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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM
10-QSB/AAmendment No. 1
  þ
    
    QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For
the quarterly period ended March 31, 2006
 o
    
    TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission
File No. 000-24043
 ebank Financial Services, Inc.
  Georgia
    
    58-2349097(State of Incorporation)
    
    (I.R.S. Employer Identification No.)
 2410 Paces Ferry Road, Suite 190, Atlanta, Georgia 30339
 (770) 863-9225
 Not Applicable
 þ o
 o þ
   o þ




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EXPLANATORY NOTE




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TABLE OF CONTENTS  Part I. Financial InformationItem 1. Financial StatementsPart II. Other InformationItem 6. ExhibitsSIGNATURESEX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF CFOEX-32.1 SECTION 906 CERTIFICATION OF CEOEX-32.2 SECTION 906 CERTIFICATION OF CFO    Table of Contents  
 Part I. Financial Information
 
 Item 1. Financial Statements.
 ebank Financial Services, Inc. and Subsidiary
CONDENSED CONSOLIDATED BALANCE SHEETS
 March 31,
    
    
    December 31,2006
    
    
    2005(Unaudited)
    
    
    (Audited)ASSETSCash and due from banks
    
    $
    1,842,944
    
    
    $
    660,307Interest-bearing deposits in banks
    
    
    587,432
    
    
    
    529,467Federal funds sold
    
    
    20,246,000
    
    
    
    5,189,000Cash and cash equivalents
    
    
    22,676,376
    
    
    
    6,378,774Securities available for sale
    
    
    27,610,277
    
    
    
    21,789,026Other securities
    
    
    658,800
    
    
    
    621,400Loans, net of allowance for loan losses of
$649,556 and $805,461, respectively
    
    
    91,271,746
    
    
    
    94,600,789Premises and equipment, net
    
    
    465,642
    
    
    
    406,495Accrued interest receivable and other assets
    
    
    3,111,592
    
    
    
    3,392,370Total assets
    
    $
    145,794,433
    
    
    $
    127,188,854LIABILITIES AND SHAREHOLDERS EQUITYLiabilities:Deposits
    
    $
    125,326,124
    
    
    $
    106,784,000Other borrowings
    
    
    9,000,000
    
    
    
    9,000,000Accrued interest payable and other liabilities
    
    
    355,958
    
    
    
    385,104Total liabilities
    
    
    134,682,082
    
    
    
    116,169,104Shareholders equity:Series A preferred stock, $.01 par value, 8%
cumulative, convertible into one share of common
stock; 10,000,000 shares authorized; 2,300,912 and
2,316,912 issued and outstanding; accumulated
undeclared dividends of $1,420,892 and $1,316,514
(liquidation preference of $5,752,280 and $5,792,280
plus accumulated unpaid dividends)
    
    
    23,009
    
    
    
    23,169Common stock, $.01 par value, 10,000,000 shares
authorized, 6,463,679 and 6,440,991 shares issued and
outstanding
    
    
    64,637
    
    
    
    64,410Capital surplus
    
    
    23,360,218
    
    
    
    23,360,285Accumulated deficit
    
    
    (11,778,357
    )
    
    
    (11,963,855
    )Accumulated other comprehensive loss
    
    
    (557,156
    )
    
    
    (464,259
    )Total shareholders equity
    
    
    11,112,351
    
    
    
    11,019,750Total liabilities and shareholders equity
    
    $
    145,794,433
    
    
    $
    127,188,854
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ebank Financial Services, Inc. and Subsidiary
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 For the three months endedMarch 31,2006
    
    
    2005Interest income:Loans, including fees
    
    $
    1,935,837
    
    
    $
    1,518,922Interest-bearing deposits
    
    
    6,487
    
    
    
    385Investment securities:U.S. Government agencies and corporations
    
    
    344,603
    
    
    
    237,527Other investments
    
    
    11,861
    
    
    
    10,425Federal funds sold
    
    
    67,196
    
    
    
    26,090Total interest income
    
    
    2,365,984
    
    
    
    1,793,349Interest expense:Deposits
    
    
    1,017,852
    
    
    
    473,120Other borrowings
    
    
    74,195
    
    
    
    166,922Total interest expense
    
    
    1,092,047
    
    
    
    640,042Net interest income
    
    
    1,273,937
    
    
    
    1,153,307Provision for loan losses
    
    
    52,000
    
    
    
    27,000Interest income after provision for loan losses
    
    
    1,221,937
    
    
    
    1,126,307Other income:Deposit fees
    
    
    35,798
    
    
    
