted accounting principles.


                                                      /s/ Mauldin & Jenkins, LLC


Albany, Georgia
January 31, 2001, except for Note 14,
  as to which the date is February 23, 2001

                                      37
<PAGE>

                     GOLDEN ISLES FINANCIAL HOLDINGS, INC.
                                AND SUBSIDIARY

                          CONSOLIDATED BALANCE SHEETS
                          DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                                                               2000                    1999
                                                                     --------------------    --------------------
<S>                                                               <C>                      <C>
Assets
------
Cash and due from banks                                              $          4,598,403    $          4,017,512
Interest-bearing deposits in banks                                                 97,752                  13,888
Federal funds sold                                                              4,303,000               6,945,000
Securities available for sale, at fair value                                   18,930,924              19,244,799

Loans                                                                         113,402,556              98,246,349
Less allowance for loan losses                                                  2,200,529               2,559,153
                                                                     --------------------    --------------------
          Loans, net                                                          111,202,027              95,687,196
                                                                     --------------------    --------------------

Premises and equipment, net                                                     4,676,129               3,408,237
Other assets                                                                    2,809,223               3,080,575
                                                                     --------------------    --------------------

          Total assets                                               $        146,617,458    $        132,397,207
                                                                     ====================    ====================

Liabilities and Stockholders' Equity
------------------------------------
Deposits
    Noninterest-bearing                                              $         12,758,007    $         10,316,942
    Interest-bearing                                                          108,057,336             102,425,964
                                                                     --------------------    --------------------
          Total deposits                                                      120,815,343             112,742,906
    Federal Home Loan Bank borrowings                                          11,285,157               5,888,829
    Other liabilities                                                             514,526                 550,780
                                                                     --------------------    --------------------
          Total liabilities                                                   132,615,026             119,182,515
                                                                     --------------------    --------------------

Commitments and Contingencies


Stockholders' equity
    Common stock, no par value; 50,000,000
        shares authorized; 2,505,500 issued                                     1,094,338               1,094,338
    Capital surplus                                                            11,730,014              11,693,718
    Retained earnings                                                           1,685,222                 800,904
    Accumulated other comprehensive loss                                          (31,667)               (374,268)
                                                                     --------------------    --------------------
                                                                               14,477,907              13,214,692
    Less cost of shares acquired for the treasury, 71,700 shares                 (475,475)                     --
                                                                     --------------------    --------------------
          Total stockholders' equity                                           14,002,432              13,214,692
                                                                     --------------------    --------------------

          Total liabilities and stockholders' equity                 $        146,617,458    $        132,397,207
                                                                     ====================    ====================
</TABLE>

See Notes to Consolidated Financial Statements.


                                      38
<PAGE>

                     GOLDEN ISLES FINANCIAL HOLDINGS, INC.
                                AND SUBSIDIARY

                       CONSOLIDATED STATEMENTS OF INCOME
                    YEARS ENDED DECEMBER 31, 2000 AND 1999
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
                                                                            2000                    1999
                                                                     ----------------       -----------------
<S>                                                               <C>                    <C>
Interest income
    Interest and fees on  loans                                      $     10,479,773       $       8,568,537
    Interest and dividends on taxable securities                            1,276,407               1,334,074
    Other interest income                                                     328,700                 335,991
                                                                     ----------------       -----------------
          Total interest income                                            12,084,880              10,238,602
                                                                     ----------------       -----------------

Interest expense
    Interest on deposits                                                    5,985,497               4,963,675
    Interest on other borrowings                                              608,542                 367,243
                                                                     ----------------       -----------------
          Total interest expense                                            6,594,039               5,330,918
                                                                     ----------------       -----------------

          Net interest income                                               5,490,841               4,907,684
Provision for loan losses                                                     335,000               1,470,000
                                                                     ----------------       -----------------
          Net interest income after provision for loan losses               5,155,841               3,437,684
                                                                     ----------------       -----------------

Other income
    Income from origination of mortgage loans,
        less related expenses                                                 168,605                 169,903
    Service charges on deposit accounts                                       475,288                 440,074
    Net realized gain on sales of securities                                       --                   8,257
    Other                                                                     212,023                  79,751
                                                                     ----------------       -----------------
          Total other income                                                  855,916                 697,985
                                                                     ----------------       -----------------

Other expense
    Salaries and employee benefits                                          2,439,504               2,085,017
    Equipment and occupancy expense                                           658,678                 559,123
    Advertising and business development                                      176,576                 159,802
    Legal and professional                                                    251,789                 220,274
    Supplies and printing                                                     231,418                 154,243
    Other operating expenses                                                  660,831                 525,769
                                                                     ----------------       -----------------
          Total other expense                                               4,418,796               3,704,228
                                                                     ----------------       -----------------

        Income before income tax                                            1,592,961                 431,441

Applicable income tax                                                         511,019                 156,322
                                                                     ----------------       -----------------

          Net income                                                 $      1,081,942       $         275,119
                                                                     ================       =================


Basic earnings per common share:
    Net income                                                       $           0.44       $            0.11
                                                                     ================       =================

Diluted earnings per common share:
    Net income                                                       $           0.44       $            0.11
                                                                     ================       =================
</TABLE>

See Notes to Consolidated Financial Statements.

                                      39
<PAGE>

                      GOLDEN ISLES FINANCIAL HOLDINGS, INC.
                                 AND SUBSIDIARY

             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
                                                                                           2000                       1999
                                                                                 -------------------     --------------------
<S>                                                                             <C>                    <C>
Net income                                                                       $         1,081,942     $            275,119
                                                                                 -------------------     --------------------

Other comprehensive income (loss):
    Net unrealized holding gains (losses) on securities
        available for sale arising during period, net of taxes
        (benefits) of $176,491 and $(273,425), respectively                                  342,601                 (530,228)
    Reclassification adjustment for gains included in
        net income, net of taxes of $2,807                                                        --                   (5,450)
                                                                                 -------------------     --------------------
Total other comprehensive income (loss)                                                      342,601                 (535,678)
                                                                                 -------------------     --------------------

Comprehensive income (loss)                                                      $         1,424,543     $           (260,559)
                                                                                 ===================     ====================
</TABLE>

See Notes to Consolidated Financial Statements.



                                      40
<PAGE>

                     GOLDEN ISLES FINANCIAL HOLDINGS, INC.
                                AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                    YEARS ENDED DECEMBER 31, 2000 AND 1999

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

<TABLE>
<CAPTION>
                                                                                                 Retained
                                                             Common Stock           Capital      Earnings
                                                        -----------------------
                                                         Shares      Par Value      Surplus      (Deficit)
                                                        ---------   -----------   -----------   -----------
<S>                                                     <C>         <C>           <C>           <C>
Balance, December 31, 1998                              2,474,377   $ 1,094,338   $11,482,666   $   724,462
    Net income                                                 --            --            --       275,119
    Dividends paid, $0.08 per share                            --            --            --      (198,677)
    Vesting of restricted stock                                --            --        37,164            --
Issuance of restricted stock                                4,000            --            --            --
    Proceeds from exercise
        of stock options                                   27,123            --       173,888            --
    Other comprehensive loss                                   --            --            --            --
                                                        ---------   -----------   -----------   -----------
Balance, December 31, 1999                              2,505,500     1,094,338    11,693,718       800,904
    Net income                                                 --            --            --     1,081,942
    Dividends paid, $0.08 per share                            --            --            --      (197,624)
    Vesting of restricted stock                                --            --        36,296            --
    Net treasury stock transactions                            --            --            --            --
    Other comprehensive income                                 --            --            --            --
                                                        ---------   -----------   -----------   -----------
Balance, December 31, 2000                              2,505,500   $ 1,094,338   $11,730,014   $ 1,685,222
                                                        =========   ===========   ===========   ===========
</TABLE>

See Notes to Consolidated Financial Statements.


