<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  Form 10-KSB
(Mark One)

 X    Annual Report under Section 13 or 15(d) of the Securities Exchange Act of
---   1934
      For the fiscal year ended December 31, 2000
      or
     Transition Report under Section 13 or 15(d) of the Securities Exchange Act
---  of 1934
               For the transition period from _______ to _______

                         Commission File No. 000-25851

                              UNITY HOLDINGS, INC.
                              --------------------
                 (Name of Small Business Issuer in Its Charter)

                Georgia                                         58-2350609
              -----------                                     --------------
     (State or Other Jurisdiction                            (I.R.S. Employer
   of Incorporation or Organization)                        Identification No.)

      950 Joe Frank Harris Pkwy, S.E.
          Cartersville, Georgia                                   30121
     ---------------------------------                       -----------------
(Address of Principal Executive Offices)                         (Zip Code)

                                  (770) 606-0555
                -----------------------------------------------
                 Issuer's Telephone Number, Including Area Code

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

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

     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for past 90 days.
Yes    X       No
    ------        ------

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

     The issuer's net income for its most recent fiscal year was $487,000.  As
of December 31, 2000, 839,211 shares of Common Stock were issued and
outstanding.

     The aggregate market value of the Common Stock held by non-affiliates of
the Company on December 31, 2000 was $10,909,743.00.  This calculation is based
upon an estimate of the fair market value of the Common Stock by the Company's
Board of Directors of $13.00 per share.  There is not an active trading market
for the Common Stock and it is not possible to identify precisely the market
value of the Common Stock.

Transitional Small Business Disclosure Format.  (Check one): Yes      No  X
                                                                 ---     ---

                      DOCUMENTS INCORPORATED BY REFERENCE
None.

<PAGE>

     This Report contains statements which constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and the
Securities Exchange Act of 1934. These statements appear in a number of places
in this Report and include all statements regarding the intent, belief or
current expectations of the Company, its directors or its officers with respect
to, among other things: (i) the Company's financing plans; (ii) trends affecting
the Company's financial condition or results of operations; (iii) the Company's
growth strategy and operating strategy; and (iv) the declaration and payment of
dividends.  Investors are cautioned that any such forward-looking statements are
not guarantees of future performance and involve risks and uncertainties, and
that actual results may differ materially from those projected in the forward-
looking statements as a result of various factors discussed herein and those
factors discussed in detail in the Company's filings with the Securities and
Exchange Commission.

                                      -2-
<PAGE>

                              UNITY HOLDINGS, INC.

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


 Item                                                                 Page
Number                                                               Number
------                                                               ------
                                     PART I

 1.  Description of Business..........................................  4
 2.  Description of Property.......................................... 16
 3.  Legal Proceedings................................................ 17
 4.  Submission of Matters to a Vote of Security Holders.............. 17

                                   PART II

 5.  Market for Registrant's Common Stock and Related Security Holder
     Matters.......................................................... 17
 6.  Management's Discussion and Analysis of Financial Condition and
     Results of Operations............................................ 19
 7.  Consolidated Financial Report.................................... 38
 8.  Changes in and Disagreements with Accountants on Accounting
     and Financial Disclosure......................................... 61

                                   PART III

 9. Directors and Principal Officers of the Registrant................ 61
10. Executive Compensation............................................ 65
11. Security Ownership of Certain Beneficial Owners and Management.... 69
12. Certain Relationships and Related Transactions.................... 70

                                   PART IV

13. Exhibits and Reports on Form 8-K.................................. 70

                                      -3-
<PAGE>

Item 1.  Description of Business.
--------------------------------

General

     Unity Holdings, Inc. was incorporated in Georgia on October 8, 1997 as a
bank holding company to own and control all of the capital stock of Unity
National Bank.  Organizing activities for the Company began during the summer of
1997, consisting primarily of preparation and filing of a registration statement
for sale of the Company's stock, preparation and filing of the Bank's charter
application, acquisition of physical facilities, and hiring of staff.  On
November 30, 1998, the Federal Deposit Insurance Corporation approved the Bank's
application for deposit insurance, and on February 11, 1998, the Office of the
Comptroller of the Currency approved the Bank's charter application.  The Board
of Governors of the Federal Reserve approved the Company to be a bank holding
company on November 30, 1998.  The Bank began operations as a national bank on
November 30, 1998 at its main banking location in Cartersville, Georgia.  On
January 4, 1999, the Bank opened a branch office in Adairsville, Georgia.

Location and Service Area

     The Bank conducts a general commercial banking business in its service
area, emphasizing the banking needs of small-to-medium sized businesses,
professional concerns and individuals.  The Bank operates from a main office in
Cartersville, Georgia located at the corner of Joe Frank Harris Parkway and
Market Place Boulevard, S.E. in Cartersville, Georgia and a branch office
located at 7450 Adairsville Highway, NW, Adairsville, Georgia.  See "Facilities"
below.  The Bank draws most of its customer deposits and conducts most of its
lending transactions from within a primary service area of Bartow County,
Georgia, with a secondary market which includes the cities of Canton, Calhoun,
and Rome.

     Bartow County is located in northwest Georgia, approximately 40 miles from
the city of Atlanta.  Bartow County, which had a population of 64,000 in 1996
and a median effective buying income per household of $32,358, includes the
cities of Cartersville, Adairsville, Emerson, Kingston, Stilesboro, Taylorville
and White.  Bartow County is generally rectangular in shape and the main office
of the Bank is located in Cartersville, which is close to the southeast corner
of the county.  To the east and south of Cartersville is Lake Allatoona, which
is a natural barrier to the remainder of that part of the county and to a
portion of adjacent counties.  The primary markets for the Bank include the
cities of Cartersville and Adairsville, which are located in the northern and
southern parts of Bartow County and provide access for residents of the entire
county.

     According to data provided by the Georgia Department of Labor, which was
compiled in 1995, there are 1,241 businesses in Bartow County subject to
unemployment insurance laws.  Bartow County, like many small communities, has
many small businesses that are not subject to unemployment insurance laws and
are not reflected in this data.  There are 109 manufacturing companies, 149
construction companies, 285 retail companies, 114 wholesale companies, 74
transportation and public utility companies and 355 service companies in Bartow
County.  The largest

                                      -4-
<PAGE>

employers in the county include Shaw Industries, Inc. (carpet manufacturer)
1,933; Bartow County Board of Education, 1,400; First Brands Corporation
(plastic extruding company), 630; Bartow County Government, 600; Goodyear Tire
and Rubber Co. (tire manufacturer), 569; Wal-Mart Stores (retail sales), 529;
and nine other businesses with between 110 employees and 493 employees in
industries such as beer manufacturing, steel manufacturing, medical facility,
public utility, and carpet manufacturing.

Marketing Focus

     Most of the banks in the Bartow County area are now local branches of large
regional banks. Although size gives the larger banks certain advantages in
competing for business from large corporations, including higher lending limits
and the ability to offer services in other areas of Georgia and the Bartow
County area, the Company believes that there has been a void in the community
banking market in the Bartow County area and believes that the Bank successfully
fills this void.  As a result, the Company generally does not attempt to compete
for the banking relationships of large corporations, but concentrates its
efforts on small- to medium-sized businesses and on individuals. The Bank
advertises to emphasize the Company's local ownership, community bank nature,
and ability to provide more personalized service than its competition.

Deposits

     The Bank offers a full range of deposit services that are typically
available in most banks and savings and loan associations, including checking
accounts, commercial accounts, NOW accounts, savings accounts, and other time
deposits of various types, ranging from daily money market accounts to longer-
term certificates of deposit.  The transaction accounts and time certificates
are tailored to the Bank's principal market area at rates competitive to those
offered in the Bartow County area. In addition, the Bank offers certain
retirement account services, such as Individual Retirement Accounts (IRAs).  The
Bank solicits these accounts from individuals, businesses, associations and
organizations, and governmental authorities.

Lending Activities

     General.  The Bank emphasizes a range of lending services, including real
estate, commercial and consumer loans, to individuals and small- to medium-sized
businesses and professional concerns that are located in or conduct a
substantial portion of their business in the Bank's market area.

     Real Estate Loans.  One of the primary components of the Bank's loan
portfolio is loans secured by first or second mortgages on real estate.  These
loans generally consist of commercial real estate loans, construction and
development loans, and residential real estate loans (but exclude home equity
loans, which are classified as consumer loans).  Loan terms generally are
limited to five years or less, although payments may be structured on a longer
amortization basis.  Interest rates may be fixed or adjustable, and will more
likely be fixed in the case of shorter term loans.  The Bank will generally
charge an origination fee.  Management attempts to reduce credit risk in the
commercial

                                      -5-
<PAGE>

real estate portfolio by emphasizing loans on owner-occupied office and retail
buildings where the loan-to-value ratio, established by independent appraisals,
does not exceed 80%. In addition, the Bank will typically require personal
guarantees of the principal owners of the property backed with a review by the
Bank of the personal financial statements of the principal owners. The principal
economic risk associated with each category of anticipated loans, including real
estate loans, is the creditworthiness of the Bank's borrowers. The risks
associated with real estate loans vary with many economic factors, including
employment levels and fluctuations in the value of real estate. The Bank
competes for real estate loans with a number of bank competitors which are well
established in the Bartow County area. Most of these competitors have
substantially greater resources and lending limits than the Bank. As a result,
the Bank may have to charge lower interest rates to attract borrowers. See
"Competition" below. The Bank also originates loans for sale into the secondary
market. The Bank intends to limit interest rate risk and credit risk on these
loans by locking the interest rate for each loan with the secondary investor and
receiving the investor's underwriting approval prior to originating the loan.

     Commercial Loans.  The Bank makes loans for commercial purposes in various
lines of businesses.  Equipment loans are typically made for a term of five
years or less at fixed or variable rates, with the loan fully amortized over the
term and secured by the financed equipment and with a loan-to-value ratio of 80%
or less.  Working capital loans typically have terms not exceeding one year and
usually are secured by accounts receivable, inventory, or personal guarantees of
the principals of the business.  For loans secured by accounts receivable or
inventory, principal will typically be repaid as the assets securing the loan
are converted into cash, and in other cases principal will typically be due at
maturity.  The principal economic risk associated with each category of
anticipated loans, including commercial loans, is the creditworthiness of the
Bank's borrowers.  The risks associated with commercial loans vary with many
economic factors, including the economy in the Bartow County area.  The well-
established banks in the Bartow County area will make proportionately more loans
to medium- to large-sized businesses than the Bank.  Many of the Bank's
anticipated commercial loans will likely be made to small- to medium-sized
businesses which may be less able to withstand competitive, economic, and
financial conditions than larger borrowers. Commercial loans are generally
considered to have greater risk than first or second mortgages on real estate.

     Consumer Loans.  The Bank makes a variety of loans to individuals for
personal and household purposes, including secured and unsecured installment and
term loans, home equity loans and lines of credit, and revolving lines of credit
such as credit cards.  These loans typically carry balances of less than $25,000
and, in the case of non-revolving loans, are amortized over a period not
exceeding 60 months or are ninety-day term loans, in each case bearing interest
at a fixed rate. The revolving loans typically bear interest at a fixed rate and
require monthly payments of interest and a portion of the principal balance.
The underwriting criteria for home equity loans and lines of credit generally is
the same as applied by the Bank when making a first mortgage loan, as described
above, and home equity lines of credit typically expire ten years or less after
origination.  As with the other categories of loans, the principal economic risk
associated with consumer loans is the creditworthiness of the Bank's borrowers,
and the principal competitors for consumer loans are the

                                      -6-
<PAGE>

established banks in the Bartow County area. Consumer loans are generally
considered to have greater risk than first or second mortgages on real estate.

     Loan Approval and Review.  The Bank's loan approval policies provide for
various levels of officer lending authority.  When the amount of aggregate loans
to a single borrower exceeds that individual officer's lending authority, the
loan request is considered and approved by an officer with a higher lending
limit or the officers' loan committee.  The officers' loan committee has lending
limits, and any loan in excess of this lending limit is approved by the
directors' loan committee.  The Bank will not make any loans to any director,
officer, or employee of the Bank unless the loan is approved by the board of
directors of the Bank and is made on terms not more favorable to such person
than would be available to a person not affiliated with the Bank.  The Bank
currently intends to adhere to Federal National Mortgage Association ("FNMA")
and Federal Home Loan Mortgage Corporation ("FHLMC") guidelines in its mortgage
loan review process, but may choose to alter this policy in the future.  The
Bank does not currently sell its mortgage loans on the secondary market, but may
choose to do so in the future.

     Lending Limits.  The Bank's lending activities are subject to a variety of
lending limits imposed by federal law.  While differing limits apply in certain
circumstances based on the type of loan or the nature of the borrower (including
the borrower's relationship to the Bank), in general the Bank is subject to a
loan-to-one-borrower limit.  These limits will increase or decrease as the
Bank's capital increases or decreases.  Unless the Bank is able to sell
participations in its loans to other financial institutions, the Bank will not
be able to meet all of the lending needs of loan customers requiring aggregate
extensions of credit above these limits.

Other Banking Services

     Other bank services include cash management services, safe deposit boxes,
travelers checks, direct deposit of payroll and social security checks, and
automatic drafts for various accounts.  The Bank is associated with a shared
network of automated teller machines that may be used by Bank customers
throughout Georgia and other regions.  The Bank also offers MasterCard and VISA
credit card services through a correspondent bank as an agent for the Bank.  The
Bank does not plan to exercise trust powers during its initial years of
operation.

Competition

     The banking business is highly competitive.  The Bank competes as a
financial intermediary with other commercial banks, savings and loan
associations, credit unions and money market mutual funds operating in Bartow
County and elsewhere.  There are currently nine commercial banks operating in
Bartow County, holding approximately $500 million in deposits.  There are also
four credit unions in the county.  A number of these competitors are well
established in the Bartow County area.  Most of them have substantially greater
resources and lending limits and may have a lower cost of funds than the Bank.
These banks offer certain services, such as extensive and established branch
networks and trust services, that the Bank either does not expect to provide or
does not currently

                                      -7-
<PAGE>

provide. As a result of these competitive factors, the Bank may have to pay
higher rates of interest in order to attract deposits.

Employees

     As of December 31, 2000, the Bank had thirty full-time employees and zero
part-time employees.