    28,746Miscellaneous
    
    
    28,734
    
    
    
    5,037Total other income
    
    
    64,532
    
    
    
    33,783Other expense:Salaries and other compensation
    
    
    471,403
    
    
    
    423,924Employee benefits
    
    
    104,607
    
    
    
    85,940Net occupancy and equipment expense
    
    
    205,931
    
    
    
    179,191Professional and other outside services
    
    
    136,735
    
    
    
    126,483Other expense
    
    
    182,294
    
    
    
    128,972Total other expenses
    
    
    1,100,970
    
    
    
    944,510Net earnings
    
    
    185,499
    
    
    
    215,580Preferred stock dividends paid during the quarter upon
conversion of shares of preferred stock
    
    
    (9,696
    )
    
    
    (2,036
    )Preferred stock dividends arising during the quarter
    
    
    (113,470
    )
    
    
    (116,843
    )Net earnings attributable to common stockholders
    
    $
    62,333
    
    
    $
    96,701Basic and fully diluted earnings per common share
    
    $
    .01
    
    
    $
    .02
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ebank Financial Services, Inc. and Subsidiary
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 For the three months endedMarch 31,2006
    
    
    2005Net earnings
    
    $
    185,499
    
    
    $
    215,580Other comprehensive income:Unrealized (losses) gains on securities available for sale:Holding losses arising during the period, net of
taxes of $56,841 and $92,344, respectively
    
    
    (92,898
    )
    
    
    (150,923
    )Comprehensive income
    
    $
    92,601
    
    
    $
    64,657
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ebank Financial Services, Inc. and Subsidiary
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 For the three months endedMarch 31,2006
    
    
    2005Cash flows from operating activities:Net earnings
    
    $
    185,499
    
    
    $
    215,580Adjustments to reconcile net earnings to net cash
provided by operating activities:Loss on sale and write-down of real estate owned
    
    
    127,916
    
    
    
    Net accretion of investment securities
    
    
    2,352
    
    
    
    1,717Depreciation expense
    
    
    42,846
    
    
    
    44,979Provision for loan losses
    
    
    52,000
    
    
    
    27,000Change in deferred loan fees and costs
    
    
    18,425
    
    
    
    14,777Change in other assets
    
    
    (417,218
    )
    
    
    18,758Change in accrued interest receivable
    
    
    52,231
    
    
    
    86,526Change in accrued interest payable
    
    
    42,595
    
    
    
    42,180Change in other liabilities
    
    
    (71,741
    )
    
    
    (36,827
    )Net cash provided by operating activities
    
    
    34,905
    
    
    
    414,690Cash flows from investing activities:Maturities of securities available for sale
    
    
    44,037
    
    
    
    1,000,000Purchase of securities available-for-sale
    
    
    (6,017,379
    )
    
    
    (1,038,595
    )Purchase of other securities
    
    
    (37,400
    )
    
    
    Proceeds from sale of other investments
    
    
    
    
    
    
    5,800Loan repayments, net of loans originated
    
    
    2,620,498
    
    
    
    (5,436,617
    )Proceeds from sale of other real estate owned
    
    
    1,212,811
    
    
    
    Purchases of premises and equipment
    
    
    (101,994
    )
    
    
    (34,583
    )Net cash used by investing activities
    
    
    (2,279,427
    )
    
    
    (5,503,995
    )Cash flows from financing activities:Net increase in deposits
    
    
    18,542,124
    
    
    
    12,848,829Proceeds from overnight borrowings
    
    
    
    
    
    
    2,959,000Repayments on other borrowings
    
    
    
    
    
    
    (11,500,000
    )Stock offering costs
    
    
    
    
    
    
    (2,600
    )Net cash provided by financing activities
    
    
    18,542,124
    
    
    
    4,305,229Change in cash and cash equivalents
    
    
    16,297,602
    
    
    
    (784,076
    )Cash and cash equivalents:Beginning of period
    
    
    6,378,774
    
    
    
    1,924,266End of period
    
    $
    22,676,376
    
    
    $
    1,140,190
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ebank Financial Services, Inc. and Subsidiary
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 NOTE 1  BASIS OF PRESENTATION
    Significant Accounting Policies
   Use of Estimates
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Stock Compensation Plans
 Accounting for Stock
Issued to Employees Accounting for Stock-Based Compensation Accounting for Stock-Based
Compensation Transition and Disclosure Share-Based Payment ,
   Weighted-Number of
    