     ------------------------------------------------------------
      Accumulated
         Other                                          Total
     Comprehensive         Treasury Stock           Stockholders'
                        ---------------------
     Income (Loss)       Shares       Cost             Equity
     ------------       ---------   ---------       -------------

     $    161,410              --   $      --       $ 13,462,876
               --              --          --            275,119
               --              --          --           (198,677)
               --              --          --             37,164
     ------------       ---------   ---------       ------------

               --              --          --            173,888
         (535,678)             --          --           (535,678)
                                    ---------       ------------
         (374,268)             --          --         13,214,692
               --              --          --          1,081,942
               --              --          --           (197,624)
               --              --          --             36,296
               --          71,700    (475,475)          (475,475)
          342,601              --          --            342,601
     ------------       ---------   ---------       ------------
     $    (31,667)         71,700   $(475,475)      $ 14,002,432
     ============       =========   ==========      ============

                                      41
<PAGE>

                     GOLDEN ISLES FINANCIAL HOLDINGS, INC.
                                AND SUBSIDIARY

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                    YEARS ENDED DECEMBER 31, 2000 AND 1999

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

<TABLE>
<CAPTION>
                                                                        2000                1999
                                                                    ------------        ------------
<S>                                                                 <C>                 <C>
OPERATING ACTIVITIES
    Net income                                                      $  1,081,942        $    275,119
    Adjustments to reconcile net income to net cash provided
        by operating activities
        Depreciation                                                     303,736             292,102
        Provision for loan losses                                        335,000           1,470,000
        Provision for deferred taxes                                     141,625            (159,224)
        Net gain (loss) on disposal of premises and equipment             (2,000)             21,346
        Net realized gain on securities transactions                          --              (8,257)
        Decrease (increase) in interest receivable                      (160,636)             60,181
        Increase in interest payable                                     117,351              16,728
        Decrease (increase) in taxes receivable                          126,894            (126,894)
        Decrease in taxes payable                                             --            (445,442)
        Net change in other prepaids and accruals                       (166,628)            (43,563)
                                                                    ------------        ------------
              Net cash provided by operating activities                1,777,284           1,352,096
                                                                    ------------        ------------

INVESTING ACTIVITIES
    Decrease (increase) in interest-bearing deposits in bank             (83,864)            108,866
    Decrease (increase) in federal funds sold                          2,642,000          (4,395,000)
    Available for sale securities:
        Proceeds from sales and calls                                         --          11,015,465
        Proceeds from maturities and paydowns                          1,500,000           3,281,826
        Proceeds from redemption of Federal Home

            Loan Bank stock                                                   --             186,100
        Purchases                                                       (667,032)        (11,488,695)
    Increase in loans, net                                           (15,849,831)         (9,217,529)
    Purchase of premises and equipment                                (1,571,628)           (705,988)
    Proceeds from sales of premises and equipment                          2,000                 295
                                                                    ------------        ------------

              Net cash used in investing activities                  (14,028,355)        (11,214,660)
                                                                    ------------        ------------
</TABLE>

                                      42
<PAGE>

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                    YEARS ENDED DECEMBER 31, 2000 AND 1999

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

<TABLE>
<CAPTION>
                                                               2000             1999
                                                           ------------     ------------
<S>                                                        <C>              <C>
FINANCING ACTIVITIES
  Net increase in deposits                                 $  8,072,437     $ 11,470,985
  Net (decrease) increase in Federal Home Loan

     Bank borrowings                                          5,396,328         (611,671)
  Dividends paid                                               (197,624)        (198,677)
  Vesting of restricted stock                                    36,296           37,164
  Proceeds from exercise of stock options                            --          173,888
  Purchase of treasury shares                                  (475,475)              --
                                                           ------------     ------------

        Net cash provided by financing activities            12,831,962       10,871,689
                                                           ------------     ------------

Net increase in cash and due from banks                         580,891        1,009,125

Cash and due from banks at beginning of year                  4,017,512        3,008,387
                                                           ------------     ------------

Cash and due from banks at end of year                     $  4,598,403     $  4,017,512
                                                           ============     ============

SUPPLEMENTAL DISCLOSURES
   Cash paid for:
    Interest                                               $  6,476,688     $  5,314,190

    Income taxes                                           $    242,500     $    887,882


NONCASH TRANSACTIONS
   Unrealized (gains) losses on securities
    available for sale                                     $   (519,093)    $    811,910

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

See Notes to Consolidated Financial Statements.

                                      43
<PAGE>

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

NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          Nature of Business

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

          Basis of Presentation

            The preparation of financial statements in conformity with generally
            accepted accounting principles requires management to make estimates
            and assumptions that affect the reported amounts of assets and
            liabilities as of the balance sheet date and reported amounts of
            revenues and expenses during the reporting period. Actual results
            could differ from those estimates. Material estimates that are
            particularly susceptible to significant change in the near term
            relate to the determination of the allowance for loan losses, the
            valuation of foreclosed real estate, and deferred taxes.

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

          Reclassification of Certain Items

            Certain items in the consolidated financial statements as of and for
            the year ended December 31, 1999 have been reclassified, with no
            effect on total assets, total capital or net income, to be
            consistent with the classifications adopted for the year ended
            December 31, 2000.

          Cash, Due From Banks and Cash Flows

            For purposes of reporting cash flows, cash and due from banks
            includes cash on hand, cash items in process of collection and
            amounts due from banks. Cash flows from loans, federal funds sold
            and deposits are reported net.

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

                                      44
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          Securities

            Debt securities that management has the positive intent and ability
            to hold to maturity are classified as held-to-maturity and recorded
            at amortized cost. Securities not classified as held-to-maturity,
            including equity securities with readily determinable fair values,
            are classified as available-for-sale and recorded at fair value with
            unrealized gains and losses excluded from earnings and reported in
            other comprehensive income. Equity securities, including restricted
            stock, without a readily determinable fair value are classified as
            available-for-sale and recorded at cost.

            Interest and dividends, including amortization of premiums and
            accretion of discounts, are recognized in interest income. Gains and
            losses on the sale of securities are determined using the specific
            identification method. Declines in the fair value of held-to-
            maturity and available-for-sale securities below their cost that are
            deemed to be other than temporary are reflected in earnings as
            realized losses.

          Loans

            Loans are reported at their outstanding unpaid principal balances
            less unearned income, deferred fees or costs on originated loans,
            and the allowance for loan losses. Interest income is accrued on the
            unpaid balance.

            Loan origination fees, net of certain direct origination costs of
            consumer and instalment loans are recognized at the time the loan is
            placed on the books. Because these loan fees are not significant and
            the majority of loans have maturities of one year or less, the
            results of operations are not materially different than the results
            which would be obtained by accounting for loan fees and costs in
            accordance with generally accepted accounting principles. Loan
            origination fees net of certain direct loan origination costs for
            all other loans are deferred and recognized as an adjustment of the
            yield over the life of the loan.

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

            The allowance for loan losses is established through a provision for
            loan losses charged to expense. Loans are charged against the
            allowance when management believes the collectibility of the
            principal is unlikely. Subsequent recoveries are credited to the
            allowance.

                                      45
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          Loans (Continued)

            The allowance is an amount that management believes will be adequate
            to absorb estimated losses in the loan portfolio. The allowance for
            loan losses is evaluated on a regular basis by management and is
            based upon management's periodic review of the collectibility of the
            loans in light of historical experience, the nature and volume of
            the loan portfolio, adverse situations that may affect the
            borrower's ability to repay, estimated value of any underlying
            collateral and prevailing economic conditions. This evaluation is
            inherently subjective as it requires estimates that are susceptible
            to significant revision as more information becomes available. In
            addition, regulatory agencies, as an integral part of their
            examination process, periodically review the Bank's allowance for
            loan losses, and may require the Bank to make additions to the
            allowance based on their judgment about information available to
            them at the time of their examinations.

            A loan is considered impaired when it is probable the Bank will be
            unable to collect all principal and interest payments due in
            accordance with the contractual terms of the loan agreement.
            Impaired loans are measured based on the present value of expected
            future cash flows discounted at the loan's effective interest rate,
            the loan's observable market price, or the fair value of the
            collateral if the loan is collateral dependent. The amount of
            impairment, if any, and any subsequent changes are included in the
            allowance for loan losses.