                           SUPERVISION AND REGULATION

     The Company and the Bank are subject to state and federal banking laws and
regulations which impose specific requirements or restrictions on, and provide
for general regulatory oversight with respect to, virtually all aspects of
operations.  These laws and regulations are generally intended to protect
depositors, not shareholders.  To the extent that the following summary
describes statutory or regulatory provisions, it is qualified in its entirety by
reference to the particular statutory and regulatory provisions.  Any change in
applicable laws or regulations may have a material effect on the business and
prospects of the Company.  Beginning with the enactment of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA") and
following with the Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), numerous additional regulatory requirements have been placed on the
banking industry in the past five years, and additional changes have been
proposed.  The banking industry is also likely to change significantly as a
result of the passage of the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 (the "Interstate Banking Act").  The operations of the
Company and the Bank may be affected by legislative changes and the policies of
various regulatory authorities.  The Company is unable to predict the nature or
the extent of the effect on its business and earnings that fiscal or monetary
policies, economic control or new federal or state legislation may have in the
future.

The Company

     Because it owns the outstanding common stock of the Bank, the Company is a
bank holding company within the meaning of the federal Bank Holding Company Act
of 1956 (the "BHCA"). Under the BHCA, the Company is subject to periodic
examination by the Federal Reserve and is required to file periodic reports of
its operations and such additional information as the Federal Reserve may
require.  The Company's and the Bank's activities are limited to banking,
managing or controlling banks, furnishing services to or performing services for
its subsidiaries or engaging in any other activity that the Federal Reserve
determines to be so closely related to banking or managing or controlling banks
as to be a proper incident thereto.

     Investments, Control and Activities.  With certain limited exceptions, the
BHCA requires every bank holding company to obtain the prior approval of the
Federal Reserve before (i) acquiring substantially all the assets of any bank,
(ii) acquiring direct or indirect ownership or control of any voting shares of
any bank if after such acquisition it would own or control more than 5% of the

                                      -8-
<PAGE>

voting shares of such bank (unless it already owns or controls the majority of
such shares), or (iii) merging or consolidating with another bank holding
company.

     In addition, and subject to certain exceptions, the BHCA and the Change in
Bank Control Act, together with regulations thereunder, require Federal Reserve
approval (or, depending on the circumstances, no notice of disapproval) prior to
any person or company acquiring "control" of a bank holding company, such as the
Company.  Control is conclusively presumed to exist if an individual or company
acquires 25% or more of any class of voting securities of the bank holding
company.  Control is rebuttably presumed to exist if a person acquires 10% or
more but less than 25% of any class of voting securities and either the Company
has registered securities under Section 12 of the Exchange Act or no other
person will own a greater percentage of that class of voting securities
immediately after the transaction.  The regulations provide a procedure for
challenge of the rebuttable control presumption.

     Under the BHCA, the Company is generally prohibited from engaging in, or
acquiring direct or indirect control of more than 5% of the voting shares of any
company engaged in, nonbanking activities, unless the Federal Reserve, by order
or regulation, has found those activities to be so closely related to banking or
managing or controlling banks as to be a proper incident thereto.  Some of the
activities that the Federal Reserve has determined by regulation to be proper
incidents to the business of banking include making or servicing loans and
certain types of leases, engaging in certain insurance and discount brokerage
activities, performing certain data processing services, acting in certain
circumstances as a fiduciary or investment or financial advisor, owning savings
associations and making investments in certain corporations or projects designed
primarily to promote community welfare.

     Source of Strength; Cross-Guarantee.  In accordance with Federal Reserve
policy, the Company is expected to act as a source of financial strength to the
Bank and to commit resources to support the Bank in circumstances in which the
Company might not otherwise do so.  Under the BHCA, the Federal Reserve may
require a bank holding company to terminate any activity or relinquish control
of a nonbank subsidiary (other than a nonbank subsidiary of a bank) upon the
Federal Reserve's determination that such activity or control constitutes a
serious risk to the financial soundness or stability of any subsidiary
depository institution of the bank holding company.  Further, federal bank
regulatory authorities have additional discretion to require a bank holding
company to divest itself of any bank or nonbank subsidiary if the agency
determines that divestiture may aid the depository institution's financial
condition.  The Bank may be required to indemnify, or cross-guarantee, the FDIC
against losses it incurs with respect to any other bank controlled by the
Company, which in effect makes the Company's equity investments in healthy bank
subsidiaries available to the FDIC to assist any failing or failed bank
subsidiary of the Company.

The Bank

     General.  The Bank operates as a national banking association incorporated
under the laws of the United States and is subject to examination by the Office
of the Comptroller of the Currency

                                      -9-
<PAGE>

(the "OCC"). Deposits in the Bank are insured by the Federal Deposit Insurance
Corporation (the "FDIC") up to a maximum amount (generally $100,000 per
depositor, subject to aggregation rules). The OCC and the FDIC regulate or
monitor all areas of the Bank's operations, including security devices and
procedures, adequacy of capitalization and loss reserves, loans, investments,
borrowings, deposits, mergers, issuances of securities, payment of dividends,
interest rates payable on deposits, interest rates or fees chargeable on loans,
establishment of branches, corporate reorganizations, maintenance of books and
records and adequacy of staff training to carry on safe lending and deposit
gathering practices. The OCC requires the Bank to maintain certain capital
ratios and imposes limitations on the Bank's aggregate investment in real
estate, bank premises and furniture and fixtures. The Bank is currently required
by the OCC to prepare quarterly reports on the Bank's financial condition and to
conduct an annual audit of its financial affairs in compliance with minimum
standards and procedures prescribed by the OCC.

     Under FDICIA, all insured institutions must undergo periodic on-site
examination by their appropriate banking agency.  The cost of examinations of
insured depository institutions and any affiliates may be assessed by the
appropriate agency against each institution or affiliate as it deems necessary
or appropriate.  Insured institutions are required to submit annual reports to
the FDIC and the appropriate agency (and state supervisor when applicable).
FDICIA also directs the FDIC to develop with other appropriate agencies a method
for insured depository institutions to provide supplemental disclosure of the
estimated fair market value of assets and liabilities, to the extent feasible
and practicable, in any balance sheet, financial statement, report of condition
or other report of any insured depository institution.  FDICIA also requires the
federal banking regulatory agencies to prescribe, by regulation, standards for
all insured depository institutions and depository institution holding companies
relating, among other things, to: (i) internal controls, information systems and
audit systems; (ii) loan documentation; (iii) credit underwriting; (iv) interest
rate risk exposure; and (v) asset quality.

     Transactions With Affiliates and Insiders.  The Bank is subject to Section
23A of the Federal Reserve Act, which places limits on the amount of loans or
extensions of credit to, or investments in, or certain other transactions with,
affiliates and on the amount of advances to third parties collateralized by the
securities or obligations of affiliates.  In addition, most of these loans and
certain other transactions must be secured in prescribed amounts.  The Bank is
also subject to Section 23B of the Federal Reserve Act which, among other
things, prohibits an institution from engaging in certain transactions with
certain affiliates unless the transactions are on terms substantially the same,
or at least as favorable to such institution or its subsidiaries, as those
prevailing at the time for comparable transactions with non-affiliated
companies.  The Bank is subject to certain restrictions on extensions of credit
to executive officers, directors, certain principal shareholders and their
related interests.  Such extensions of credit (i) must be made on substantially
the same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with third parties and (ii) must not
involve more than the normal risk of repayment or present other unfavorable
features.


                                      -10-
<PAGE>

     Community Reinvestment Act.  The Community Reinvestment Act requires that
each insured depository institution shall be evaluated by its primary federal
regulator with respect to its record in meeting the credit needs of its local
community, including low and moderate income neighborhoods, consistent with the
safe and sound operation of those institutions.  These factors are also
considered in evaluating mergers, acquisitions and applications to open a branch
or facility.

The Gramm-Leach-Bliley Act of 1999

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

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

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

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

                                      -11-
<PAGE>

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

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

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

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

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

     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.

     Other Regulations.  Interest and certain other charges collected or
contracted for by the Bank are subject to state usury laws and certain federal
laws concerning interest rates.  The Bank's loan operations are also subject to
certain federal laws applicable to credit transactions, such as the federal

                                      -12-
<PAGE>

Truth-In-Lending Act governing disclosures of credit terms to consumer
borrowers, the Home Mortgage Disclosure Act of 1975 requiring financial
institutions to provide information to enable the public and public officials to
determine whether a financial institution is fulfilling its obligation to help
meet the housing needs of the community it serves, the Equal Credit Opportunity
Act prohibiting discrimination on the basis of race, creed or other prohibited
factors in extending credit, the Fair Credit Reporting Act of 1978 governing the
use and provision of information to credit reporting agencies, the Fair Debt
Collection Act governing the manner in which consumer debts may be collected by
collection agencies, and the rules and regulations of the various federal
agencies charged with the responsibility of implementing such federal laws.  The
deposit operations of the Bank also are subject to the Right to Financial
Privacy Act, which imposes a duty to maintain confidentiality of consumer
financial records and prescribes procedures for complying with administrative
subpoenas of financial records, and the Electronic Funds Transfer Act and
Regulation E issued by the Federal Reserve Board to implement that act, which
governs automatic deposits to and withdrawals from deposit accounts and
customers' rights and liabilities arising from the use of automated teller
machines and other electronic banking services.

Deposit Insurance

     The deposits of the Bank are currently insured to a maximum of $100,000 per
depositor, subject to certain aggregation rules.  The FDIC establishes rates for
the payment of premiums by federally insured banks and thrifts for deposit
insurance.  Separate insurance funds (BIF and SAIF) are maintained for
commercial banks and thrifts, with insurance premiums from the industry used to
offset losses from insurance payouts when banks and thrifts fail.  Due to the
high rate of failures in the late 1980's and early 1990's, the fees that
commercial banks and thrifts pay to BIF and SAIF increased.  Since 1993, insured
depository institutions like the Bank have paid for deposit insurance under a
risk-based premium system.  Under this system, until mid-1995 depository
institutions paid to BIF or SAIF from $0.23 to $0.31 per $100 of insured
deposits depending on its capital levels and risk profile, as determined by its
primary federal regulator on a semi-annual basis.  Once the BIF reached its
legally mandated reserve ratio in mid-1995, the FDIC lowered premiums for well
capitalized banks to $0.04 per $100.  Subsequently, the FDIC revised the range
of premiums from $.00 to $0.31 per $100, subject to a statutory minimum
assessment of $2,000 per year.  However, the Deposit Insurance Funds Act of 1996
eliminated the minimum assessment required by statute. It also separated,
effective January 1, 1997, the Financial Corporation (FICO) assessment to
service the interest on its bond obligations.  The amount assessed on individual
institutions, including the Bank, by FICO will be in addition to the amount paid
for deposit insurance according to the risk-related assessment rate schedule.
Initially, FICO semiannual assessment rates were set at 1.30 basis points
annually for BIF deposits.  Increases in deposit insurance premiums or changes
in risk classification will increase the Bank's cost of funds, and there can be
no assurance that such cost can be passed on the Bank's customers.

                                      -13-
<PAGE>

Dividends

     The principal source of the Company's cash revenues comes from dividends
and interest income on its investments.  In addition, the Company may receive
cash revenues from dividends paid by the Bank.  The amount of dividends that may
be paid by the Bank to the Company depends on the Bank's earnings and capital
position and is limited by federal and state law, regulations and policies. In
addition, the Board of Governors has stated that bank holding companies should
refrain from or limit dividend increases or reduce or eliminate dividends under
circumstances in which the bank holding company fails to meet minimum capital
requirements or in which its earnings are impaired.

     As a national bank, the Bank may not pay dividends from its paid-in-
capital.  All dividends must be paid out of undivided profits then on hand,
after deducting expenses, including reserves for losses and bad debts.  In
addition, a national bank is prohibited from declaring a dividend on its shares
of common stock until its surplus equals its stated capital, unless there has
been transferred to surplus no less than one-tenth of the bank's net profits of
the preceding two consecutive half-year periods (in the case of an annual
dividend).  The approval of the OCC is required if the total of all dividends
declared by a national bank in any calendar year exceeds the total of its net
profits for that year combined with its retained net profits for the preceding
two years, less any required transfers to surplus.  Under FDICIA, the Bank may
not pay a dividend if, after paying the dividend, the Bank would be
undercapitalized.  See "Capital Regulations" below.

     In addition to the availability of funds from the Bank, the future dividend
policy of the Company is subject to the discretion of the Board of Directors and
will depend upon a number of factors, including future earnings, financial
condition, cash needs and general business conditions. If dividends should be
declared in the future, the amount of such dividends presently cannot be
estimated and it cannot be known whether such dividends would continue for
future periods.

Capital Regulations

     The federal bank regulatory authorities have adopted risk-based capital
guidelines for banks and bank holding companies that are designed to make
regulatory capital requirements more sensitive to differences in risk profile
among banks and bank holding companies, account for off-balance sheet exposure
and minimize disincentives for holding liquid assets.  The resulting capital
ratios represent qualifying capital as a percentage of total risk-weighted
assets and off-balance sheet items.  The guidelines are minimums, and the
federal regulators have noted that banks and bank holding companies
contemplating significant expansion programs should not allow expansion to
diminish their capital ratios and should maintain ratios well in excess of the
minimums.  The current guidelines require all bank holding companies and
federally-regulated banks to maintain a minimum risk-based total capital ratio
equal to 8%, of which at least 4% must be Tier 1 capital.  Tier 1 capital
includes common shareholders' equity, qualifying perpetual preferred stock and
minority interests in equity accounts of consolidated subsidiaries, but excludes
goodwill and most other intangibles and excludes the allowance for loan and
lease losses.  Tier 2 capital includes the excess of any preferred stock not
included in Tier 1 capital, mandatory convertible securities, hybrid capital
instruments, subordinated

                                      -14-
<PAGE>

debt and intermediate term-preferred stock and general reserves for loan and
lease losses up to 1.25% of risk-weighted assets.

     Under the guidelines, banks' and bank holding companies' assets are given
risk-weights of 0%, 20%, 50% and 100%.  In addition, certain off-balance sheet
items are given credit conversion factors to convert them to asset equivalent
amounts to which an appropriate risk-weight will apply. These computations
result in the total risk-weighted assets.  Most loans are assigned to the 100%
risk category, except for first mortgage loans fully secured by residential
property and, under certain circumstances, residential construction loans, both
of which carry a 50% rating.  Most investment securities are assigned to the 20%
category, except for municipal or state revenue bonds, which have a 50% rating,
and direct obligations of or obligations guaranteed by the United States
Treasury or United States Government agencies, which have a 0% rating.