    
    Range of Per
    
    
    Aggregate Per
    
    
    AggregateShares
    
    
    Option Price
    
    
    Share Price
    
    
    Option PriceOutstanding at
December 31, 2005
and March 31,
2006
    
    
    150,000
    
    
    $
    1.25
    
    
    
    1.25
    
    
    
    0.43
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Weighted-Weighted-
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsicOptions
    
    Shares
    
    
    Price
    
    
    Term
    
    
    ValueOutstanding at December 31,
2005
    
    
    468,917
    
    
    $
    2.08Granted
    
    
    85,000
    
    
    
    1.42Exercised
    
    
    0
    
    
    
    0Forfeited
    
    
    (33,417
    )
    
    
    3.20Expired
    
    
    0
    
    
    
    0Outstanding at March 31, 2006
    
    
    520,500
    
    
    $
    1.90
    
    
    
    7.6
    
    
    $
    68,300Exercisable at March 31, 2006
    
    
    425,500
    
    
    $
    2.01
    
    
    
    7.1
    
    
    $
    64,800
  For the three monthsendedMarch 31, 2006Expected volatility
    
    
    66.37
    %Expected dividend yield
    
    
    0
    %Expected life (in years)
    
    
    10.0Risk-free rate
    
    4.38% to 4.70
    %
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For the three monthsendedMarch 31, 2005Net earnings
attributable to common
stockholders
    As reported
    $
    96,701Effect of stock
options grants
    
    (3,058
    )Pro forma
    $
    93,643Basic earnings per share
    As reported
    $
    .02Pro forma
    $
    .01
 NOTE 2  EARNINGS PER COMMON SHARE
  For the three months endedMarch 31,2006
    
    
    2005Basic earnings per common share:Weighted average common shares outstanding
    
    
    6,444,772
    
    
    
    6,365,986Net earnings
    
    $
    185,499
    
    
    $
    215,580Preferred stock dividend paid upon conversion of
shares of preferred stock
    
    
    (9,696
    )
    
    
    (2,036
    )Preferred stock dividend accrued
    
    
    (113,470
    )
    
    
    (116,843
    )Net earnings attributable to common stockholders
    
    $
    62,333
    
    
    $
    96,701Basic and fully diluted earnings per common share
    
    $
    .01
    
    
    $
    .02
  NOTE 3  ISSUANCE OF COMMON STOCK
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NOTE 4 SUBSEQUENT EVENTS
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
    
    maintain at all times ebank Mortgages members equity of at least $1 million;
    
    maintain a maximum ratio of indebtedness to ebank Mortgages members equity of 15.00
to 1.00; and
    
    maintain net income of ebank Mortgage at $5,000 or more per fiscal quarter beginning
with the fiscal quarter ending December 31, 2006.
  
    
    grant liens on the assets of ebank Mortgage;
    
    incur additional future indebtedness other than:
 o
    
    current liabilities for taxes and assessments incurred in the ordinary course of business;o
    
    accounts payable incurred in the ordinary course of business; ando
    
    indebtedness for the acquisition of fixed assets, not to exceed
$100,000 in the aggregate at any time; and
 
    
    pay any dividend or distribution (including any repurchase or redemption of membership
interests), except to the extent necessary to pay an amount equal to the combined federal
and state tax liability (if any) of the members arising from their respective allocable
share of the earning and profits of ebank Mortgage as long as any such payment does not
result in a Default or an Event of Default;
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Part II. Other Information
 
 Item 6. Exhibits.
 Exhibit
    
    Description10.1
    
    
    Lease Agreement by and between the Company and Prentiss Properties Acquisition Partners, L.P.
dated June 30, 1999. (1)10.2
    
    
    First Amendment to Lease Agreement by and between the Company and Prentiss Properties
Acquisition Partners, L.P. dated August 18, 1999. (1)10.3
    
    
    Second Amendment to Lease Agreement by and between the Company and Cumberland Office Park,
LLC (as successor Landlord to Prentiss Properties Acquisition Partners, L.P.). (1)10.4
    
    
    Third Amendment to Lease Agreement by and between the Company and Home Depot U.S.A., Inc. (as
successor Landlord to Cumberland Office Park, LLC). (1)31.1
    
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.32.2
    
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
 
 (1)
    
    Filed with the Registrants Quarterly Report on Form 10-QSB on May 15, 2006, and incorporated
herein by this reference. 12




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SIGNATURES
  ebank Financial Services, Inc.Date: May 31, 2006
    By:
    /s/ James L. BoxJames L. BoxPresident and Chief Executive OfficerBy:
    /s/ Wayne W. ByersWayne W. ByersChief Financial Officer 13