          Premises and Equipment

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

          Other Real Estate Owned

            Other real estate owned represents properties acquired through
            foreclosure. Other real estate owned is held for sale and is carried
            at the lower of cost or fair value less estimated costs of disposal.
            Any write-down to fair value at the time of transfer to other real
            estate owned is charged to the allowance for loan losses. Revenue
            and expenses from operations and changes in the valuation allowance
            are included in net expenses from foreclosed assets. The carrying
            amount of other real estate owned at December 31, 2000 and 1999 was
            $789,307 and $1,047,785, respectively.

          Income Taxes

            Deferred income tax assets and liabilities are determined using the
            balance sheet method. Under this method, the net deferred tax asset
            or liability is determined based on the tax effects of the temporary
            differences between the book and tax bases of the various balance
            sheet assets and liabilities and gives current recognition to
            changes in tax rates and laws.

                                      46
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          Earnings Per Common Share

            Basic earnings per common share are computed by dividing net income
            by the weighted average number of shares of common stock
            outstanding. Diluted earnings per share are computed by dividing net
            income after adjustments for the after-tax income effect of the
            issuance of potential common shares that are dilutive by the sum of
            the weighted-average number of shares of common stock outstanding
            and potential common shares. The weighted-average number of shares
            outstanding for the years ended December 31, 2000 and 1999 was
            2,469,192 and 2,488,236, respectively. The weighted-average number
            of shares outstanding and potential common shares for the years
            ended December 31, 2000 and 1999 was 2,478,797 and 2,512,884,
            respectively.

          Comprehensive Income (Loss)

            Accounting principles generally require that recognized revenue,
            expenses, gains and losses be included in net income. Although
            certain changes in assets and liabilities, such as unrealized gains
            and losses on available-for-sale securities, are reported as a
            separate component of the equity section of the balance sheet, such
            items, along with net income, are components of comprehensive
            income.

          Recent Developments

            In June 1998, the FASB issued SFAS No. 133, Accounting for
            Derivative Instruments and Hedging Activities, effective for fiscal
            years beginning after June 15, 2000. This Statement establishes
            accounting and reporting standards for derivative instruments and
            hedging activities, including certain derivative instruments
            embedded in other contracts, and requires that an entity recognize
            all derivatives as assets or liabilities in the balance sheet and
            measure them at fair value. If certain conditions are met, an entity
            may elect to designate a derivative as follows: (a) a hedge of the
            exposure to changes in the fair value of a recognized asset or
            liability or an unrecognized firm commitment, (b) a hedge of the
            exposure to variable cash flows of a forecasted transaction, or (c)
            a hedge of the foreign currency exposure of an unrecognized firm
            commitment, an available-for-sale security, a foreign currency
            denominated forecasted transaction, or a net investment in a foreign
            corporation. The Statement generally provides for matching the
            timing of the recognition of the gain or loss on derivatives
            designated as hedging instruments with the recognition of the
            changes in the fair value of the item being hedged. Depending on the
            type of hedge, such recognition will be in either net income or
            other comprehensive income. For a derivative not designated as a
            hedging instrument, changes in fair value will be recognized in net
            income in the period of change. Management is currently evaluating
            the impact of adopting this Statement on the financial statements,
            but does not anticipate that it will have a material impact.

                                      47
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2.   SECURITIES

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

<TABLE>
<CAPTION>
                                                                  Gross           Gross
                                                Amortized       Unrealized      Unrealized         Fair
                                                   Cost           Gains           Losses          Value
                                               ------------    ------------    ------------    ------------
<S>                                            <C>             <C>             <C>             <C>
       Securities Available for Sale
        December 31, 2000:
          U.S. Government and agency
            securities                         $ 15,129,958    $     24,250    $    (76,565)   $ 15,077,643
          Mortgage-backed securities              3,266,245          13,296          (8,961)      3,270,581
          Restricted equity securities              582,700               -               -         582,700
                                               ------------    ------------    ------------    ------------
                                               $ 18,978,903    $     37,546    $    (85,526)   $ 18,930,924
                                               ============    ============    ============    ============

     December 31, 1999:
          U.S. Government and agency
            securities                         $ 16,645,505    $      2,963    $   (534,368)   $ 16,114,100
          Mortgage-backed securities              2,799,966               -         (35,667)      2,764,299
          Restricted equity securities              366,400               -               -         366,400
                                               ------------    ------------    ------------    ------------
                                               $ 19,811,871    $      2,963    $   (570,035)   $ 19,244,799
                                               ============    ============    ============    ============
</TABLE>

          Securities with a carrying value of $3,110,926 and $3,034,765 at
          December 31, 2000 and 1999, respectively, were pledged to secure
          public deposits and for other purposes required or permitted by law.

          The amortized cost and fair value of debt securities as of December
          31, 2000 by contractual maturity are shown below. Maturities may
          differ from contractual maturities in mortgage-backed securities
          because the mortgages underlying the securities may be called or
          repaid with or without penalty. Therefore, these securities are not
          included in the maturity categories in the following maturity summary.

                                                     Amortized          Fair
                                                        Cost           Value
                                                    ------------    ------------

             Due in one year or less                $    499,689    $    501,404
             Due from one year to five years           9,142,134       9,144,839
             Due from five to ten years                5,488,135       5,431,400
             Mortgage-backed securities                3,266,245       3,270,581
             Restricted equity securities                582,700         582,700
                                                    ------------    ------------
                                                    $ 18,978,903    $ 18,903,924
                                                    ============    ============

                                      48
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2.  SECURITIES (Continued)

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

<TABLE>
<CAPTION>
                                                                                               Years Ended December 31,
                                                                                          ----------------------------------
                                                                                                2000                1999
                                                                                          -------------      ---------------
                        <S>                                                               <C>                <C>
                        Gross gains on sales of securities                                $           -      $         8,257
                        Gross losses on sales of securities                                           -                   -
                                                                                          -------------      ---------------
                        Net realized gain on sales of securities available for sale       $           -      $         8,257
                                                                                          =============      ===============
</TABLE>

NOTE 3.  LOANS AND ALLOWANCE FOR LOAN LOSSES

         The composition of loans is summarized as follows:

<TABLE>
<CAPTION>
                                                                                               December 31,
                                                                                  --------------------------------------
                                                                                          2000                  1999
                                                                                  -----------------     ----------------
                      <S>                                                         <C>                   <C>
                      Commercial and financial                                    $      14,066,945     $     15,197,054
                      Real estate - construction                                         10,318,960            7,472,027
                      Real estate - mortgage                                             81,455,681           70,302,250
                      Consumer installment                                                7,411,971            5,166,018
                      Other                                                                 148,999              109,000
                                                                                  -----------------     ----------------
                                                                                        113,402,556           98,246,349
                      Allowance for loan losses                                          (2,200,529)          (2,559,153)
                                                                                  -----------------     ----------------
                      Loans, net                                                  $     111,202,027     $     95,687,196
                                                                                  =================     ================
</TABLE>

                                      49
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3.  LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

         Changes in the allowance for loan losses are as follows:

<TABLE>
<CAPTION>
                                                                                          Years Ended December 31,
                                                                                  ----------------------------------------
                                                                                          2000                   1999
                                                                                  -----------------     ------------------
                      <S>                                                         <C>                   <C>
                      Balance, beginning of year                                  $       2,559,153     $        1,825,319
                         Provision for loan losses                                          335,000              1,470,000
                         Loans charged off                                                 (864,984)              (803,942)
                         Recoveries of loans previously charged off                         171,360                 67,776
                                                                                  -----------------     ------------------
                      Balance, end of year                                        $       2,200,529     $        2,559,153
                                                                                  =================     ==================
</TABLE>

         The Bank had no loans which it considered to be impaired other than the
         loans on which the accrual of interest had been discontinued. The total
         recorded investment in impaired loans was $2,835,824 and $1,808,864 at
         December 31, 2000 and 1999, respectively. These loans had related
         allowances for loan losses of approximately $853,000 and $661,000 at
         December 31, 2000 and 1999, respectively. The average recorded
         investment in impaired loans for 2000 and 1999 was approximately
         $3,069,000 and $1,507,000, respectively. There was no significant
         amount of interest income recognized on impaired loans in 2000 or 1999.