     The federal bank regulatory authorities have also implemented a leverage
ratio, which is Tier 1 capital as a percentage of average total assets less
intangibles, to be used as a supplement to the risk-based guidelines.  The
principal objective of the leverage ratio is to place a constraint on the
maximum degree to which a bank holding company may leverage its equity capital
base.  The minimum required leverage ratio for top-rated institutions is 3%, but
most institutions are required to maintain an additional cushion of at least 100
to 200 basis points.

     FDICIA established a new capital-based regulatory scheme designed to
promote early intervention for troubled banks and requires the FDIC to choose
the least expensive resolution of bank failures.  The new capital-based
regulatory framework contains five categories of compliance with regulatory
capital requirements, including "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized," and "critically
undercapitalized." To qualify as a "well capitalized" institution, a bank must
have a leverage ratio of no less than 5%, a Tier 1 risk-based ratio of no less
than 6%, and a total risk-based capital ratio of no less than 10%, and the bank
must not be under any order or directive from the appropriate regulatory agency
to meet and maintain a specific capital level.  The Company and the Bank are
both currently qualified as "well capitalized." As of December 31, 2000, the
Company had Tier 1 and Total Risk-Based Capital Ratios of 13.09% and 14.34%,
respectively.  For a more detailed analysis of the Company and Bank's regulatory
requirements, see Note 11 to the Notes to Consolidated Financial Statements.

     Under the FDICIA regulations, the applicable agency can treat an
institution as if it were in the next lower category if the agency determines
(after notice and an opportunity for hearing) that the institution is in an
unsafe or unsound condition or is engaging in an unsafe or unsound practice. The
degree of regulatory scrutiny of a financial institution will increase, and the
permissible activities of the institution will decrease, as it moves downward
through the capital categories.  Institutions that fall into one of the three
undercapitalized categories may be required to (i) submit a capital restoration
plan; (ii) raise additional capital; (iii) restrict their growth, deposit
interest rates and other activities; (iv) improve their management; (v)
eliminate management fees; or (vi) divest themselves of all or part of their
operations.  Bank holding companies controlling financial institutions can be
called upon to

                                      -15-
<PAGE>

boost the institutions' capital and to partially guarantee the institutions'
performance under their capital restoration plans.

     These capital guidelines can affect the Company in several ways.  If the
Bank begins to grow at a rapid pace, a premature "squeeze" on capital could
occur making a capital infusion necessary. The requirements could impact the
Company's ability to pay dividends.  The Company's capital levels are currently
more than adequate; however, rapid growth, poor loan portfolio performance or
poor earnings performance or a combination of these factors could change the
Bank's capital position in a relatively short period of time.

Interstate Banking And Branching Restrictions

     On September 29, 1994, the federal government enacted the Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994 (the "Interstate Banking
Act").  This Act became effective on September 29, 1995, and permits eligible
bank holding companies in any state, with regulatory approval, to acquire
banking organizations in any other state.  Effective June 1, 1997, the
Interstate Banking Act allows banks with different home states to merge, unless
a particular state opts out of the statute.  Consistent with the Interstate
Banking Act, Georgia adopted legislation in 1996 which has permitted interstate
bank mergers since June 1, 1997.

     In addition, beginning June 1, 1997, the Interstate Banking Act has
permitted national and state banks to establish de novo branches in another
state if there is a law in that state which applies equally to all banks and
expressly permits all out-of-state banks to establish de novo branches. However,
in 1996, Georgia adopted legislation which opts out of this provision.  The
Georgia legislation provides that, with the prior approval of the Department of
Banking and Finance, after July 1, 1996, a bank may establish three new or
additional de novo branch banks anywhere in Georgia and, beginning July 1, 1998,
a bank may establish new or additional branch banks anywhere in the state with
prior regulatory approval.

Recent Legislative Developments

     From time to time, various bills are introduced in the United States
Congress and at the state legislative level with respect to the regulation of
financial institutions.  Certain of these proposals, if adopted, could
significantly change the regulation of banks and the financial services
industry.  The Company cannot predict whether any of these proposals will be
adopted or, if adopted, how these proposals would affect the Company.

Item 2.  Description of Property.
--------------------------------

     Cartersville Office.  The Bank's main office is located in Cartersville at
950 Joe Frank Harris Parkway, at the corner of Joe Frank Harris Parkway and
Market Place Boulevard.  This permanent facility has 10,500 square feet in a two
story brick facility.  This facility has a drive through station consisting of
four teller lanes and one with a drive up automated teller service machine.

                                      -16-
<PAGE>

     Adairsville Office.  On January 4, 1999, the Bank also opened a temporary
branch office in Adairsville at 7450 Adairsville Highway, NW (Highway 140),
Adairsville, Georgia 30103. Construction of a permanent facility for this office
began in the third quarter of 1999 and it opened in the second quarter of 2000.
This branch has approximately 3,500 square feet, three drive through lanes plus
one drive through with an automated teller service machine.

     The Company believes that the facilities will adequately serve the Bank's
needs its first several years of operation.

Item 3.  Legal Proceedings.
--------------------------

     Neither the Company nor the Bank is a party to, nor is any of their
property the subject of, any material pending legal proceedings incidental to
the business of the Company or the Bank.

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 the fiscal year covered by this report.

Item 5.  Market For Common Equity And Related Stockholder Matters.
-----------------------------------------------------------------

     (a) The Company completed its initial public offering on October 22, 1998.
In the offering, the Company sold a total of 838,711 shares at $10.00 per share.
There has been virtually no market for the Company's common stock since
completion of the offering, and the Company does not anticipate a market to
develop in the near future.  As of December 31, 2000, there were approximately
1,159 shareholders of record.

          All outstanding shares of Common Stock of the Company are entitled to
share equally in dividends from funds legally available therefor, when, as and
if declared by the Board of Directors. The Company does not plan to declare any
dividends in the immediate future.

     (b) The following table reflects the high and low trades of shares of the
Company for each quarterly period during the last year based on such limited
available information.

          Year                     High Selling Price  Low Selling Price
          ----                     ------------------  -----------------

          2000
          First Quarter                  12.00              11.00
          Second Quarter                 12.00              11.00
          Third Quarter                  12.00              11.00
          Fourth Quarter                 13.00              12.00

                                      -17-
<PAGE>

          The Company has not paid dividends since its inception.  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
the Company is dividends from the Bank, the Company may continue not to pay
dividends in the near future.

                                      -18-
<PAGE>

Item 6. Management's Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
of Operation.
------------


       The following is a discussion of the financial condition of our financial
condition and the financial condition our bank subsidiary, Unity National Bank,
at December 31, 2000 and 1999 and the results of operations for the years then
ended. The purpose of this discussion is to focus on information about our
financial condition and results of operations that are not otherwise apparent
from our audited consolidated financial statements. Reference should be made to
those statements and the selected financial data presented elsewhere in this
report for an understanding of the following discussion and analysis.

Forward-Looking Statements

       We may from time to time make written or oral forward-looking statements,
including statements contained in filings with the Securities and Exchange
Commission and our reports to stockholders.  Statements made in the Annual
Report, other than those concerning historical information, should be considered
forward-looking and subject to various risks and uncertainties.  Such forward-
looking statements are made based upon management's belief as well as
assumptions made by, and information currently available to, management pursuant
to "safe harbor" provisions of the Private Securities Litigation Reform Act of
1995.  Our actual results may differ materially from the results anticipated in
forward-looking statements due to a variety of factors, including governmental
monetary and fiscal policies, deposit levels, loan demand, loan collateral
values, securities portfolio values, interest rate risk management, the effects
of competition in the banking business from other commercial banks, thrifts,
mortgage banking firms, consumer finance companies, credit unions, securities
brokerage firms, insurance companies, money market funds and other financial
institutions operating in our market area and elsewhere, including institutions
operating through the Internet, changes in governmental regulation relating to
the banking industry, including regulations relating to branching and
acquisitions, failure of assumptions underlying the establishment of reserves
for loan losses, including the value of collateral underlying delinquent loans
and other factors.  We caution that such factors are not exclusive.  We do not
undertake to update any forward-looking statement that may be made from time to
time by us, or on our behalf.

Overview

       Our 2000 results were highlighted by continued loan and deposit growth in
our second full year of operations and the occupancy of our new main office and
branch banking facilities. Our growth propelled us to our first year of
profitable operations and to a substantial recovery of deficits accumulated
through 1999.

                                      -19-
<PAGE>

Financial Condition at December 31, 2000 and 1999

The following is a summary of our balance sheets for the years indicated:

                                         December 31,
                                        2000     1999
                                   (Dollars in Thousands)

Cash and due from banks               $ 2,104  $ 3,126
Interest-bearing deposits in banks        114      102
Federal funds sold                      4,690    4,440
Securities                              8,412    6,413
Loans, net                             56,683   34,058
Premises and equipment                  5,047    3,254
Other assets                            1,327      673
                                      -------  -------

                                      $78,377  $52,066
                                      =======  =======

Total deposits                        $69,895  $44,312
Other liabilities                         669      516
Stockholders' equity                    7,813    7,238
                                      -------  -------

                                      $78,377  $52,066
                                      =======  =======

Financial Condition at December 31, 2000 and 1999

     As of December 31, 2000, we had total assets of $78.4 million, an increase
of 51% over December 31, 1999. Total interest-earning assets were $70.8 million
at December 31, 2000 or 90% of total assets as compared to 87% of total assets
at December 31, 1999. Our primary interest-earning assets at December 31, 2000
were loans, which made up 81% of total interest-earning assets as compared to
76% at December 31, 1999. Our loan to deposit ratio was 82% at December 31, 2000
as compared to 78% at December 31, 1999. Deposit growth of $25.6 million has
been used primarily to fund loan growth of $23.0 million.

     Our securities portfolio, consisting of U.S. Agency and restricted equity
securities, amounted to $8.4 million at December 31, 2000.  Unrealized gains on
securities amounted to $71,000 at December 31, 2000 as compared to $17,000 in
unrealized losses at December 31, 1999.  We have not specifically identified any
securities for sale in future periods that, if so designated, would require a
charge to operations if the market value would not be reasonably expected to
recover prior to the time of sale.

     We have 74% of our loan portfolio collateralized by real estate located in
our primary market area of Bartow County, Georgia and surrounding counties. Our
real estate mortgage portfolio consists of loans collateralized by one- to four-
family residential properties (34%) and construction loans to build one- to
four-family residential properties (20%), and nonresidential properties
consisting primarily of small business commercial properties (46%). We generally

                                      -20-
<PAGE>

require that loans collateralized by real estate not exceed the collateral
values by the following percentages for each type of real estate loan as
follows.

     One- to four-family residential properties                         85%
     Construction loans on one- to four-family residential properties   80%
     Nonresidential property                                            80%

     The remaining 26% of the loan portfolio consists of commercial, consumer,
and other loans. We require collateral commensurate with the repayment ability
and creditworthiness of the borrower.

     The specific economic and credit risks associated with our loan portfolio,
especially the real estate portfolio, include, but are not limited to, a general
downturn in the economy which could affect unemployment rates in our market
area, general real estate market deterioration, interest rate fluctuations,
deteriorated or non-existing collateral, title defects, inaccurate appraisals,
financial deterioration of borrowers, fraud, and any violation of banking
protection laws.  Construction lending can also present other specific risks to
the lender such as whether developers can find builders to buy lots for home
construction, whether the builders can obtain financing for the construction,
whether the builders can sell the home to a buyer, and whether the buyer can
obtain permanent financing.  Currently, real estate values and employment trends
in our market area is stable with no indications of a significant downturn in
the local economy.

     We attempt to reduce these economic and credit risks not only by adhering
to loan to value guidelines, but also by investigating the creditworthiness of
the borrower and monitoring the borrower's financial position. Also, we
establish and periodically review our lending policies and procedures. Banking
regulations limit exposure by prohibiting loan relationships that exceed 15% of
the Bank's statutory capital.

Liquidity and Capital Resources

     The purpose of liquidity management is to ensure that there are sufficient
cash flows to satisfy demands for credit, deposit withdrawals, and other needs.
Traditional sources of liquidity include asset maturities and growth in core
deposits. A company may achieve its desired liquidity objectives from the
management of assets and liabilities and through funds provided by operations.
Funds invested in short-term marketable instruments and the continuous maturing
of other earning assets are sources of liquidity from the asset perspective. The
liability base provides sources of liquidity through deposit growth, the
maturity structure of liabilities, and accessibility to market sources of funds.

     Scheduled loan payments are a relatively stable source of funds, but loan
payoffs and deposit flows fluctuate significantly, being influenced by interest
rates and general economic conditions and competition.   We attempt to price our
deposits to meet our asset/liability objectives consistent with local market
conditions.

                                      -21-
<PAGE>

     Our liquidity and capital resources are monitored on a periodic basis by
management and Federal regulatory authorities.  As determined under guidelines
established by those regulatory authorities and internal policy, our liquidity
was considered satisfactory.

     At December 31, 2000, we had loan commitments outstanding of $6.0 million.
Because these commitments generally have fixed expiration dates and many will
expire without being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements.  If needed, we have the ability on a short-
term basis to borrow and purchase Federal funds from other financial
institutions.  At December 31, 2000, we had arrangements with two commercial
banks for short-term advances of $3.5 million.

     At December 31, 2000, our capital ratios were considered adequate based on
regulatory minimum capital requirements.  Our stockholders' equity increased due
to net income of $487,000 and other comprehensive income associated with our
securities available-for-sale of $88,000.  For regulatory purposes, the net
unrealized gains on securities available-for-sale are excluded in the
computation of the capital ratios.

     In the future, our primary source of funds available to Unity Holdings,
Inc. will be the payment of dividends by the Bank. Banking regulations limit the
amount of the dividends that may be paid without prior approval of the bank's
regulatory agency. Currently, the Bank can pay no dividends without regulatory
approval.

     The minimum capital requirements to be considered well capitalized under
prompt corrective action provisions and the actual capital ratios for us and the
Bank as of December 31, 2000 are as follows:


                                                         Actual
                                          -----------------------------------
                                                                  Regulatory
                                           Consolidated   Bank   Requirements
                                          -------------  ------  ------------

  Leverage capital ratio                      10.21%      10.19%     5.00%
  Risk-based capital ratios:
    Core capital                              13.09       13.05      6.00
    Total capital                             14.34       14.31     10.00

     These ratios may decline as asset growth continues, but are expected to
exceed the regulatory minimum requirements. Anticipated future earnings will
assist in keeping these ratios at satisfactory levels.

     At December 31, 2000, we had no material commitments for capital
expenditures.

     We believe that our liquidity and capital resources are adequate and will
meet our foreseeable short and long-term needs. We anticipate that we will have
sufficient funds available to meet current loan commitments and to fund or
refinance, on a timely basis, our other material commitments and liabilities.

                                      -22-
<PAGE>

     Management is not aware of any known trends, events or uncertainties, other
than those discussed above, that will have or that are reasonably likely to have
a material effect on our liquidity, capital resources or operations. Management
is also not aware of any current recommendations by the regulatory authorities
that, if they were implemented, would have such an effect.

Effects of Inflation
--------------------

     The impact of inflation on banks differs from its impact on non-financial
institutions.  Banks, as financial intermediaries, have assets which are
primarily monetary in nature and that tend to fluctuate in concert with
inflation.  A bank can reduce the impact of inflation if it can manage its rate
sensitivity gap.  This gap represents the difference between rate sensitive
assets and rate sensitive liabilities.  We, through our asset-liability
committee, attempt to structure the assets and liabilities and manage the rate
sensitivity gap, thereby seeking to minimize the potential effects of inflation.
For information on the management of our interest rate sensitive assets and
liabilities, see the "Asset/Liability Management" section.

Results of Operations For The Years Ended December 31, 2000 and December 31,
1999

     The following is a summary of our operations for the years indicated.

                              Years Ended December 31,
                                 2000         1999
                               (Dollars in Thousands)

Interest income                 $5,982       $2,768

Interest expense                 2,983          950
                                ------       ------

Net interest income              2,999        1,818

Provision for loan losses          361          484

Other income                       422          280

Other expenses                   2,573        1,848
                                ------       ------

Pretax income (loss)               487         (234)

Income taxes                         -            -
                                ------       ------

Net income (loss)               $  487       $ (234)
                                ======       ======

                                      -23-
<PAGE>

Net Interest Income
-------------------

     Our results of operations are determined by our ability to manage interest
income and expense effectively, to minimize loan and investment losses, to
generate non-interest income, and to control operating expenses.  Because
interest rates are determined by market forces and economic conditions beyond
our control, our ability to generate net interest income depends on our ability
to obtain an adequate net interest spread between the rate we pay on interest-
bearing liabilities and the rate we earn on interest-earning assets.

     Our net yield on average interest-earning assets was 5.13% in 2000 as
compared to 6.42% in 1999. Average loans increased by $24.0 million, which
accounted for the majority of a $30.1 million increase in total average
interest-earning assets. Average interest-bearing liabilities increased by $31.1
million with average interest-bearing demand and time deposits accounting for
the vast majority of this increase. The rate earned on average interest-earning
assets increased to 10.23% in 2000 from 9.77% in 1999. The rate paid on average
interest-bearing liabilities increased to 5.78% in 2000 from 4.63% in 1999.

Provision for Loan Losses
-------------------------

     The provision for loan losses was $361,000 and $484,000 in 2000 and 1999,
respectively. The amounts provided were due primarily to the growth of the
portfolio and to our assessment of the inherent risk in the portfolio.  Net
charge-offs for 2000 and 1999 were insignificant.  Based upon our evaluation of
the loan portfolio, we believe the allowance for loan losses to be adequate to
absorb possible losses on existing loans that may become uncollectible.  This
evaluation considers past due and classified loans, historical experience,
underlying collateral values, and current economic conditions that may affect
the borrower's ability to repay.  As of December 31, 2000, we had nonperforming
loans of $35,000 as compared to $11,000 as of December 31, 1999.  The allowance
for loan losses as a percentage of total loans was 1.50% at December 31, 2000
and 1999.

Other Income
------------

     Other income consists of service charges on deposit accounts, mortgage loan
origination fees, and other miscellaneous revenues and fees.  Other income was
$422,000 in 2000 as compared to $280,000 in 1999.  The increase is due primarily
to increased service charges on deposit accounts of $102,000 and increased
mortgage loan origination fees of $33,000.

Other Expenses
--------------

     Other expenses for 2000 consist of salaries and employee benefits
($1,335,000), equipment and occupancy expenses ($401,000), and other operating
expenses ($837,000). The increase in salaries and employee benefits of $316,000
is due to an increase in the number of employees from 22 at December 31, 1999 to
30 at December 31, 2000, and to other annual salary increases. The increase in
equipment and occupancy expenses of $148,000 is due to increased costs
associated with the occupation of a new main office and branch facilities. The
increase in other operating expenses of $261,000 is due to increased data
processing expense of $35,000, increased office supplies expense of $29,000,
increased telephone expense of $19,000, increased advertising and business
promotion expense of $47,000 and

                                      -24-
<PAGE>

increased other costs of $131,000. The increase in other operating expenses is
directly related to the overall growth of the Bank.

Income Tax
----------

     We have had no income tax expense due to accumulated deficits incurred of
$343,000 through December 31, 2000.

Asset/Liability Management
--------------------------

     Our objective is 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
officers are charged with the responsibility for monitoring policies and
procedures designed to ensure acceptable composition of the asset/liability mix.
Management's overall philosophy is to support asset growth primarily through
growth of core deposits of all categories made by local individuals,
partnerships, and corporations.

     Our asset/liability mix is monitored on a regular basis with a report
reflecting the interest rate-sensitive assets and interest rate-sensitive
liabilities being prepared and presented to the Bank's Board of Directors on a
monthly basis. The objective of this policy is to monitor interest rate-
sensitive assets and liabilities so as to minimize the impact of substantial
movements in interest rates on earnings. An asset or liability is considered to
be interest rate-sensitive if it will reprice or mature within the time period
analyzed, usually one year or less. The interest rate-sensitivity gap is the
difference between the interest-earning assets and interest-bearing liabilities
scheduled to mature or reprice within such time period. A gap is considered
positive when the amount of interest rate-sensitive assets exceeds the amount of
interest rate-sensitive liabilities. A gap is considered negative when the
amount of interest rate-sensitive liabilities exceeds the interest rate-
sensitive assets. During a period of rising interest rates, a negative gap would
tend to affect net interest income adversely, while a positive gap would tend to
result in an increase in net interest income. Conversely, during a period of
falling interest rates, a negative gap would tend to result in an increase in
net interest income, while a positive gap would tend to affect net interest
income adversely. If our assets and liabilities were equally flexible and moved
concurrently, the impact of any increase or decrease in interest rates on net
interest income would be minimal.

     A simple interest rate "gap" analysis by itself may not be an accurate
indicator of how net interest income will be affected by changes in interest
rates. Accordingly, we also evaluate how the repayment of particular assets and
liabilities is impacted by changes in interest rates. Income associated with
interest-earning assets and costs associated with interest-bearing liabilities
may not be affected uniformly by changes in interest rates. In addition, the
magnitude and duration of changes in interest rates may have a significant
impact on net interest income. For example, although certain assets and
liabilities may have similar maturities or periods of repricing, they may react
in different degrees to changes in market interest rates. Interest rates on
certain types of assets and liabilities fluctuate in advance of changes in
general market rates, while interest rates on other types may lag behind changes
in general market rates. In addition, certain assets, such as adjustable rate
mortgage loans, have features (generally referred to as "interest rate caps and
floors") that limit changes in

                                      -25-
<PAGE>

interest rates. Prepayment and early withdrawal levels also could deviate
significantly from those assumed in calculating the interest rate gap. The
ability of many borrowers to service their debts also may decrease during
periods of rising interest rates.

     Changes in interest rates also affect our liquidity position.  We currently
price deposits in response to market rates and it is management's intention to
continue this policy.  If deposits are not priced in response to market rates, a
loss of deposits could occur that would negatively affect our liquidity
position.

     At December 31, 2000, our cumulative one year interest rate-sensitivity gap
ratio was 62%. Our targeted ratio is 80% to 120% in this time horizon.  This
indicates that our interest-bearing liabilities will reprice during this period
at a rate faster than our interest-earning assets.  For internal reporting
purposes, we do not consider interest-bearing demand and savings accounts to be
interest rate sensitive.  Adjusting for these deposits, our cumulative one year
interest rate-sensitivity gap ratio would be 81%.  It is also noted that over
80% of our certificates of deposit greater than $100,000 mature within the one
year time horizon. We believe that as long as we pay the prevailing market rate
on these type deposits, our liquidity, while not assured, will not be negatively
affected.

     The following table sets forth the distribution of the repricing of our
interest-earning assets and interest-bearing liabilities as of December 31,
2000, the interest rate-sensitivity gap, the cumulative interest rate-
sensitivity gap, the interest rate-sensitivity gap ratio and the cumulative
interest rate-sensitivity gap ratio.  The table also sets forth the time periods
in which interest-earning assets and interest-bearing 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 as the repricing of various categories of assets and
liabilities is subject to competitive pressures and the needs of our 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.

                                      -26-
<PAGE>

<TABLE>
<CAPTION>

                                            After      After
                                            Three       One
                                           Months    Year but
                                 Within      but      Within     After
                                  Three    Within      Five      Five
                                 Months   One Year     Years     Years    Total
                                             (Dollars in Thousands)
<S>                              <C>      <C>        <C>        <C>      <C>
Interest-earning assets:
  Interest-bearing
     deposits in banks           $   114  $     --   $     --    $   --  $   114
  Federal funds sold               4,690        --         --        --    4,690
  Securities                         436        --      5,984     1,992    8,412
  Loans                           20,573     7,881     29,009        86   57,549
                                 -------  --------   --------   -------  -------

                                  25,813     7,881     34,993     2,078   70,765
                                 -------  --------   --------   -------  -------
Interest-bearing liabilities:
  Interest-bearing demand
     deposits                     12,133        --         --        --   12,133
  Savings                            815        --         --        --      815
  Certificates, less than
     $100,000                      4,627    16,989      4,076        --   25,692
  Certificates, $100,000
     and over                      3,162    16,981      4,618        --   24,761
                                 -------  --------   --------   -------  -------

                                  20,737    33,970      8,694        --   63,401
                                 -------  --------   --------   -------  -------

Interest rate sensitivity
  gap                            $ 5,076  $(26,089)  $ 26,299   $ 2,078  $ 7,364
                                 =======  ========   ========   =======  =======
Cumulative interest rate
  sensitivity gap                $ 5,076  $(21,013)  $  5,286   $ 7,364
                                 =======  ========   ========   =======
Interest rate sensitivity
  gap ratio                         1.24      0.23       4.02        --
                                 =======  ========   ========   =======
Cumulative interest rate
  sensitivity gap ratio             1.24      0.62       1.08      1.12
                                 =======  ========   ========   =======
</TABLE>

                                      -27-
<PAGE>

              SELECTED FINANCIAL INFORMATION AND STATISTICAL DATA

     The tables and schedules on the following pages set forth certain
significant financial information and statistical data with respect to: the
distribution of assets, liabilities and stockholders' equity, the interest rates
we experience; our investment portfolio; our loan portfolio, including types of
loans, maturities, and sensitivities of loans to changes in interest rates and
information on nonperforming loans; summary of the loan loss experience and
allowance for loan losses; types of deposits and the return on equity and
assets.

                                      -28-
<PAGE>

                    DISTRIBUTION OF ASSETS, LIABILITIES, AND
                             STOCKHOLDERS' EQUITY:
                   INTEREST RATES AND INTEREST DIFFERENTIALS

Average Balances

     The condensed average balance sheet for the period indicated is presented
below. (1)

                                     Years Ended December 31,
                                          2000      1999
                                      (Dollars in Thousands)

  ASSETS

Cash and due from banks                  $ 1,947   $ 1,514
Interest-bearing deposits in banks           108        30
Taxable securities                         8,044     1,445
Securities valuation account                 (34)       (1)
Federal funds sold                         4,717     5,310
Loans (2)                                 45,594    21,547
Allowance for loan losses                   (671)     (281)
Other assets                               5,731     2,335
                                         -------   -------
                                         $65,436   $31,899
                                         =======   =======

Total interest-earning assets            $58,463   $28,332
                                         =======   =======

 LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:
 Noninterest-bearing demand              $ 5,541   $ 3,934
 Interest-bearing demand                  10,769     6,352
 Savings                                     625       466
 Time                                     40,250    13,677
                                         -------   -------
  Total deposits                         $57,185   $24,429

 Other liabilities                           822       201
                                         -------   -------
  Total liabilities                       58,007    24,630
 Stockholders' equity                      7,429     7,269
                                         -------   -------
                                         $65,436   $31,899
                                         =======   =======

 Total interest-bearing liabilities      $51,644   $20,495
                                         =======   =======

(1)  Average balances were determined using the daily average balances during
     the year for each category.

(2)  Nonaccrual loans included in average loans were $16,000 and $1,000 in 2000
     and 1999, respectively.

                                      -29-
<PAGE>

Interest Income and Interest Expense

     The following tables set forth the amount of our interest income and
interest expense 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.


                                           Years Ended December 31,
                                          2000                1999
                                              Average              Average
                                    Interest   Rate     Interest    Rate
                                            (Dollars in Thousands)

INTEREST INCOME:
 Interest and fees on loans (1)      $5,117    11.22%    $2,411     11.19%
 Interest on taxable securities         560     6.96         85      5.90
 Interest on Federal funds sold         298     6.32        271      5.09
 Interest on deposits in banks            7     6.19          1      3.79
                                     ------              ------
 Total interest income               $5,982    10.23     $2,768      9.77
                                     ------              ------

INTEREST EXPENSE:
 Interest on interest-bearing
  demand deposits                    $  341     3.16     $  173      2.71
 Interest on savings deposits            12     1.96          9      1.96
 Interest on time deposits            2,630     6.54        768      5.62
                                     ------              ------
 Total interest expense              $2,983     5.78     $  950      4.63
                                     ------              ------

NET INTEREST INCOME                  $2,999              $1,818
                                     ======              ======

 Net interest spread                            4.45%                5.14%
                                               =====                =====
 Net yield on average interest-earning assets   5.13%                6.42%
                                               =====                =====

(1)  Interest and fees on loans includes $513,000 and $359,000 of loan fee
     income for the years ended December 31, 2000 and 1999, respectively.  There
     was no interest income recognized on nonaccrual loans during 2000 or 1999.