         In the ordinary course of business, the Bank has granted loans to
         certain related parties, including directors, executive officers, and
         their affiliates. The interest rates on these loans were substantially
         the same as rates prevailing at the time of the transaction and
         repayment terms are customary for the type of loan. Changes in related
         party loans for the years ended December 31, 2000 and 1999 are as
         follows:

<TABLE>
<CAPTION>
                                                                                        2000                 1999
                                                                                  ---------------      ---------------
                 <S>                                                              <C>                  <C>
                 Balance, beginning of year                                       $     2,214,344      $     1,736,075
                    Advances                                                            2,417,524              665,881
                    Repayments                                                         (1,654,825)            (187,612)
                                                                                  ---------------      ---------------
                 Balance, end of year                                             $     2,977,043      $     2,214,344
                                                                                  ===============      ===============
</TABLE>

                                      50
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4.  PREMISES AND EQUIPMENT

         Premises and equipment are summarized as follows:

<TABLE>
<CAPTION>
                                                                                                 December 31,
                                                                                    ----------------------------------------
                                                                                           2000                  1998
                                                                                    -----------------     -----------------
                      <S>                                                           <C>                   <C>
                      Land                                                          $       1,050,428     $         514,235
                      Buildings and improvements                                            2,821,352             2,077,578
                      Furniture and equipment                                               2,273,935             1,404,614
                      Leasehold improvements                                                   14,468                    -
                      Construction in progress                                                 56,557               661,409
                                                                                    -----------------     -----------------
                                                                                            6,216,740             4,657,836
                      Accumulated depreciation                                              1,540,611             1,249,599
                                                                                    -----------------     -----------------
                                                                                    $       4,676,129     $       3,408,237
                                                                                    =================     =================
</TABLE>


NOTE 5.  LEASE COMMITMENT

         The Company has leased office space under a noncancellable
         agreement which expires in September 2005 and requires minimum
         annual rental payments.

         Total minimum rental payments at December 31, 2000 are due as
follows:

             During the year ending December 31,
                2001                                                    27,660
                2002                                                    27,660
                2003                                                    27,660
                2004                                                    27,660
                2005                                                    20,745
                                                                   -----------
                                                                   $   131,385
                                                                   ===========

                                      51
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6.  DEPOSITS

         The aggregate amount of time deposits in denominations of $100,000 or
         more at December 31, 2000 and 1999 was $28,103,111 and $20,354,848,
         respectively. The scheduled maturities of time deposits at December 31,
         2000 are as follows:

                2001                                             $  72,661,173
                2002                                                 4,549,260
                2003                                                   623,898
                2004                                                   194,968
                2005                                                    15,997
                Due after five years                                   422,931
                                                                 -------------
                                                                 $  78,468,227
                                                                 =============

         Brokered deposits of $13,851,305 and $3,800,995 are included in time
         deposits at December 31, 2000 and 1999, respectively.

NOTE 7.  FEDERAL HOME LOAN BANK BORROWINGS

         During 2000 and 1999, the Bank obtained funding for mortgage loans from
         the Federal Home Loan Bank of Atlanta ("FHLB"). At December 31, 2000
         and 1999, the advances had a weighted average interest rate of 6.20%
         and 5.81%, respectively. The Bank's advances from the FHLB are
         collateralized by a blanket floating lien on qualifying first mortgage
         loans and pledging of the Bank's stock in the FHLB. A summary of the
         Bank's borrowings from the FHLB for the years ended December 31, 2000
         and 1999 follows:

                                                       2000            1999
                                                  -------------   -------------
             Balance, beginning of year           $   5,888,829   $   6,500,500
                  Advances                            7,000,000       1,000,000
                  Repayments                         (1,603,672)     (1,611,671)
                                                  -------------   -------------
             Balance, end of year                 $  11,285,157   $   5,888,829
                                                  =============   =============

         At December 31, 2000, scheduled maturities of FHLB borrowings are as
         follows:


             For the year ending December 31,
             --------------------------------
               2001                                           $ 2,490,035
               2002                                               147,002
               2003                                             3,121,043
               2004                                             1,011,014
               2005                                                22,000
               Due after five years                             4,494,063
                                                              -----------
                                                              $11,285,157
                                                              ===========

                                      52
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8.  EMPLOYEE BENEFIT PLAN

         The Company provides a 401(k) plan for qualified employees to defer up
         to 10% of their salary with matching contributions from the Company
         made at the discretion of the Board of Directors. Contributions and
         administrative expenses charged to expense during 2000 and 1999
         amounted to $36,489 and $31,560, respectively.

NOTE 9.  INCOME TAXES

         The provision for income taxes consists of the following:


<TABLE>
<CAPTION>
                                                                                               Years Ended December 31,
                                                                                        -----------------------------------
                                                                                               2000                1999
                                                                                        ----------------    ---------------
                      <S>                                                               <C>                 <C>
                      Current                                                           $        369,394    $       315,546
                      Deferred                                                                   141,625           (159,224)
                                                                                        ----------------    ---------------
                                                                                        $        511,019    $       156,322
                                                                                        ================    ===============
</TABLE>

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

<TABLE>
<CAPTION>
                                                                                    Years Ended December 31,
                                                                   ----------------------------------------------------------
                                                                               2000                           1999
                                                                   ----------------------------   ---------------------------
                                                                       Amount         Percent         Amount         Percent
                                                                   -------------     --------     --------------     --------
               <S>                                                 <C>               <C>           <C>               <C>
               Income tax at statutory rate                        $     541,606        34  %     $      146,690        34 %
                 Miscellaneous permanent differences, net                (30,587)       (2)                9,632         2
                                                                   -------------     --------     --------------     --------
               Provision for income taxes                          $     511,019        32  %     $      156,322        36 %
                                                                   =============     ========     ==============     ========
</TABLE>

                                      53
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9.  INCOME TAXES (Continued)

         The components of deferred income taxes are as follows:

<TABLE>
<CAPTION>
                                                                                                    December 31,
                                                                                        -------------------------------------
                                                                                               2000                1999
                                                                                        ----------------    ----------------
                      <S>                                                               <C>                 <C>
                      Deferred tax assets:
                         Allowance for loan losses                                      $        574,403    $        738,733
                         Nonaccrual loan interest receivable                                      65,200              38,635
                         Securities available for sale                                            16,313             192,804
                                                                                        ----------------    ----------------
                                                                                                 655,916             970,172
                                                                                        ----------------    ----------------

                      Deferred tax liabilities:
                         Premises and equipment                                                   91,383              87,523
                                                                                        ----------------    ----------------

                      Net deferred tax assets                                           $        564,533    $        882,649
                                                                                        ================    ================
</TABLE>

NOTE 10. EARNINGS PER COMMON SHARE

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

<TABLE>
<CAPTION>
                                                                              Year Ended December 31, 2000
                                                                ---------------------------------------------------------
                                                                     Income              Shares            Per Share
                                                                  (Numerator)        (Denominator)           Amount
                                                                ---------------     -----------------   -----------------
                    <S>                                         <C>                 <C>                 <C>
                    Basic earnings per share
                       Net income                               $     1,081,942            2,469,192    $           0.44
                                                                                                        ================

                    Effect of Dilutive Securities
                       Stock options                                          -                9,605
                                                                ---------------     ----------------
                    Dilutive earnings per share
                       Net income                               $     1,081,942            2,478,797    $           0.44
                                                                ===============     ================    ================
</TABLE>

                                      54
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10. EARNINGS PER COMMON SHARE (Continued)

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

                    Effect of Dilutive Securities
                       Stock options                                          -               24,648
                                                                ----------------    ----------------
                    Dilutive earnings per share
                       Net income                               $        275,119           2,512,884    $           0.11
                                                                ================    ================    ================
</TABLE>

NOTE 11. COMMITMENTS AND CONTINGENCIES

         The Bank is party to financial instruments with off-balance-sheet risk
         in the normal course of business to meet the financing needs of its
         customers. These financial instruments include commitments to extend
         credit and standby letters of credit. They involve, to varying degrees,
         elements of credit risk and interest rate risk in excess of the amount
         recognized in the balance sheets.

         The Bank's exposure to credit loss in the event of nonperformance by
         the other party to the financial instrument for commitments to extend
         credit and standby letters of credit is represented by the contractual
         amount of those instruments. The Bank uses the same credit policies in
         making commitments and conditional obligations as it does for on-
         balance-sheet instruments. A summary of the Bank's commitments is as
         follows:

<TABLE>
<CAPTION>
                                                                                                   December 31,
                                                                                       -------------------------------------
                                                                                              2000                 1999
                                                                                       ----------------     ----------------
                                <S>                                                    <C>                  <C>
                                Commitments to extend credit                           $     14,349,504     $     12,304,272
                                Standby letters of credit                                       610,455              705,405
                                                                                       ----------------     ----------------
                                                                                       $     14,959,959     $     13,009,677
                                                                                       ================     ================
</TABLE>

                                      55
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11.  COMMITMENTS AND CONTINGENGIES (Continued)

          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. Since many of the commitments are expected to expire without
          being drawn upon, the total commitment amounts do not necessarily
          represent future cash requirements. The Bank evaluates each customer's
          creditworthiness on a case-by-case basis. The amount of collateral
          obtained, if deemed necessary by the Bank upon extension of credit, is
          based on management's credit evaluation of the customer.

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

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

NOTE 12.  CONCENTRATIONS OF CREDIT

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

          Approximately 81% of the Company's loan portfolio is concentrated in
          real estate loans, of which 9% consists of construction loans. A
          substantial portion of these loans are secured by real estate in the
          Company's primary market area. Accordingly, the ultimate
          collectibility of the loan portfolio is susceptible to changes in
          market conditions in the Company's primary market area. The other
          significant concentrations of credit by type of loan are set forth in
          Note 3.

          The Bank, as a matter of policy, does not generally extend credit to
          any single borrower or group of related borrowers in excess of 25% of
          statutory capital, or approximately $1,525,000.

                                      56
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13.  RESTRICTED STOCK, STOCK OPTIONS AND STOCK WARRANTS

          Restricted Stock

             In August 1994, the Company granted 9,260 shares of restricted
             stock to four key employees. Of the above shares, 8,100 were
             forfeited in 1997, and the remaining 1,160 shares vested in August
             1999. In July 1995, the Company granted 62,570 shares of restricted
             stock to eight directors. In 1997, 22,558 of these shares were
             forfeited. In December 1998, the Company granted 4,000 shares of
             restricted stock to two directors. All of the remaining 44,012
             shares will be fully vested by the end of the seventh year from the
             date of the grant. The cost of the restricted stock is being
             amortized on the straight-line method over the applicable vesting
             periods. The amortization expense on restricted stock was $36,296
             and $37,164 for the years ended December 31, 2000 and 1999,
             respectively, and the same amounts were credited to capital
             surplus.

          Stock Options

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

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

                                      57
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

         Stock Options (Continued)

          A summary of the status of the three plans at December 31, 2000 and
          1999, and changes during the years ended on those dates, is as
          follows:

<TABLE>
<CAPTION>
                                                                          2000                           1999
                                                              ----------------------------   ------------------------------
                                                                               Weighted-                      Weighted-
                                                                                Average                        Average
                                                                                Exercise                       Exercise
                                                                 Number          Price          Number          Price
                                                              -----------    -------------   -----------     --------------
                    <S>                                       <C>            <C>                <C>             <C>
                    Under option, beginning of the year           188,775    $        7.63       149,805     $       6.89
                       Granted                                      6,000             6.27        79,258             8.43
                       Exercised                                        -               -        (27,123)            6.41
                       Forfeited                                   (2,000)            6.84       (13,165)            6.65
                                                             ------------                    -----------
                    Under option, end of year                     192,775             7.54       188,775             7.63
                                                             ============                    ===========

                    Exercisable at end of year                    164,939                        148,275
                                                             ============                    ===========

                    Weighted-average fair value per
                       option of options granted
                       during year                               $   3.44                      $    3.60
                                                             =============                   ===========
</TABLE>

          Additional information about options outstanding at December 31, 2000
is as follows:

<TABLE>
<CAPTION>
                                         Options Outstanding                                    Options Exercisable
              --------------------------------------------------------------------------- --------------------------------
                                                            Weighted-       Weighted-                        Weighted-
                     Range of                                Average         Average                          Average
                     Exercise              Number          Contractual       Exercise         Number          Exercise
                      Prices             Outstanding      Life in Years       Price        Outstanding         Price
              ----------------------- -----------------   --------------- --------------- --------------   --------------
              <S>                     <C>                  <C>            <C>             <C>              <C>
                  $4.00 - $4.99                  24,254        1.51       $         4.04          24,254   $         4.04
                  $6.00 - $6.99                  67,049        7.71                 6.51          50,047             6.45
                  $7.00 - $7.99                  10,000        8.02                 7.30          10,000             7.30
                  $8.00 - $8.99                   4,966        9.76                 8.36           4,966             8.36
                  $9.00 - $9.99                  86,506        8.79                 9.41          75,672             9.44
                                      -----------------                                   --------------
                                                192,775                                          164,939
                                      =================                                   ==============
</TABLE>

                                      58
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

         Stock Options (Continued)

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

<TABLE>
<CAPTION>
                                                                                   December 31,
                                                        -----------------------------------------------------------------
                                                                      2000                              1999
                                                        ---------------------------------  ------------------------------
                                                                              Basic                             Basic
                                                              Net           Net Income           Net          Net Income
                                                             Income         Per Share          Income         Per Share
                                                        ---------------   -------------    --------------   -------------
                       <S>                              <C>               <C>              <C>              <C>
                       As reported                      $     1,081,942   $        0.44    $      275,119   $        0.11
                       Stock based compensation,
                          net of related tax effect             (37,401)           (.02)         (111,392)          (0.04)
                                                        ---------------   -------------    --------------   -------------
                       As adjusted                      $     1,044,541   $        0.42    $      163,727   $        0.07
                                                        ===============   =============    ==============   =============
</TABLE>

          The fair value of the ions granted in 2000 was based upon the
          discounted value of future cash flows of the options using the
          following assumptions:


<TABLE>
                       <S>                                                                                        <C>
                       Risk-free interest rate                                                                       5.65%
                       Expected life of the options                                                               10 years
                       Expected dividend yield                                                                       1.22%
                       Expected volatility                                                                          44.28%
</TABLE>

                                      59
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14.  REGULATORY MATTERS

          The Bank is subject to certain restrictions on the amount of dividends
          that may be declared without prior regulatory approval. At December
          31, 2000, approximately $600,800 of the Bank's retained earnings were
          available for dividend declaration without regulatory approval.

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

          Quantitative measures established by regulation to ensure capital
          adequacy require the Company and the Bank to maintain minimum amounts
          and ratios of total and Tier I capital to risk-weighted assets and of
          Tier I capital to average assets. Management believes, as of December
          31, 2000, the Company and the Bank met all capital adequacy
          requirements to which it is subject.

          As of December 31, 2000, the most recent notification from the Federal
          Deposit Insurance Corporation categorized the Bank as well capitalized
          under the regulatory framework for prompt corrective action. To be
          categorized as well capitalized, the Bank must maintain minimum total
          risk-based, Tier I risk-based, and Tier I leverage ratios as set forth
          in the following table. There are no conditions or events since that
          notification that management believes have changed the Bank's
          category.