                                      -30-
<PAGE>

Rate and Volume Analysis

     The following table describes the extent to which changes in interest rates
and changes in volume of interest-earning assets and interest-bearing
liabilities have affected our interest income and expense during the year
indicated. For each category of interest-earning assets and interest-bearing
liabilities, information is provided on changes attributable to (1) change in
volume (change in volume multiplied by old rate); (2) change in rate (change in
rate multiplied by old volume); and (3) a combination of change in rate and
change in volume. The changes in interest income and interest expense
attributable to both volume and rate have been allocated proportionately on a
consistent basis to the change due to volume and the change due to rate.

                                               Year Ended December 31,
                                                    2000 vs. 1999
                                                   Changes Due To:

                                               Rate     Volume      Net
                                               (Dollars in Thousands)
Increase (decrease) in:
 Income from interest-earning assets:
 Interest and fees on loans                    $  7     $2,699     $2,706
 Interest on taxable securities                  18        457        475
 Interest on Federal funds sold                  60        (33)        27
 Interest on deposits in banks                    1          5          6
                                               ----     ------     ------
  Total interest income                          86      3,128      3,214
                                               ----     ------     ------

 Expense from interest-bearing liabilities:
 Interest on interest-bearing
  demand deposits                                32        136        168
 Interest on savings deposits                     -          3          3
 Interest on time deposits                      145      1,717      1,862
                                               ----     ------     ------
  Total interest expense                        177      1,856      2,033
                                               ----     ------     ------

  Net interest income                          $(91)    $1,272     $1,181
                                               ====     ======     ======

                                      -31-
<PAGE>

                              INVESTMENT PORTFOLIO

Types of Investments

     The carrying amounts of securities at the dates indicated, which are all
classified as available-for-sale, are summarized as follows:

                                December 31,
                               2000      1999
                           (Dollars in Thousands)

U.S. Government agencies      $7,500    $5,977
Mortgage-backed securities       476         -
                              ------    ------
                               7,976     5,977
Equity securities                436       436
                              ------    ------
                              $8,412    $6,413
                              ======    ======

Maturities

     The amounts of debt securities, including the weighted average yield 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
through five years, (3) after five through ten years and (4) after ten years.
Equity securities are not included in the table because they have no contractual
maturity.
<TABLE>
<CAPTION>

                                                       After one year       After five years
                                 One year or less    through five years    through ten years
                                Amount    Yield(1)    Amount   Yield(1)     Amount  Yield(1)
<S>                             <C>       <C>         <C>      <C>          <C>     <C>

U.S. Government agencies        $  -         -%       $5,984     6.99%      $1,516  7.42%
Mortgage-backed securities         -         -             -        -            -     -
                                ----                  ------                ------
                                $  -         -        $5,984     6.99       $1,516  7.42
                                ====                  ======                ======


                                 After ten years            Total
                               Amount    Yield(1)     Amount    Yield(1)

U.S. Government agencies        $  -         -%       $7,500     7.08%
Mortgage-backed securities       476      7.00           476     7.00
                                ----                  ------
                                $476      7.00        $7,976     7.08
                                ====                  ======
</TABLE>
(1)  The weighted average 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.

                                      -32-
<PAGE>

                                 LOAN PORTFOLIO

Types of Loans

     The amounts of loans outstanding at the indicated dates are shown in the
following table according to the type of loan.

                                           December 31,
                                           2000      1999
                                     (Dollars in Thousands)

Commercial                              $ 6,839   $ 3,609
Real estate-construction                  8,741     9,012
Real estate-mortgage                     34,028    17,170
Consumer installment loans and other      7,941     4,787
                                        -------   -------
                                         57,549    34,578
Less allowance for loan losses             (866)     (520)
                                        -------   -------
 Net loans                              $56,683   $34,058
                                        =======   =======

Maturities and Sensitivities of Loans to Changes in Interest Rates

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

                                                  (Dollars in Thousands)
  Commercial
     One year or less                                    $ 4,299
     After one year through five years                     2,540
     After five years                                          -
                                                         -------
                                                           6,839
                                                         -------
  Construction
     One year or less                                      8,741
     After one year through five years                         -
     After five years                                          -
                                                         -------
                                                           8,741
                                                         -------
  Other
     One year or less                                     17,637
     After one year through five years                    24,115
     After five years                                        217
                                                         -------
                                                          41,969
                                                         -------

                                                         $57,549
                                                         =======


                                      -33-
<PAGE>

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


                                        (Dollars in Thousands)

     Predetermined interest rates             $20,077
     Floating or adjustable interest rates      6,795
                                              -------
                                              $26,872
                                              =======

Risk Elements

     Information with respect to nonaccrual, past due, restructured and other
problem loans at December 31, 2000 and 1999 is as follows:

                                                           December 31,
                                                         2000       1999
                                                      (Dollars in Thousands)

Nonaccrual loans                                          $35       $  11
Loans contractually past due ninety
 days or more as to interest or
 principal payments and still accruing                      0           0
Restructured loans                                          0           0
Loans, now current about which there are
 serious doubts as to the ability of the
 borrower to comply with loan repayment terms               0           0
Interest income that would have been recorded
 on nonaccrual and restructured loans under
 original terms                                             1           0
Interest income that was recorded on
 nonaccrual and restructured loans                          0           0

     It is our policy to discontinue the accrual of interest income when, in the
opinion of management, collection of interest becomes doubtful.  This status is
accorded interest when (1) there is a significant deterioration in the financial
condition of the borrower and full repayment of principal and interest is not
expected and (2) the principal or interest is more than ninety days past due,
unless the loan is both well-secured and in the process of collection.

     Loans classified for regulatory purposes as loss, doubtful, substandard, or
special mention that have not been included in the table above do not represent
or result from trends or uncertainties that management reasonably expects will
materially impact future operating results, liquidity, or capital resources.
These classified loans do not represent material credits about which management
is aware of any information that causes management to have serious doubts as to
the ability of such borrowers to comply with the loan repayment terms.

                                      -34-
<PAGE>

                        SUMMARY OF LOAN LOSS EXPERIENCE

     The following table summarizes average loan balances for the year
determined using the daily average balances during the year; changes in the
allowance for loan losses arising from loans charged off; recoveries on loans
previously charged off; additions to the allowance which have been charged to
operating expense; and the ratio of net charge-offs during the year to average
loans.


                                            Years Ended December 31,
                                                  2000      1999
                                             (Dollars in Thousands)

Average amount of loans outstanding            $45,594   $21,547
                                               =======   =======

Balance of allowance for loan losses
 at beginning of period                        $   520   $    40
                                               -------   -------

Loans charged off:
 Instalment loans                                   10         4
 Real estate-mortgage                                5         -
                                               -------   -------
                                                    15         4
                                               -------   -------

Loans recovered                                      -         -
                                               -------   -------

Net charge-offs                                     15         4
                                               -------   -------

Additions to allowance charged to operating
 expense during year                               361       484
                                               -------   -------

Balance of allowance for loan losses
 at end of year                                $   866   $   520
                                               =======   =======

Ratio of net loans charged off during the
year to average loans outstanding                  .03%      .02%
                                               =======   =======

Allowance for Loan Losses

     The allowance for loan losses is maintained at a level that is deemed
appropriate by us to adequately cover all known and inherent risks in the loan
portfolio.  Our evaluation of the loan portfolio includes a periodic review of
loan loss experience, current economic conditions that may affect the borrower's
ability to pay and the underlying collateral value of the loans.

                                      -35-
<PAGE>

     As of December 31, 2000 and 1999, management had made no allocations of its
allowance for loan losses to specific categories of loans.  Based on
management's best estimate, the allocation of the allowance for loan losses to
types of loans, as of the indicated dates, is as follows:
<TABLE>
<CAPTION>

                                 December 31, 2000             December 31, 1999
                                       Percent of loans             Percent of loans
                                       in each category             in each category
                              Amount   to total loans      Amount   to total loans
                                            (Dollars in Thousands)
<S>                          <C>          <C>              <C>         <C>
Commercial                   $   173       11.88%          $   104      10.44%
Real estate-construction         260       15.19               156      26.06
Real estate-mortgage             346       59.13               208      49.66
Consumer instalment
 loans and other                  87       13.80                52      13.84
                             -------      ------           -------      -----
                             $   866      100.00%          $   520     100.00%
                             =======      ======           =======     ======
</TABLE>

                                      -36-
<PAGE>

                                    DEPOSITS

     Average amount of deposits and average rates paid thereon, classified as to
noninterest-bearing demand deposits, interest-bearing demand deposits, savings
deposits, and time deposits, for the year is presented below. (1)

                                           Periods Ended December 31,
                                            2000                1999
                                       Amount  Percent     Amount   Percent
                                              (Dollars in Thousands)

Noninterest-bearing demand deposits    $5,541      --%     $ 3,934       --%
Interest-bearing demand deposits       10,769    3.16        6,352     2.71
Savings deposits                          625    1.96          466     1.96
Time deposits                          40,250    6.54       13,677     5.62
                                      -------              -------
                                      $57,185              $24,429
                                      =======              =======

(1)  Average balances were determined using the daily average balances during
     the year.

     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 six months, (3) over six through twelve months, and (4) over twelve
months.

                                    (Dollars in Thousands)

  Three months or less                     $ 3,162
  Over three months through six months       4,165
  Over six months through twelve months     12,816
  Over twelve months                         4,618
                                           -------
       Total                               $24,761
                                           =======

                   RETURN ON ASSETS AND STOCKHOLDERS' EQUITY

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

                            Years Ended December 31,
                                 2000    1999

  Return on assets (1)            .74%  (.74)%
  Return on equity (2)           6.56  (3.23)
  Dividend payout ratio (3)         -       -
  Equity to assets ratio (4)    11.35   22.79

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

                                      -37-
<PAGE>

Item 7.  Financial Statements and Supplementary Data.
----------------------------------------------------

                             UNITY HOLDINGS, INC.
                                AND SUBSIDIARY

                         CONSOLIDATED FINANCIAL REPORT
                               DECEMBER 31, 2000


                  INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
                  -------------------------------------------


                                                             Page
                                                             ----

INDEPENDENT AUDITOR'S REPORT..............................    39

FINANCIAL STATEMENTS

  Consolidated balance sheets.............................    40
  Consolidated statements of operations...................    41
  Consolidated statements of comprehensive income (loss)..    42
  Consolidated statements of stockholders' equity.........    43
  Consolidated statements of cash flows...................    44
  Notes to consolidated financial statements.............. 45-60


                                      -38-
<PAGE>

                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors
Unity Holdings, Inc. and Subsidiary
Cartersville, Georgia

          We have audited the accompanying consolidated balance sheets of Unity
Holdings, Inc. and subsidiary as of December 31, 2000 and 1999, and the related
consolidated statements of operations, 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 audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
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 Unity
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



Atlanta, Georgia
January 12, 2001

                                      -39-
<PAGE>

<TABLE>
<CAPTION>
                              UNITY HOLDINGS, INC.
                                AND SUBSIDIARY

                          CONSOLIDATED BALANCE SHEETS
                          DECEMBER 31, 2000 AND 1999

        Assets                                                     2000           1999
                                                             ------------     ------------
<S>                                                          <C>              <C>
Cash and due from banks                                      $  2,103,763     $  3,125,724
Interest-bearing deposits in banks                                114,424          101,844
Federal funds sold                                              4,690,000        4,440,000
Securities available-for-sale                                   8,412,465        6,413,483

Loans                                                          57,548,596       34,578,269
Less allowance for loan losses                                    865,663          519,766
                                                             ------------     ------------
          Loans, net                                           56,682,933       34,058,503

Premises and equipment                                          5,046,537        3,254,347
Other assets                                                    1,327,107          672,529
                                                             ------------     ------------

          Total assets                                       $ 78,377,229     $ 52,066,430
                                                             ============     ============

Liabilities and Stockholders' Equity

Deposits
    Noninterest-bearing                                      $  6,494,041     $  4,828,902
    Interest-bearing                                           63,400,788       39,482,968
                                                             ------------     ------------
         Total deposits                                        69,894,829       44,311,870
    Other liabilities                                             669,206          516,372
                                                             ------------     ------------
         Total liabilities                                     70,564,035       44,828,242
                                                             ------------     ------------

Commitments and contingencies

Stockholders' equity
    Preferred stock, par value $.01; 10,000,000 shares
        authorized; none issued                                         -                -
    Common stock, par value $.01; 10,000,000 shares
        authorized; 839,211 issued and outstanding                  8,392            8,392
    Capital surplus                                             8,076,469        8,076,469
    Accumulated deficit                                          (342,934)        (830,083)
    Accumulated other comprehensive income (loss)                  71,267          (16,590)
                                                             ------------     ------------

          Total stockholders' equity                            7,813,194        7,238,188
                                                             ------------     ------------

          Total liabilities and stockholders' equity         $ 78,377,229     $ 52,066,430
                                                             ============     ============
</TABLE>

See Notes to Consolidated Financial Statements.

                                      -40-
<PAGE>

<TABLE>
<CAPTION>
                             UNITY HOLDINGS, INC.
                                AND SUBSIDIARY

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                    YEARS ENDED DECEMBER 31, 2000 AND 1999

                                                                     2000              1999
                                                                -------------     -------------
<S>                                                             <C>                <C>
Interest income
    Loans                                                       $   5,117,517      $  2,410,767
    Taxable securities                                                559,943            85,290
    Federal funds sold                                                298,052           270,446
    Interest-bearing deposits in banks                                  6,709             1,142
                                                                -------------     -------------
          Total interest income                                     5,982,221         2,767,645

Interest expense on deposits                                        2,983,169           949,498
                                                                -------------     -------------

          Net interest income                                       2,999,052         1,818,147
Provision for loan losses                                             360,854           484,200
                                                                -------------     -------------
          Net interest income after provision for loan losses       2,638,198         1,333,947
                                                                -------------     -------------


Other income
    Service charges on deposit accounts                               221,517           119,952
    Other operating income                                            200,692           159,792
                                                                -------------     -------------
          Total other income                                          422,209           279,744
                                                                -------------     -------------


Other expenses
    Salaries and employee benefits                                  1,334,720         1,019,383
    Equipment and occupancy expenses                                  401,011           252,549
    Other operating expenses                                          837,527           576,395
                                                                -------------     -------------
          Total other expenses                                      2,573,258         1,848,327
                                                                -------------     -------------



          Income (loss) before income taxes                           487,149          (234,636)

Income tax expense                                                          -                 -
                                                                -------------     -------------
                    Net income (loss)                           $     487,149      $   (234,636)
                                                                =============      ============

Basic earnings (losses) per share                               $        0.58      $      (0.28)
                                                                =============      ============

Diluted earnings (losses) per share                             $        0.56      $      (0.28)
                                                                =============      ============


See Notes to Consolidated Financial Statements.