                                      60
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14.  REGULATORY MATTERS (Continued)

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

<TABLE>
<CAPTION>
                                                                                                       To Be Well
                                                                              For Capital           Capitalized Under
                                                                               Adequacy             Prompt Corrective
                                                       Actual                  Purposes             Action Provisions
                                                ---------------------    ---------------------    ---------------------
                                                   Amount       Ratio       Amount       Ratio       Amount       Ratio
                                                ------------    -----    ------------    -----    ------------    -----
   <S>                                          <C>             <C>      <C>             <C>      <C>             <C>
   As of December 31, 2000
     Total Capital to Risk Weighted Assets
          Consolidated                          $ 15,321,300    15.0%    $  8,164,900     8.0%       - - - N/A - - -
          Bank                                  $ 12,690,600    12.4%    $  8,162,000     8.0%    $ 10,202,500    10.0%
     Tier I Capital to Risk Weighted Assets
          Consolidated                          $ 14,034,100    13.8%    $  4,082,500     4.0%       - - - N/A - - -
          Bank                                  $ 11,403,800    11.2%    $  4,081,000     4.0%    $  6,121,500     6.0%
     Tier I Capital to Average Assets
          Consolidated                          $ 14,034,100    10.0%    $  5,636,200     4.0%       - - - N/A - - -
          Bank                                  $ 11,403,800     8.1%    $  5,634,700     4.0%    $  7,043,400     5.0%

   As of December 31, 1999
     Total Capital to Risk Weighted Assets
          Consolidated                          $ 14,767,500    15.9%    $  7,432,000     8.0%       - - - N/A - - -
          Bank                                  $ 11,401,300    12.3%    $  7,416,600     8.0%    $  9,270,800    10.0%
     Tier I Capital to Risk Weighted Assets
          Consolidated                          $ 13,589,000    14.6%    $  3,716,000     4.0%       - - - N/A - - -
          Bank                                  $ 10,225,200    11.0%    $  3,708,300     4.0%    $  5,562,500     6.0%
     Tier I Capital to Average Assets
          Consolidated                          $ 13,589,000    10.8%    $  5,020,200     4.0%       - - - N/A - - -
          Bank                                  $ 10,225,200     8.2%    $  5,016,300     4.0%    $  6,270,400     5.0%
</TABLE>


NOTE 15.  PENDING MERGER

          The Company has entered into a definitive merger agreement with ABC
          Bancorp, Inc., a financial institutions holding company with
          headquarters in Moultrie, Georgia, whereby ABC would acquire all of
          the outstanding stock of the Company in exchange for a combination of
          cash and ABC's common stock. The merger is subject to approval by the
          Company's shareholders and certain regulatory authorities and the
          registration of ABC's common stock to be issued in connection with the
          merger. As a result of the merger, The First Bank of Brunswick, a
          wholly-owned subsidiary of the Company, will become a wholly-owned
          subsidiary of ABC. The First Bank of Brunswick will continue to
          conduct its normal operations as a wholly-owned subsidiary of ABC.

                                      61
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16.  FAIR VALUE OF FINANCIAL INSTRUMENTS

          The fair value of a financial instrument is the current amount that
          would be exchanged between willing parties, other than in a forced
          liquidation. Fair value is best determined based upon quoted market
          prices. However, in many instances, there are no quoted market prices
          for the Bank's various financial instruments. In cases where quoted
          market prices are not available, fair values are based on estimates
          using present value or other valuation techniques. Those techniques
          are significantly affected by the assumptions used, including the
          discount rate and estimates of future cash flows. Accordingly, the
          fair value estimates may not be realized in an immediate settlement of
          the instrument. SFAS 107 excludes certain financial instruments and
          all nonfinancial instruments from its disclosure requirements.
          Accordingly, the aggregate fair value amounts presented may not
          necessarily represent the underlying fair value of the Bank.

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

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

          Securities

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

          Loans

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

          Deposits:

            The carrying amounts of demand deposits, savings deposits, and
            variable-rate certificates of deposit approximate their fair values.
            Fair values for fixed-rate certificates of deposit are estimated
            using a discounted cash flow calculation that applies interest rates
            currently being offered on certificates to a schedule of aggregated
            expected monthly maturities on time deposits.

                                      62
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16.  FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

          Federal Home Loan Bank Borrowings

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

          Off-Balance-Sheet Instruments

            Fair values of the Bank's off-balance-sheet financial instruments
            are based on fees currently charged to enter into similar
            agreements. Since the majority of the Bank's off-balance-sheet
            instruments consist of nonfee-producing, variable-rate commitments,
            the Bank has determined they do not have a distinguishable fair
            value.

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

<TABLE>
<CAPTION>
                                                       December 31, 2000                 December 31, 1999
                                                 ------------------------------    ------------------------------
                                                   Carrying           Fair           Carrying           Fair
                                                    Amount            Value           Amount            Value
                                                 -------------    -------------    -------------    -------------
<S>                                              <C>              <C>              <C>              <C>
      Financial assets:
         Cash and due from banks,
            interest-bearing deposits in
            banks, and federal funds sold        $   8,999,155    $   8,999,155    $  10,976,400    $  10,976,400
         Securities                                 18,930,924       18,930,924       19,244,799       19,244,799
         Loans                                     111,202,027      111,837,000       95,687,196       94,784,000

      Financial liabilities:
         Deposits                                  120,815,343      122,716,000      112,742,906      111,556,000
         FHLB borrowings                            11,285,157       11,653,000        5,888,829        5,572,000
</TABLE>

                                      63
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17. PARENT COMPANY FINANCIAL INFORMATION

         The following information presents the condensed balance sheets,
         statements of income and cash flows for Golden Isles Financial
         Holdings, Inc. as of and for the years ended December 31, 2000 and
         1999.

<TABLE>
<CAPTION>

                                                              CONDENSED BALANCE SHEETS

                                                                                               2000                 1999
                                                                                        ----------------     ----------------
                          <S>                                                           <C>                  <C>
                                                    Assets
                                                    ------

                          Cash                                                          $      2,619,178     $      3,269,789
                          Investment in subsidiary                                            11,372,155            9,850,933
                          Premises and equipment, net                                                 -                 3,922
                          Other assets                                                            35,836              104,202
                                                                                        ----------------     ----------------

                               Total assets                                             $     14,027,169     $     13,228,846
                                                                                        ================     ================

                                     Liabilities and Stockholders' Equity
                                     ------------------------------------

                       Liabilities, other                                               $         24,737     $         14,154
                                                                                        ----------------     ----------------

                       Stockholders' equity                                                   14,002,432           13,214,692
                                                                                        ----------------     ----------------

                               Total liabilities and stockholders' equity               $     14,027,169     $     13,228,846
                                                                                        ================     ================
</TABLE>

                                      64
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17.  PARENT COMPANY FINANCIAL INFORMATION (Continued)

<TABLE>
<CAPTION>
                                                         CONDENSED STATEMENTS OF INCOME

                                                                                              2000                1999
                                                                                       ---------------     ---------------
                      <S>                                                              <C>                 <C>
                      Income
                         Interest                                                      $            61     $        66,866
                         Other                                                                  19,635              20,645
                                                                                       ---------------     ---------------
                                Total income                                                    19,696              87,511
                                                                                       ---------------     ---------------


                      Expense
                         General and administrative                                            225,520             311,597
                                                                                       ---------------     ---------------
                              Total expense                                                    225,520             311,597
                                                                                       ---------------       -------------


                              Loss before income tax benefits and
                                 equity in undistributed income of subsidiary                 (205,824)           (224,086)


                      Income tax benefits                                                     (109,145)            (73,365)
                                                                                       ---------------     ---------------


                               Loss before  equity in undistributed income
                                 of subsidiary                                                 (96,679)           (150,721)

                      Equity in undistributed income of subsidiary                           1,178,621             425,840
                                                                                       ---------------     ---------------


                              Net income                                               $     1,081,942     $       275,119
                                                                                       ===============     ===============
</TABLE>

                                      65
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17.  PARENT COMPANY FINANCIAL INFORMATION (Continued)

<TABLE>
<CAPTION>
                                                      CONDENSED STATEMENTS OF CASH FLOWS

                                                                                              2000                1999
                                                                                       ---------------     ---------------
                    <S>                                                                <C>                 <C>
                    OPERATING ACTIVITIES
                       Net income                                                      $     1,081,942     $       275,119
                       Adjustments to reconcile net income to net
                          cash used in operating activities:
                          Depreciation                                                           1,626               6,752
                          Undistributed income of subsidiaries                              (1,178,621)           (425,840)
                          Net loss on disposal of premises and equipment                         2,296               4,716
                          Change in other prepaids, receivables, deferrals and
                                accruals, net                                                   78,949            (328,137)
                                                                                       ---------------     ---------------


                            Net cash used in operating activities                              (13,808)           (467,390)
                                                                                       ---------------     ---------------


                    FINANCING ACTIVITIES
                       Purchase of treasury shares                                            (475,475)                -
                       Dividends paid                                                         (197,624)           (198,677)
                       Vesting of restricted stock                                              36,296              37,164
                       Proceeds from exercise of stock options                                     -               173,888
                                                                                       ---------------     ---------------


                                Net cash provided by (used in) financing activities           (636,803)             12,375
                                                                                       ---------------     ---------------


                    Net  decrease in cash                                                     (650,611)           (455,015)


                    Cash at beginning of year                                                3,269,789           3,724,804
                                                                                       ---------------     ---------------


                    Cash at end of year                                                $     2,619,178     $     3,269,789
                                                                                       ===============     ===============
</TABLE>

                                      66
<PAGE>

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

For the five-year period ended December 31, 2000, there has been no disagreement
between GIFH and its accountants, Mauldin & Jenkins, on any matter of accounting
principal, practice or financial statement disclosure. Mauldin & Jenkins served
as GIFH's accountants since 1996.