</TABLE>

                                      -41-
<PAGE>

<TABLE>
<CAPTION>
                                    UNITY HOLDINGS, INC.
                                       AND SUBSIDIARY

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

                                                           2000               1999
                                                        ----------        -----------
<S>                                                     <C>               <C>
Net income (loss)                                       $  487,149        $  (234,636)

Other comprehensive income (loss):

    Unrealized holding gains (losses) on securities
       available-for-sale arising during period             87,857            (16,590)
                                                        ----------        -----------
Comprehensive income (loss)                             $  575,006        $  (251,226)
                                                        ==========        ===========

See Notes to Consolidated Financial Statements.

</TABLE>

                                      -42-
<PAGE>

<TABLE>
<CAPTION>
                                                  UNITY HOLDINGS, INC.
                                                     AND SUBSIDIARY

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

                                                                                                  Accumulated
                                                                                                     Other             Total
                                             Common Stock          Capital      Accumulated     Comprehensive     Stockholders'
                                         Shares     Par Value      Surplus        Deficit       Income (Loss)        Equity
                                         -------    ---------   ------------    ------------    -------------     -------------
<S>                                      <C>        <C>          <C>             <C>             <C>               <C>
Balance, December 31, 1998               838,711    $  8,387    $  8,071,474    $ (595,447)       $        -       $ 7,484,414
    Net loss                                   -           -               -      (234,636)                -          (234,636)
    Issuance of common stock                 500           5           4,995             -                 -             5,000
    Other comprehensive loss                   -           -               -             -           (16,590)          (16,590)
                                         -------    --------    ------------    ----------        ----------       -----------
Balance, December 31, 1999               839,211       8,392       8,076,469      (830,083)          (16,590)        7,238,188
    Net income                                 -           -               -       487,149                 -           487,149
    Other comprehensive income                 -           -               -             -            87,857            87,857
                                         -------    --------    ------------    ----------        ----------       -----------
Balance, December 31, 2000               839,211    $  8,392    $  8,076,469    $ (342,934)       $   71,267       $ 7,813,194
                                         =======    ========    ============    ==========        ==========       ===========


See Notes to Consolidated Financial Statements.
</TABLE>

                                      -43-
<PAGE>

<TABLE>
<CAPTION>
                                         UNITY HOLDINGS, INC.
                                           AND SUBSIDIARY

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

                                                                      2000             1999
                                                                  -----------     ------------
<S>                                                               <C>             <C>
OPERATING ACTIVITIES
    Net income (loss)                                             $   487,149     $   (234,636)
    Adjustments to reconcile net income (loss) to net cash
        provided by operating activities:
        Depreciation                                                  245,169          114,452
        Deferred income tax                                          (220,994)          (2,995)
        Provision for loan losses                                     360,854          484,200
        Increase in interest receivable                              (275,007)        (273,773)
        Increase in interest payable                                  140,404          410,006
        Other operating activities                                    (20,347)          67,555
                                                                  -----------     ------------
              Net cash provided by operating activities               717,228          564,809
                                                                  -----------     ------------

INVESTING ACTIVITIES
    Purchases of securities available-for-sale                     (2,932,030)      (6,220,073)
    Proceeds from maturities of securities available-for-sale       1,020,905                -
    Net increase in interest-bearing deposits in banks                (12,580)        (101,844)
    Net (increase) decrease in Federal funds sold                    (250,000)       1,400,000
    Net increase in loans                                         (22,985,284)     (31,335,665)
    Purchase of premises and equipment                             (2,037,359)      (1,965,521)
    Purchase of life insurance policies                              (125,800)        (355,169)
                                                                  -----------     ------------

            Net cash used in investing activities                 (27,322,148)     (38,578,272)
                                                                  -----------     ------------


FINANCING ACTIVITIES
    Net increase in deposits                                       25,582,959       40,752,672
    Proceeds from sale of common stock                                      -            5,000
                                                                  -----------     ------------

            Net cash provided by financing activities              25,582,959       40,757,672
                                                                  -----------     ------------

Net increase (decrease) in cash and due from banks                 (1,021,961)       2,744,209

Cash and due from banks at beginning of year                        3,125,724          381,515
                                                                  -----------     ------------

Cash and due from banks at end of year                            $ 2,103,763     $  3,125,724
                                                                  ===========     ============

SUPPLEMENTAL DISCLOSURE
    Cash paid for:
        Interest                                                  $ 2,842,765     $    539,492

        Income taxes                                              $   202,994     $          -

See Notes to Consolidated Financial Statements.

</TABLE>

                                      -44-
<PAGE>

                              UNITY HOLDINGS, INC.
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Unity Holdings, Inc. (the "Company") is a bank holding company whose business is
conducted by its wholly-owned subsidiary, Unity National Bank (the "Bank").  The
Bank is a commercial bank located in Cartersville, Bartow County, Georgia with a
branch in Adairsville, Georgia and a mortgage loan production office in Calhoun,
Gordon County, Georgia.  The Bank provides a full range of banking services in
its primary market area of Bartow County and the surrounding counties.

Basis of Presentation

The consolidated financial statements include the accounts of the Company and
its subsidiary. Significant intercompany transactions and accounts are
eliminated in consolidation.

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 the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.  Material estimates
that are particularly susceptible to significant change in the near term relate
to the determination of the allowance for loan losses, the valuation of
foreclosed real estate, and deferred taxes.

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, interest-bearing deposits in banks, 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.

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, 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.

                                      -45-
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loans

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

Nonrefundable loan fees and certain direct loan origination costs are deferred
and recognized in income over the life of the loans.

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 loan is 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.

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 Company's
allowance for loan losses, and may require the Company 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 Company 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. Depreciation is 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 Company had
no other real estate owned at December 31, 2000 or 1999.

                                      -46-
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Transfers of Financial Assets

Transfers of financial assets are accounted for as sales, when control over the
assets has been surrendered. Control over transferred assets is deemed to be
surrendered when (1) the assets have been isolated from the Company, (2) the
transferee obtains the right (free of conditions that constrain it from taking
advantage of that right) to pledge or exchange the transferred assets, and (3)
the Company does not maintain effective control over the transferred assets
through an agreement to repurchase them before their maturity.

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.

Stock Compensation Plans

Statement of Financial Accounting Standards ("SFAS") No. 123, Accounting for
Stock-Based Compensation, encourages all entities to adopt a fair value based
method of accounting for employee stock compensation plans, whereby compensation
cost is measured at the grant date based on the value of the award and is
recognized over the service period, which is usually the vesting period.
However, it also allows an entity to continue to measure compensation cost for
those plans using the intrinsic value based method of accounting prescribed by
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees, whereby compensation cost is the excess, if any, of the quoted market
price of the stock at the grant date (or other measurement date) over the amount
an employee must pay to acquire the stock.  Stock options issued under the
Company's stock option plan have no intrinsic value at the grant date, and under
Opinion No. 25 no compensation cost is recognized for them.  The Company has
elected to continue with the accounting methodology in Opinion No. 25 and, as a
result, has provided pro forma disclosures of net income and earnings per share
and other disclosures, as if the fair value based method of accounting had been
applied.

Earnings (Losses) Per Share

Basic earnings (losses) per share are computed by dividing net income (loss) by
the weighted average number of shares of common stock outstanding.  Diluted
earnings (losses) per share are computed by dividing net income (loss) by the
sum of the weighted average number of shares of common stock outstanding and
potential common shares.  Potential common shares consist of stock options.

Comprehensive Income

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.

                                      -47-
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Developments

In June 1998, the Financial Accounting Standards Board 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.

NOTE 2.   SECURITIES AVAILABLE-FOR-SALE

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           $  7,431,911  $  70,184     $   (1,875)   $  7,500,220
    Mortgage-backed securities         473,378      2,958              -         476,336
    Equity securities                  112,709          -              -         112,709
    Restricted equity securities       323,200          -              -         323,200
                                  ------------  ---------     ----------    ------------
                                  $  8,341,198  $  73,142     $   (1,875)   $  8,412,465
                                  ============  =========     ==========    ============
    December 31, 1999:
    U.S. Government and
      agency securities           $  5,994,164  $     390     $  (16,980)   $  5,977,574
    Equity securities                  112,709          -              -         112,709
    Restricted equity securities       323,200          -              -         323,200
                                  ------------  ---------     ----------    ------------
                                  $  6,430,073  $     390     $  (16,980)   $  6,413,483
                                  ============  =========     ==========    ============
</TABLE>

There were no pledged securities at December 31, 2000 or 1999.  There were no
sales of securities in 2000 or 1999.

                                      -48-
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2.   SECURITIES AVAILABLE-FOR-SALE (Continued)

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 of mortgage-backed securities because the mortgages underlying the
securities may be called or repaid without penalty.  Therefore, these securities
are not included in the maturity categories in the following summary.

                                        Securities
                                     Available-for-Sale
                                  ---------------------------
                                    Amortized        Fair
                                       Cost          Value
                                  ------------   ------------

    Due from one to five years    $  5,931,911   $  5,984,560
    Due from five to ten years       1,500,000      1,515,660
    Mortgage-backed securities         473,378        476,336
                                  ------------   ------------
                                  $  7,905,289   $  7,976,556
                                  ============   ============

NOTE 3.   LOANS

The composition of loans is summarized as follows:

                                                      December 31,
                                             -----------------------------
                                                  2000            1999
                                             -------------   -------------
  Commercial, financial, and agricultural    $   6,839,000   $   3,609,000
  Real estate - construction                     8,741,000       9,012,000
  Real estate - mortgage                        34,150,000      17,240,000
  Consumer, instalment and other                 7,941,366       4,787,731
                                             -------------   -------------
                                                57,671,366      34,648,731
  Unearned income                                 (122,770)        (70,462)
  Allowance for loan losses                       (865,663)       (519,766)
                                             -------------   -------------
  Loans, net                                 $  56,682,933   $  34,058,503
                                             =============   =============

Changes in the allowance for loan losses are as follows:

                                                Years Ended December 31,
                                               --------------------------
                                                  2000           1999
                                               ------------ -------------
    Balance, beginning of year                  $  519,766   $   40,000
    Provision for loan losses                      360,854      484,200
    Loans charged off                              (14,957)      (4,434)
    Recoveries of loans previously charged off           -            -
                                                ----------   ----------
    Balance, end of year                        $  865,663   $  519,766
                                                ==========   ==========

                                      -49-
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 3.   LOANS (Continued)

The total recorded investment in impaired loans was $46,500 and $11,058 at
December 31, 2000 and 1999, respectively.  There were no impaired loans that had
related allowances for loan losses determined in accordance with SFAS No. 114,
Accounting by Creditors for Impairment of a Loan, at December 31, 2000 and 1999.
The average recorded investment in impaired loans for 2000 and 1999 was $16,146
and $1,617, respectively.  Interest income recognized on impaired loans for cash
payments received was not material for the years ended December 31, 2000 and
1999.

In the ordinary course of business, the Company 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 year ended December
31, 2000 are as follows:

    Balance, beginning of year  $   283,754
    Advances                         95,381
    Repayments                     (122,553)
                                -----------
    Balance, end of year        $   256,582
                                ===========


NOTE 4.   PREMISES AND EQUIPMENT

Premises and equipment are summarized as follows:

                                          December 31,
                                   --------------------------
                                       2000           1999
                                   -----------    -----------
  Land                             $ 1,139,676    $ 1,139,676
  Buildings                          3,054,837              -
  Leasehold improvements                     -         47,124
  Equipment                          1,129,184        317,980
  Construction and equipment
    installation in process                  -      1,870,234
                                   -----------    -----------
                                     5,323,697      3,375,014
  Accumulated depreciation            (277,160)      (120,667)
                                   -----------    -----------
                                   $ 5,046,537    $ 3,254,347
                                   ===========    ===========

Through March of 2000, the Company operated out of leased modular facilities for
its branch and main office locations on a month-to-month basis.  Total rental
expense incurred for the lease of these facilities for the years ended December
31, 2000 and 1999 was $32,669 and $79,991, respectively.

                                      -50-
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5.   DEPOSITS

The aggregate amount of time deposits in denominations of $100,000 or more at
December 31, 2000 and 1999 was $24,760,697 and $10,344,388, respectively.  The
Company had brokered certificates of deposit at December 31, 2000 and 1999 of
$7,873,000 and $3,000,000, respectively.  The scheduled maturities of time
deposits at December 31, 2000 are as follows:

          2001         $  41,905,734
          2002             5,695,379
          2003               243,184
          2004               348,110
          2005             2,260,287
                       -------------
                       $  50,452,694
                       =============


NOTE 6.   STOCK OPTIONS AND WARRANTS

The Company has an incentive stock option plan and has reserved 150,000 shares
of common stock for issuance to key employees and directors.  Options are
granted at the fair value of the Company's common stock on the date of grant and
expire ten years from the effective date of the grant.  The options vest at a
rate of 20% per year.

Other pertinent information related to the options is as follows:

                                              Years Ended December 31,
                                     -------------------------------------------
                                              2000                1999
                                     -------------------------------------------
                                                 Weighted-             Weighted-
                                                  Average               Average
                                                 Exercise              Exercise
                                       Number      Price     Number      Price
                                     ---------   --------  ---------   --------

   Under option, beginning of year      51,960    $ 10.08          -    $     -
              Granted                        -          -     51,960      10.08
              Exercised                      -          -          -          -
              Terminated                     -          -          -          -
                                     ---------             ---------
   Under option, end of year            51,960      10.08     51,960      10.08
                                     =========             =========


   Exercisable, end of year             19,984      10.04      9,592      10.00
                                     =========             =========


   Weighted-average fair value of
    options granted during the year  $       -             $    4.83
                                     =========             =========


   Weighted-average remaining
    contractual life of all options    8 years               9 years

                                      -51-
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6.   STOCK OPTIONS AND WARRANTS (Continued)

In 1998, the Company granted 140,000 common stock warrants to its initial
directors.  The warrants are exercisable at a price of $10 per share and vested
in 1999.  The warrants and expire ten years from date of grant and have a
weighted average remaining contractual life of eight years.