PART III

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

The Directors and executive officers of GIFH are as follows:

                                                                      Director
   Name (Age)                        Position With Company              Since
   ----------                        ---------------------              -----

L. McRee Harden (45)           Director                                  1988
Michael D. Hodges (47)         Director, President and CEO of Bank;      1991
Russell C. Jacobs, Jr. (65)    Director                                  1988
James M. Fiveash (70)          Director                                  1997
Claude Kermit Keenum (65)      Director                                  1988
Charles Ray Acosta (60)        Director                                  1997
Jimmy D. Veal (52)             Vice Chairman and Secretary/Treasurer     1987
J. Thomas Whelchel (66)        Chairman and CEO                          1988
Charles K. Werk (50)           Director                                  1999
Michael J. Kistler (49)        Director                                  2000

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

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

L. McRee Harden. Mr. Harden has been a director of the Company since July 1988,
and a director of the Bank since February 1990. Mr. Harden is the co-owner of a
company which operates a chain of approximately nine convenience stores in south
Georgia.

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

                                      67
<PAGE>

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

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

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

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

Jimmy D. Veal. Mr. Veal has been a Vice Chairman of the Company since July 1995.
He has been a director of the Company since June 1987 and Secretary/Treasurer of
the Company since September 1992. He has been a Vice Chairman of the Bank since
July 1995 and a director of the Bank since July 1990. He is the owner of a hotel
on Jekyll Island, Georgia.

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

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

                                      68
<PAGE>

Banking Industry with various institutions including SunTrust Bank,
Manufacturers Hanover, Melon Bank, and First Chicago.

Michael J. Kistler. Mr. Kistler obtained his Juris Doctorate from the Thomas M.
Cooley Law School in Lansing, Michigan in 1976 and practiced law until 1980. Mr.
Kistler currently develops real estate with a company he formed in 1982,
Development Associates, Inc. located in Savannah, Georgia. Development
Associates, Inc. focuses on conventional investment property acquisitions,
acquiring properties in Georgia and Alabama.

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

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

Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the Company under Rule 16a-3(d) during 2000 and Form 5 and amendments thereto
furnished to the Company during 1999, no person who, at any time during 2000,
was a director, officer or beneficial owner of more than 10% of any class of
equity securities of the Company failed to file on a timely basis any reports
required by Section 16(a) during the 2000 fiscal year or previously, except
Director Whelchel was late in filing on Form 5 for the year ended December 31,
1999.

                                      69
<PAGE>

ITEM 10.  EXECUTIVE COMPENSATION.

     The following table is a summary of compensation paid during the past four
years to the individual serving as the Company's CEO during 2000 and any other
executive officer who during 2000 earned in excess of $100,000 in annual salary
and bonus.

                          SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                    SECURITIES
                                                 OTHER ANNUAL  RESTRICTED/1/2/3/    UNDERLYING      LTIP     ALL OTHER
NAME AND POSITION     YEAR   SALARY    BONUS   COMPENSATION    STOCK AWARDS     OPTIONS/SARS(#)  PAYOUTS  COMPENSATION
----------------------------------------------------------------------------------------------------------------------
<S>                   <C>    <C>       <C>     <C>           <C>                <C>              <C>      <C>
J. THOMAS WHELCHEL    2000      -----    -----        -----             -----           3,000     -----      6,000/7/
CEO
                      1999      -----    -----        -----             -----           7,825     -----      6,000/7/

                      1998      -----    -----        -----             -----          14,006/4/  -----      1,500/7/

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

MICHAEL D. HODGES     2000    130,000    -----        -----             -----               0     -----      3,290/6/
PRESIDENT
FIRST BANK OF         1999    130,000    -----        -----             -----           1,668     -----      3,300/6/
BRUNSWICK
                      1998    130,000    -----        -----             -----          10,368/4/  -----      2,995/6/

                      1997    120,919    -----        -----             -----           -----     -----      -----

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

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

     /2/  The aggregate number of shares of restricted stock held by J. Thomas
Whelchel as of December 31, 2000, is 10,325 shares and the value of such shares
is $44,710 based on the terms of the following vesting schedule.  Under the
terms of the award of these restricted shares to Mr. Whelchel in 1995 ("1995
Restricted Stock") one-seventh of such shares (1,475) became vested on July 25,
1996; another one-seventh became vested on July 25, 1997; and an additional one-
seventh of such shares will vest on July 25 of each year thereafter until all
such shares have vested. If at any time Mr. Whelchel becomes neither a director
nor an executive officer of the Company or any subsidiary of the Company, then
he shall forfeit any shares of 1995 Restricted Stock which has not already
vested at the time of the event which triggers such forfeiture.

                                      70
<PAGE>

     /3/  The aggregate number of shares of restricted stock held by Michael D.
Hodges as of December 31, 2000, is 2,390 shares and the value of such shares is
$11,670, based on the following schedule.  Of the shares of restricted stock,
775 were awarded to Mr. Hodges in 1994 ("1994 Restricted Stock"), all of which
vested on August 16, 1999.  Under the terms of the award of 1,615 shares of
restricted stock awarded to Mr. Hodges in 1995 ("1995 Restricted Stock"), one-
seventh of such shares (230 shares) became vested on July 25, 1996; another one-
seventh became vested on July 25, 1997; and an additional one-seventh of such
shares will vest on July 25 of each year thereafter until all such shares have
vested.  If at any time Mr. Hodges becomes neither a director nor an executive
officer of the Company or any subsidiary of the Company, then he shall forfeit
any shares of 1995 Restricted Stock which has not already vested at the time of
the event which triggers such forfeiture.

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

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

     /6/  These amounts represent the Company's matching contribution to the
Company 401(k) plan for Mr. Hodges in 1998, 1999, and 2000.

     /7/  These amounts represent director's fees paid to Mr. Whelchel in 1998,
1999, and 2000.

                                      71
<PAGE>

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

<TABLE>
<CAPTION>
Name                  Shares acquired on   Value Realized    Number of securities underlying        Value of Unexercised
                      exercise (#)         (#)               Unexercised Options/SARS at FY-End     in-the-money options
                                                             (Exercisable/Unexercisable)            SARs at FY-End
                                                                                                    (Exercisable/Unexercisable)
<S>                   <C>                  <C>               <C>                                    <C>
J. Thomas Whelchel         ------           ------                      26,221/2/                          $   695/0/1/

Michael D. Hodges          ------           ------                      42,160/3/                          $50,154/0/1/
</TABLE>

     No stock options were exercised by the listed individuals and there were no
outstanding SARs during fiscal year 2000.

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

     /1/ Dollar values have been calculated by determining the difference
between the estimated fair market value of the Company's common stock at
February 16, 2001 ($6.50) and the exercise prices of the options.

     /2/ On January 18, 1996, options on 1,390 at $6.00 per share were awarded
to Mr. Whelchel as compensation with respect to his services as a director.  In
1998 he was granted options on 3,836 shares at $9.36 per share, 2,500 shares at
$9.54 per share, 2,500 shares at $9.71 per share, 2,500 shares at $9.17 per
share and 2,620 shares at $9.64 per share.  The 3000 options granted in 2000 are
listed in the table on the following page.  In 1999 he was granted options on
2,500 shares at $9.49 per share, 385 shares at $9.40 per share, 565 shares at
$9.23 per share, 300 shares at $9.16 per share, 658 shares at $8.36 per share,
and 713 shares at $6.84 per share.  In 2000 he was granted options on 3,000
shares at $6.54 per share.