The Company applies Opinion 25 and related Interpretations in accounting for
stock options and warrants. Accordingly, no compensation cost has been
recognized.  Had compensation cost for stock options and warrants been
determined based on the fair value at the grant dates for awards under the plan
consistent with the method prescribed by SFAS No. 123, net income (loss) and
earnings (losses) per share would have been adjusted to the pro forma amounts
indicated below.

                                                    Years Ended December 31,
                                                   -------------------------
                                                       2000         1999
                                                   ----------    -----------

    Net income (loss)             As reported      $  487,149    $  (234,636)
                                  Pro forma        $  436,956    $  (836,765)

    Earnings (losses) per share   As reported      $     0.58    $     (0.28)
                                  Pro forma        $     0.52    $     (0.99)

    Earnings (losses) per share - As reported      $     0.56    $     (0.28)
    assuming dilution             Pro forma        $     0.50    $     (0.99)

The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions:

                                Years Ended December 31,
                                ------------------------
                                   2000        1999
                                ---------   ------------
    Dividend yield                 N/A             0%
    Expected life                  N/A       10 years
    Expected volatility            N/A          9.49%
    Risk-free interest rate        N/A          6.77%


NOTE 7.    INCOME TAXES

Income tax expense consists of the following:

                                   Years Ended December 31,
                                   -------------------------
                                       2000         1999
                                   -----------   -----------
    Current                        $   220,994   $    31,503
    Deferred                           (51,936)     (111,434)
    Change in valuation allowance     (169,058)       79,931
                                   -----------   -----------
      Income tax expense           $         -   $         -
                                   ===========   ===========

                                      -52-
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 7.   INCOME TAXES (Continued)

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

                                           Years Ended December 31,
                                    -----------------------------------------
                                            2000                 1999
                                    ------------------     ------------------
                                       Amount  Percent        Amount  Percent
                                    ------------------     ------------------

    Income taxes at statutory rate  $   165,631    34 %    $  (79,776)  (34)%
    Other items                           3,427     1            (155)    -
    Change in valuation allowance      (169,058)  (35)         79,931    34
                                    -----------   ---      ----------   ---
    Income tax expense              $         -     - %    $        -     - %
                                    ===========   ===      ==========   ===

The components of deferred income taxes are as follows:

                                              Years Ended December 31,
                                              ------------------------
                                                  2000         1999
                                              ----------   -----------
   Deferred tax assets:
    Loan loss reserves                        $  210,149   $   114,002
    Preopening and organizational expenses       104,939       140,918
    Depreciation                                       -        10,560
    Loan fees                                     39,933        19,804
    Securities available-for-sale                      -         5,640
                                              ----------   -----------
                                                 355,021       290,924
    Valuation allowance                          (89,001)     (287,930)
                                              ----------   -----------
                                                 266,020         2,994
                                              ----------   -----------

   Deferred tax liabilities:
    Depreciation                                  17,801             -
    Securities available-for-sale                 24,231             -
                                              ----------   -----------
                                                  42,032             -
                                              ----------   -----------

    Net deferred tax assets                   $  223,988   $     2,994
                                              ==========   ===========

                                      -53-
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 8.   EARNINGS (LOSSES) PER SHARE

Presented below is a summary of the components used to calculate basic and
diluted earnings (losses) per common share.

                                                    Years Ended December 31,
                                                    ------------------------
                                                        2000        1999
                                                    ----------  -----------
    Basic Earnings (Losses) Per Share:
      Weighted average common shares outstanding         839,211      839,092
                                                      ==========  ===========


      Net income (loss)                               $  487,149  $  (234,636)
                                                      ==========  ===========


      Basic earnings (losses) per share               $     0.58  $     (0.28)
                                                      ==========  ===========


    Diluted Earnings Per Share:
      Weighted average common shares outstanding         839,211      839,092
      Net effect of the assumed exercise of stock
        options based on the treasury stock method
        using average market prices for the year          31,660        8,455
                                                      ----------  -----------
    Total weighted average common shares and
      common stock equivalents outstanding               870,871      847,547
                                                      ==========  ===========


      Net income (loss)                               $  487,149  $  (234,636)
                                                      ==========  ===========


      Diluted earnings (losses) per share             $     0.56  $     (0.28)
                                                      ==========  ===========


NOTE 9.   COMMITMENTS AND CONTINGENCIES

The Company 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 Company'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 Company uses the same credit policies in making commitments
and conditional obligations as it does for on-balance sheet instruments.  A
summary of the Company's commitments is as follows:

                                        December 31,
                                   -------------------------
                                       2000          1999
                                   -----------   -----------
    Commitments to extend credit   $ 6,002,000   $ 2,697,000
    Letters of credit                  320,000        79,000
                                   -----------   -----------
                                   $ 6,322,000   $ 2,776,000
                                   ===========   ===========

                                      -54-
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 9.   COMMITMENTS AND CONTINGENCIES

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
Company evaluates each customer's creditworthiness on a case-by-case basis.  The
amount of collateral obtained, if deemed necessary by the Company upon extension
of credit, is based on management's credit evaluation of the customer.

Standby letters of credit are conditional commitments issued by the Company 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 is required in
instances which the Company 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 10.  CONCENTRATIONS OF CREDIT

The Company originates primarily commercial, residential, and consumer loans to
customers in Bartow County and surrounding counties.  The ability of the
majority of the Company's customers to honor their contractual loan obligations
is dependent on the economy in these areas.

Seventy-four percent of the Company's loan portfolio is concentrated in loans
secured by real estate, of which a substantial portion is 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 Company, as a matter of policy, does not generally extend credit to any
single borrower or group of related borrowers in excess of 15% of the Bank's
capital and surplus as defined by the Office of the Comptroller of the Currency,
or approximately $1,288,000.

NOTE 11.  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, no
dividends could be declared 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 Company and 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 provisions are not applicable
to bank holding companies.

                                      -55-
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 11.  REGULATORY MATTERS (Continued)

Quantitative measures established by regulation to ensure capital adequacy
require the Company and 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 they are 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.

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>
                                                            (Dollars in Thousands)
    December 31, 2000:
    Total Capital to Risk Weighted Assets:
      Consolidated                             $  8,483  14.34%  $  4,733   8%     $     N/A    N/A
      Bank                                     $  8,463  14.31%  $  4,733   8%     $   5,916     10%
    Tier I Capital to Risk Weighted Assets:
      Consolidated                             $  7,742  13.09%  $  2,367   4%     $     N/A    N/A
      Bank                                     $  7,722  13.05%  $  2,367   4%     $   3,550      6%
    Tier I Capital to Average Assets:
      Consolidated                             $  7,742  10.21%  $  3,032   4%     $     N/A    N/A
      Bank                                     $  7,722  10.19%  $  3,032   4%     $   3,790      5%

    December 31, 1999:
    Total Capital to Risk Weighted Assets:
      Consolidated                             $  7,710  21.23%  $  2,906   8%     $     N/A    N/A
      Bank                                     $  7,667  21.11%  $  2,906   8%     $   3,632     10%
    Tier I Capital to Risk Weighted Assets:
      Consolidated                             $  7,255  19.98%  $  1,453   4%     $     N/A    N/A
      Bank                                     $  7,212  19.86%  $  1,453   4%     $   2,179      6%
    Tier I Capital to Average Assets:
      Consolidated                             $  7,255  15.18%  $  1,912   4%     $     N/A    N/A
      Bank                                     $  7,212  15.10%  $  1,911   4%     $   2,389      5%
</TABLE>

                                      -56-
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 12.  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 Company'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 No. 107, Disclosures about Fair Values of Financial Instruments, 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
Company.

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

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

Securities:

Fair values for securities are based on available quoted market prices.  The
carrying values of equity securities 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.

Accrued Interest:

The carrying amounts of accrued interest approximate their fair values.

                                      -57-
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 12.  FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

Off-Balance Sheet Instruments:

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

The carrying amounts and estimated fair 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, due from banks,
      interest-bearing deposits
      in banks, and federal
      funds sold                   $   6,908,187  $   6,908,187  $   7,667,568  $   7,667,568
    Securities available-for-sale      8,412,465      8,412,465      6,413,483      6,413,483
    Loans                             56,682,933     56,834,729     34,058,503     34,583,614
    Accrued interest receivable          560,255        560,255        285,248        285,248

    Financial liabilities:
    Deposits                          69,894,829     70,763,525     44,311,870     44,454,012
    Accrued interest payable             554,325        554,325        413,921        413,921
</TABLE>


NOTE 13.  SUPPLEMENTAL FINANCIAL DATA

Components of other operating income and expenses in excess of 1% of total
revenue are as follows:

                               Years Ended December 31,
                               ------------------------
                                   2000        1999
                               ------------------------
    Other operating income:
       Mortgage fee income     $  165,862  $  133,104
    Other operating expenses:
       Data processing            142,789     108,021
       Office supplies             72,720      43,384
       Telephone                   68,199      49,147
       Legal and professional      54,818      60,144
       Advertising                 90,152      74,709

                                      -58-
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 14.  PARENT COMPANY FINANCIAL INFORMATION

The following information presents the condensed balance sheets, statements of
operations, and cash flows of Unity Holdings, Inc. as of and for the years ended
December 31, 2000 and 1999:

                           CONDENSED BALANCE SHEETS

                                             2000           1999
                                        ------------    ------------
  Assets
    Cash                                $     20,190    $     26,010
    Investment in subsidiary               7,793,004       7,212,178
                                        ------------    ------------


      Total assets                      $  7,813,194    $  7,238,188
                                        ============    ============


  Total stockholders' equity            $  7,813,194    $  7,238,188
                                        ============    ============



                      CONDENSED STATEMENTS OF OPERATIONS

                                             2000         1999
                                          ----------   -----------
  Expenses, other                         $    5,820   $     9,012
                                          ----------   -----------


    Loss before equity in income (loss)
      of subsidiary                           (5,820)       (9,012)

  Equity in income (loss) of subsidiary      492,969      (225,624)
                                          ----------   -----------

    Net income (loss)                     $  487,149   $  (234,636)
                                          ==========   ===========

                                      -59-
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 14.  PARENT COMPANY FINANCIAL INFORMATION (Continued)

                       CONDENSED STATEMENTS OF CASH FLOWS

                                                       2000        1999
                                                     ---------    --------

 OPERATING ACTIVITIES
 Net income (loss)                                   $ 487,149   $(234,636)
 Adjustments to reconcile net income (loss) to net
   cash used in operating activities:
   Equity in (income) loss of subsidiary              (492,969)    225,624
                                                     ---------   ---------

     Net cash used in operating activities              (5,820)     (9,012)
                                                     ---------   ---------

 FINANCING ACTIVITIES
 Net proceeds from sale of common stock                      -       5,000
                                                     ---------   ---------


     Net cash provided by financing activities               -       5,000
                                                     ---------   ---------

 Net decrease in cash                                   (5,820)     (4,012)

 Cash at beginning of year                              26,010      30,022
                                                     ---------   ---------

 Cash at end of year                                 $  20,190   $  26,010
                                                     =========   =========

                                      -60-
<PAGE>

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

None.

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

     The Company's Bylaws provide that the Board of Directors shall be divided
into three classes with each class to be as nearly equal in number as possible.
The Bylaws also provide that the three classes of directors are to have
staggered terms, so that the terms of only approximately one-third of the Board
members will expire at each annual meeting of shareholders.  The current Class I
directors are Donald D. George, John S. Lewis and Michael L. McPherson.  The
current Class II directors are Sam R. McCleskey, Stephen A. Taylor and B. Don
Temples.  The current Class III directors are Kenneth R. Bishop and Jerry W.
Braden.  The Class III directors terms will expire at the 2001 Annual Meeting.
Each of the three current Class III directors has been nominated for reelection
and will stand for election at the 2001 Annual Meeting for a three year term.
The terms of the Class I directors will expire at the 2002 Annual Shareholders
Meeting, and the terms of the Class II directors will expire at the 2003 Annual
Shareholders Meeting.

     Set forth below is also information about each of the company's other
directors and each of its executive officers.  Each of the following directors
has been a director of the company since the company's formation in 1997.  Each
director is also a director of Unity National Bank.

     Donald D. George, 61, was born in Wardtown, Virginia.  He attended several
colleges including Virginia State University, ICBO Business School of Manhattan,
and St. Francis of Xavier College of Labor Relations.  Mr. George has been in
the transportation industry for over 30.  He owns and is the president of
Universal Transportation Corporation, established in October 1997, which
provides Medicaid and Medicare transportation.  In 1990, Mr. George formed his
own company, Free Enterprise of Atlanta, Inc. d/b/a George's Motor Coach, which
provides trip and shuttle services through the Atlanta area as well as out-of-
state charter trips.  He was also President of the 223rd Street Block
Association and Scout master of Boy Scout Troop 676.  Mr. George is a member of
the Cobb County Chamber of Commerce, the City of Atlanta Chamber of Commerce,
the Atlanta Business League, the City of Conyers Chamber of Commerce, and the
Board of Directors of National Key Women of America.

     John S. Lewis, 57, was born in Cartersville, Georgia.  He received a
Bachelor of Business Administration from the University of Georgia.  He received
a LLB in Law from Mercer University. Mr. Lewis is in the property management
business and manages jointly and independently owned income-producing real
estate and farm land.  He has been in the real estate sales and management
business since 1986.  He was a practicing attorney in Cartersville from 1970 to
1985.

                                      -61-
<PAGE>

     Michael L. McPherson, 51, was born in Cartersville, Georgia.  He received a
Bachelors Degree in Business Administration, cum laude, from Brenau College,
Gainesville, Georgia.  He graduated from several American Bankers association
schools on credit and lending.  He received the professional designation of
Certified Lender-Business Banking (CLBB) from the Institute of Certified
Bankers.  He graduated from the Georgia Bankers School at the University of
Georgia.  Mr. McPherson has been a banker since 1977, when he began his career
at Bartow County Bank, Cartersville, Georgia.  He worked in all phases of
banking from bookkeeping to senior vice president in charge of lending.  He was
employed by Bartow County Bank from 1977 to 1990.  In 1990, Mr. McPherson moved
to First Community Bank & Trust, Cartersville, Georgia as executive vice
president and chief lending officer.  He remained with First Community Bank &
Trust until September 1997, at which time he resigned to lead the formation of
Unity National Bank.  Mr. McPherson is a past director of the Alumni Board of
Governors of Reinhardt College; a past director of the Georgia Chapter of Bank
Administration 25 26 Institute; past president of the Young Bankers Section of
Community Bankers Association; a past member of the Board of Directors of Bartow
County Advocates for Children; a member of Center Baptist Church, Cartersville;
and active in various local charitable and civic organizations.