     /3/ Michael D. Hodges has the right to acquire 42,160 shares of the
Company's common stock pursuant to stock options issued by the Company to Mr.
Hodges.  Of the 42,160 stock options, 18,750 are exercisable at the price of
$4.00 per share, 1,003 are exercisable at the price of $4.60 per share, 1,408
are exercisable at the price of $6.25 per share, 6,921 are exercisable at the
purchase price of $6.50 per share, 2,042 are exercisable at the price of $6.00
per share, 5,000 shares are exercisable at $7.60 per share, 3,165 shares are
exercisable at $9.36 per share and 2,203 shares are exercisable at $9.64 per
share, 265 shares are exercisable at $9.40 per share, 406 shares are exercisable
at $9.23 per share, 449 shares are exercisable at $8.36 per share, and 548
shares are exercisable at $6.84 per share.  No options were granted to Mr.
Hodges in 2000.

                                      72
<PAGE>

                 OPTION/SAR GRANTS IN LAST FISCAL YEAR (2000)
                              (Individual Grants)

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
                     Number of Securities       Percent of Total Options/SARs
      Name         Underlying Options/SARs         Granted to Employees in         Exercise or Base Price      Expiration
                         Granted (#)                     Fiscal Year                     ($/share)                Date
--------------------------------------------------------------------------------------------------------------------------
<S>                <C>                          <C>                                <C>                         <C>
CEO - J. Thomas            3,000                             50%                           $6.54                01/26/10
 Whelchel
--------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      73
<PAGE>

EMPLOYMENT AGREEMENTS

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

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

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

The following table sets forth share ownership information as of December 31,
2000 with respect to any person known to GIFH to be a beneficial owner of more
than 5% of GIFH's Common Stock, including Common Stock owned in the form of
Units.  The information as to beneficial ownership was furnished to GIFH by or
on behalf of the persons named.  Unless otherwise indicated, each of the
shareholders has sole voting and investment power with respect to the shares of
Common Stock beneficially owned.  Percentage ownership is calculated based on
outstanding shares plus outstanding options that are exercisable within sixty
(60) days.

                                      74
<PAGE>

Security Ownership of Certain Beneficial Owners*

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

1.   Michael J. Kistler             165,000       6.45%
109 Modena Island Drive
Savannah, Georgia 31411

2.   Charles Werk                   148,394       5.81%
203 Medinah
St. Simons Island, Georgia 31522

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

The following table sets forth share ownership information as of December 31,
2000, with respect to (i) each director and named executive officer of GIFH who
beneficially owns Common Stock, including Common Stock owned in the form of
Units, and (ii) all directors and named executive officers of GIFH as a group.
The information as to beneficial ownership was furnished to GIFH by or on behalf
of the persons named.  Unless otherwise indicated, each of the shareholders has
sole voting and investment power with respect to the shares beneficially owned.
Percentage ownership is calculated based on outstanding shares plus outstanding
options that are exercisable within sixty (60) days.

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<PAGE>

Security Ownership of Management*

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

L. McRee Harden (1)                     24,745                .97%
P.O. Box 2369
Darien, GA 31305

Michael D. Hodges (2)                   91,838               3.59%
207 Dunbarton Drive
St. Simons Island, GA 31522

Russell C. Jacobs, Jr. (3)              24,769                .97%
308 Oak Grove Island Drive
Brunswick, GA 31525

C. Kermit Keenum (4)                    23,687                .93%
100 Old Mountain Road
Powder Springs, GA 30073

Jimmy D. Veal (5)                       92,458               3.62%
290 Osprey
Brunswick, GA 31525

J. Thomas Whelchel (6)                  59,999               2.35%
22 Boundary Lane
St. Simons Island, GA 31522

Charles R. Acosta (7)                   36,173               1.41%
226 Medinah
St. Simons Island, GA 31522

James M. Fiveash (8)                    16,167                .63%
605 King Cotton Row
Brunswick, GA 31525

Charles K. Werk (9)                    148,394               5.81%
203 Medinah
St. Simons Island, GA 31522

Michael J. Kistler (10)                165,000               6.45%
109 Modena Island Drive                -------               ----
Savannah, GA 31411

All Directors and Executive            683,230              26.73%

                                      76
<PAGE>

Officers as a Group (10 persons)
*Information relating to beneficial ownership of Common Stock is based upon
"beneficial ownership" concepts set forth in rules of the SEC under Section
13(d) of the Act.  Under such rule, a person is deemed to be a "beneficial
owner" of a security if that person has or shares "voting power," which includes
the power to vote or direct the voting of such security, or "investment power,"
which includes the power to dispose of, or to direct the disposition of, such
security.  A person is also deemed to be a beneficial owner of any security of
which that person has the right to acquire beneficial ownership within sixty
(60) days.  Under the rules, more than one person may be deemed to be a
beneficial owner of the same securities, and a person may be deemed to be a
beneficial owner of securities as to which he has no beneficial interest.  For
instance, beneficial ownership includes spouses, minor children and other
relatives residing in the same household, and trusts, partnerships, corporations
or deferred compensation plans which are affiliated with the principal.

(1)   Includes 1,250 shares owned by his wife for which he disclaims beneficial
      ownership. Also includes the right to acquire 9,745 shares pursuant to
      vested options.
(2)   Includes 14,500 shares owned by his wife for which he disclaims beneficial
      ownership. Also includes the right to acquire 42,160 shares pursuant to
      vested options.
(3)   Includes the right to acquire 9,269 shares pursuant to vested options.
(4)   Includes the right to acquire 8,187 shares pursuant to vested options.
(5)   Includes the right to acquire 12,518 shares pursuant to vested options and
      18,875 shares owned by his two adult sons for which he disclaims
      beneficial ownership.
(6)   Includes 25 shares owned by Mr Whelchel's daughter and 1,500 owned by his
      wife for which he disclaims beneficial ownership, and 26,221 shares
      pursuant to vested options.
(7)   Includes the right to acquire 5,547 shares pursuant to vested options.
(8)   Includes 8,000 shares owned individually by Mr. Fiveash and 1,250 shares
      deemed beneficially owned by him in custodian accounts for a minor child.
      Also includes the right to acquire 6,917 shares pursuant to vested
      options.
(9)   Includes the right to acquire 1,264 shares pursuant to vested options and
      1,000 shares owned by his wife for which he disclaims beneficial
      ownership.
(10)  Includes 3,000 shares deemed beneficially owned by him in custodian
      accounts for minor children.

Item 12.  Certain Relationships and Related Transactions.

During 2000, the Bank loaned funds to certain of GIFH's executive officers and
directors or to businesses in which such persons had an interest.  All such
loans were: (a) in the ordinary course of business, (b) on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons, and (c) did not involve
more than the normal risk of collectibility or present other unfavorable
features.

                                      77
<PAGE>

                                    PART IV

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

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

Exhibit No. Description

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

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

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

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

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

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

                                      78
<PAGE>

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

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

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

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

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

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

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

10(l)     Sales Contract dated November 29, 1995 between 200 Plantation Chase
          Company, a Georgia general partnership, and the Registrant filed as
          Exhibit 10(l) to the

                                      79
<PAGE>

          Registrant's Annual Report on Form 10-KSB (File Number 33-19735-A),
          filed with the Commission on March 31, 1996 and incorporated herein by
          reference).

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

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

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

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

10(q)     Agreement and Plan of Merger by and between ABC Bancorp and Golden
          Isles Financial Holdings, Inc. (filed as Exhibit 2 to Registrant's
          current report on Form 8-K, filed with the Commission on February 21,
          2001, and incorporated herein by reference).

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

24        Power of Attorney.

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

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

                                      80
<PAGE>

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

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

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

B.    Reports on Form 8-K.

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

                                      81
<PAGE>

                                  SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been duly signed on behalf of Registrant by the undersigned, thereunto duly
authorized, in the City of St. Simons Island, State of Georgia, on March 28,
2001.

                             GOLDEN ISLES FINANCIAL HOLDINGS, INC.

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

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

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons in the capacities indicated on
March 28, 2001.

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

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

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

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

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

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

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

                                      82
<PAGE>

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

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

/s/ Michael J. Kistler            Director
----------------------------
Michael J. Kistler

                                      83
<PAGE>

INDEX TO EXHIBITS

Exhibit                                                  Sequential
Number          Description                             Page Number

None

                                      84