     Kenneth R. Bishop, 37, was born in Jacksonville, Florida.  He received a
Bachelors Degree in Business Administration - Marketing from the University of
Georgia.  Mr. Bishop is the previous owner of Daddy Pam's Coffeehouse which he
opened in March 1997.  Mr. Bishop is currently employed as a vice president of
Southern Color & Chemical Co., Inc.   He has been an active member and supporter
of the Sam Jones Methodist Church for many years.  In addition, he has been
active in a number of local charities, both financially and in service.

     Jerry W. Braden, 56, was born in Rome, Georgia.  He received a Bachelor of
Science Degree and a Masters Degree in Agricultural Economics from the
University of Georgia.  He is owner of a real estate management and development
company styled The Braden Group.  The Braden Group is a trade name used to
develop real estate, to sell real estate, and to own and manage apartment
complexes.  He has owned and operated The Braden Group since 1981.  Mr. Braden
has been actively involved in many civic endeavors in Bartow County, including
past chairman of the Market Analysis Research Committee for the Washington-based
Council for Affordable and Rural Housing; member of the Board of Directors of
the Bartow County Habitat for Humanity; member of the Board of Directors Bartow
County Home Builders Association; member of the Board of Trustees of the Sam
Jones Historic Home and Museum; member of Board of Directors of the
Cartersville-Bartow County Opera; and chairman of the Finance Committee of
Trinity United Methodist Church.

     Sam R. McCleskey, 60, was born in Woodstock, Georgia.  Since 1979, Mr.
McCleskey has been a supervisor in the tool and die area of Lockheed Martin
Corporation and also the owner of McCleskey Builders, Inc., a residential home
builder.

     Stephen A. Taylor, 45, was born in Fairmount, Georgia.  Mr. Taylor is the
owner of Taylor Farm Supply, which has served Cartersville, Georgia for nearly
50 years.  Mr. Taylor has attended Reinhardt College and Floyd College and is a
supporter of both these institutions.  He is a past

                                      -62-
<PAGE>

member of the Purina Corporation Advisory Board. Mr. Taylor also coached several
years in the Bartow County Recreation Department.

     B. Don Temples, 49, was born in Cartersville, Georgia.  Mr. Temples
received an Associate of Arts degree from Reinhardt College and a Bachelor of
Business Administration degree from the University of Georgia.  He is a licensed
real estate broker and co-owner of Temple's Construction, a residential real
estate development and construction company.

     None of the directors hold directorships in any reporting company other
than the Company. 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).

                                      -63-
<PAGE>

Compliance with Section 16(a) of the Securities Exchange Act of 1934

     Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Company under Rule 16a-3(d) during 1997 and Form 5 and
amendments thereto furnished to the Company during 2000, 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.

                                      -64-
<PAGE>

ITEM 10.  EXECUTIVE COMPENSATION.

          The following table shows the cash compensation paid by the Company or
Unity National Bank to its Chief Executive Officer and President for the years
ended December 31, 1998, 1999 and 2000.  No other executive officers of the
Company or Unity National Bank earned total annual compensation, including
salary and bonus, in excess of $100,000 in 2000.


                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

                                                                                       SECURITIES
                                                      OTHER ANNUAL      RESTRICTED     UNDERLYING         LTIP      ALL OTHER
NAME AND POSITION       YEAR    SALARY     BONUS    COMPENSATION/(1)/  STOCK AWARDS  OPTIONS/SARS(#)     PAYOUTS   COMPENSATION
<S>                     <C>     <C>        <C>      <C>                <C>           <C>                 <C>       <C>
MICHAEL L. McPHERSON    2000    123,792    18,150        -----             -----           -----          -----        -----
President and CEO       1999    110,000    24,383        -----             -----          17,500/(2)/     -----        -----
                        1998     92,185    16,134        -----             -----           -----          -----        -----
</TABLE>
________________________________________________________________________________

     /1/ Executive officers of the Company also received indirect compensation
in the form of certain perquisites and other personal benefits.  The amount of
such benefits received in the fiscal year by each named executive officer did
not exceed 10% of the executive's annual salary and bonus.

     /2/ In recognition for the financial risks they undertook in connection
with the formation of the Bank, each organizer of the Bank, who are also the
initial directors, received warrants to purchase 17,500 additional shares of
common stock, or an aggregate of 140,00 shares.  Mr. McPherson, President and
Chief Executive Officer of the Bank and also Director of the Company, received
warrants to purchase 17,500 additional shares of common stock exercisable at
$10.00 per share, expiring on November 30, 2008.

                                      -65-
<PAGE>

                    OPTION/SAR GRANTS IN LAST FISCAL YEAR
------------------------------------------------------------------------------
Name         # of              % of Total         Exercise or  Expiration Date
          Securities          Options/SARs        Base Price
          Underlying     Granted to Employees       $/Share
         Option/ SAR         in Fiscal Year
            Grants
------------------------------------------------------------------------------
 None         N/A                  N/A                N/A            N/A
------------------------------------------------------------------------------

                                      -66-
<PAGE>

<TABLE>
<CAPTION>
                              AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                                     AND FISCAL YEAR-END OPTION/SAR VALUES
---------------------------------------------------------------------------------------------------------------
Name              Shares Acquired   Value Realized       Number of Securities          Value of Unexercised
                  on Exercise (#)         (#)          Underlying Unexercised              in-the-money
                                                       Options/SARS at FY-End         options/SARs at FY-End
                                                     (Exercisable Unexercisable)   (Exercisable/Unexercisable)
                                                          Base Price $/Share
---------------------------------------------------------------------------------------------------------------
<S>               <C>               <C>              <C>                           <C>
CEO-Michael L.          -                 -                   17,500/0                   $52,500/0/(1)/
 McPherson
---------------------------------------------------------------------------------------------------------------
</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 on March
6, 2001 ($13.00) and the exercise prices of the options ($10.00).

                                      -67-
<PAGE>

Employment Agreements

     The Company has entered into an employment agreement with Mr. McPherson for
a five year term pursuant to which Mr. McPherson serves as the President and
Chief Executive Officer of the Company and Unity National Bank.   Mr. McPherson
receives an annual salary of $123,792, plus his yearly medical insurance
premium.  Mr. McPherson is also eligible to participate in any management
incentive program of the bank or any long-term equity incentive program and is
eligible for grants of stock options and other awards thereunder.  Additionally,
Mr. McPherson participates in the Bank's retirement, welfare and other benefit
programs and is entitled to a life insurance policy and an accident liability
policy and reimbursement for automobile expenses, club dues, and travel and
business expenses.  Following termination of his employment with the Bank and
for a period of twelve months thereafter, Mr. McPherson may not (i) be employed
in the banking business as a director, officer at the vice-president level or
higher, or organizer or promoter of, or provide executive management services
to, any financial institution within a ten-mile radius of the Bank's offices,
(ii) solicit major customers of the Bank for the purpose of providing financial
services, or (iii) solicit employees of the Bank for employment.

Director Compensation

     Neither the Company nor Unity National Bank paid directors' fees in 2000.

                                      -68-
<PAGE>

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

General

     The following table shows how much common stock in the Company is owned by
the directors, certain executive officers, and owners of more than 5% of the
outstanding common stock, as of December 31, 2000.  The information as to
beneficial ownership was furnished to the Company by or on behalf of the persons
named.  Unless otherwise indicated, each of the shareholders has sole voting and
vestment power with respect to the shares beneficially owned.  Percentage
ownership is calculated based on its outstanding shares.
<TABLE>
<CAPTION>

                                       Number of Shares     Percentage of Beneficial
Name                                      Owned (1)              Ownership*
----                                   ----------------     ------------------------
<S>                                      <C>          <C>
     Kenneth R. Bishop                     35,000(2)               3.57%
     Jerry W. Braden                       41,000(2)               4.19%
     Donald D. George                      35,000(2)               3.57%
     John S. Lewis                         35,000(2)               3.57%
     Sam R. McCleskey                      35,300(2)               3.61%
     Michael L. McPherson                  36,894(2)               3.77%
     Stephen A. Taylor                     40,400(2)               4.13%
     B. Don Temples                        38,500(2)               3.93%

     Executive officers and directors     297,094                 30.34%
     as a group (8 persons)
</TABLE>

_________________________________

* 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 shares for which the named person:
     1.   has sole voting and investment power,
     2.   has shared voting and investment power with a spouse, or

                                      -69-
<PAGE>

     3.   holds in an IRA or other retirement plan program, unless otherwise
          indicated in these footnotes.
(2)  Included in the above listed number of shares, each Director of the Company
     owns warrants to purchase 17,500 shares of common stock exercisable at
     $10.00 per share and have a term of 10 years.  These warrants became
     exercisable on November 30, 1999.

Item 12.  Certain Relationships and Related Transactions.
--------------------------------------------------------

     The Company and Unity National Bank have banking and other transactions in
the ordinary course of business with directors and officers of the Company and
Unity National Bank and their affiliates. It is the Company's policy that these
transactions be on substantially the same terms (including price, or interest
rates and collateral) as those prevailing at the time for comparable
transactions with unrelated parties.  The Company does not expect these
transactions to involve more than the normal risk of collectibility nor present
other unfavorable features to the Company or Unity National Bank. Loans to
individual directors and officers must also comply with Unity National Bank's
lending policies and statutory lending limits, and directors with a personal
interest in any loan application are excluded from the consideration of the loan
application.  The Company intends for all of its transactions with its
affiliates to be on terms no less favorable to the Company than could be
obtained from an unaffiliated third party and to be approved by a majority of
disinterested directors.

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

(a)  The following documents are filed as part of this report:

          3.1  Articles of Incorporation (incorporated by reference to Exhibit
               3.1 of the Registration Statement on Form SB-2, File No. 333-
               45979).
          3.2  Bylaws (incorporated by reference to Exhibit 3.2 of the
               Registration Statement on Form SB-2, File No. 333-45979).
          4.1  See exhibits 3.1 and 3.2 for provisions of Company's Articles of
               Incorporation and Bylaws defining the rights of shareholders
               (incorporated by reference to Exhibit 4.1 of the Registration
               Statement on Form SB-2, File No. 333-45979).
          4.2  Form of Common Stock Certificate (incorporated by reference to
               Exhibit 4.2 of the Registration Statement on Form SB-2, File No.
               333-45979).
          5.1  Opinion of Nelson Mullins Riley & Scarborough, L.L.P.
               (incorporated by reference to Exhibit 5.1 of the Registration
               Statement on Form SB-2, File No. 333-45979).
          10.1 Employment Agreement dated as of December 12, 1997 between the
               Company and Michael L. McPherson (incorporated by reference to
               Exhibit 10.1 of the Registration Statement on Form SB-2, File No.
               333-45979).
          10.2 Option to Purchase Property (incorporated by reference to Exhibit
               10.2 of the Registration Statement on Form SB-2, File No. 333-
               45979).

                                      -70-
<PAGE>

          10.3 Escrow Agreement between Company and First Tennessee Bank
               (incorporated by reference to Exhibit 10.3 of the Registration
               Statement on Form SB-2, File No. 333-45979).
          10.4 Line of Credit Note (incorporated by reference to Exhibit 10.4 of
               the Registration Statement on Form SB-2, File No. 333-45979).
          10.5 Subscription Agreement (incorporated by reference to Exhibit 10.5
               of the Registration Statement on Form SB-2, File No. 333-45979).
          10.6 Agency Agreement dated February 6, 1998 between the Company and
               Attkisson, Carter & Akers (incorporated by reference to Exhibit
               10.6 of the Registration Statement on Form SB-2, File No. 333-
               45979).
          10.7 Unity Holdings, Inc. Stock Warrant Agreement between Unity
               Holdings, Inc. and Michael L. McPherson dated April 15, 1999,
               that is a sample of the Warrant Agreements issued to all
               directors (incorporated by reference to Exhibit 10.7 to the
               Registrant's Annual Report on Form 10-KSB filed with the
               Commission on March 29, 2000).
          21.  Subsidiaries of the Company (filed as Exhibit 21 to the
               Registrant's Annual Report on Form 10-KSB filed with the
               Commission on March 30, 1999, and incorporated herein by
               reference).
          23.1 Consent of Accountants (incorporated by reference to Exhibit 23.1
               of the Registration Statement on Form SB-2, File No. 333-45979).
          23.2 Consent of Nelson Mullins Riley & Scarborough, L.L.P. (filed
               as part of Exhibit 5.1)
          24.1 Power of Attorney (part of signature page).

(b)  Reports on Form 8-K
     --------------------

     No reports on Form 8-K were filed during the fourth quarter of the year
ended December 31, 2000.

                                      -71-
<PAGE>

                                   SIGNATURES

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

                              UNITY HOLDINGS, INC.


Date: March 22, 2001                By:  /s/ Michael L. McPherson
---------------------                    -------------------------------------
                                         Michael L. McPherson
                                         President and Chief Operating Officer

                                      -72-
<PAGE>

     KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Michael L. McPherson, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments to this Registration Statement, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto attorney-in-fact and agent
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that attorney-in-fact and agent, or his 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 22, 2001.

     Signature                                 Title
     ---------                                 -----

/s/ Kenneth R. Bishop                     Director
----------------------------
Kenneth R. Bishop

/s/ Jerry W. Braden                       Director
----------------------------
Jerry W. Braden

/s/ Michael L. McPherson                  Director, President and
----------------------------              Chief Executive Officer
Michael L. McPherson

/s/ Donald D. George                      Director
----------------------------
Donald D. George

/s/ John S. Lewis                         Director
----------------------------
John S. Lewis

/s/ Sam R. McCleskey                      Director
----------------------------
Sam R. McCleskey

/s/ Stephen A. Taylor                     Director
----------------------------
Stephen A. Taylor

/s/ B. Don Temples                        Director
----------------------------
B. Don Temples

/s/ James D. Timmons                      Chief Financial Officer
----------------------------
James D. Timmons

                                      -73-
<PAGE>

INDEX TO EXHIBITS

Exhibit                                                 Sequential
Number                        Description               Page Number
-------                       -----------               -----------

None

                                      -74-