Exhibit 99(a)

UNITY HOLDINGS,
INC.AND SUBSIDIARY

CONSOLIDATED FINANCIAL REPORT

DECEMBER 31, 2002





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UNITY HOLDINGS, INC.AND SUBSIDIARY

CONSOLIDATED FINANCIAL REPORTDECEMBER 31, 2002

TABLE OF CONTENTS



| |  |  | Page
| |  |  | ----

|                                                |     
|----------------------------------------------- | ----
|INDEPENDENT AUDITORS REPORT                    | 1   
|                                                |     
|FINANCIAL STATEMENTS                            |     
|                                                |     
|Consolidated balance sheets                     | 2   
|Consolidated statements of income               | 3   
|Consolidated statements of comprehensive income | 4   
|Consolidated statements of stockholders equity | 5   
|Consolidated statements of cash flows           | 6   
|Notes to consolidated financial statements      | 7-22





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INDEPENDENT AUDITORS REPORT

To the Board of
DirectorsUnity Holdings, Inc.Cartersville, Georgia

We have audited the accompanying
consolidated balance sheets ofUnity Holdings, Inc. and subsidiaryas of December 31, 2002 and 2001, and the related consolidated statements of income, comprehensive income, 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 auditing standards generally accepted in the United States of America. 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, 2002 and 2001, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.



| |  |  |                           
| |  |  | --------------------------
| |  |  | /s/ MAULDIN & JENKINS, LLC
| |  |  |                           

Atlanta,
GeorgiaFebruary 21, 2003

1



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UNITY HOLDINGS, INC.

AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS



DECEMBER 31, 2002 AND 2001



|Assets                                                                                                                 |  | 2002 |             | 2001 |  
|---------------------------------------------------------------------------------------------------------------------- |  | ---- | ----------- | ---- | -
|                                                                                                                      
|Cash and due from banks                                                                                                |  | $    | 3,574,706   |      | $
|Interest-bearing deposits in banks                                                                                     |  |      | 312,452     |      |  
|Federal funds sold                                                                                                     |  |      | 561,000     |      |  
|Securities available-for-sale                                                                                          |  |      | 12,517,298  |      |  
|Restricted equity securities, at cost                                                                                  |  |      | 607,409     |      |  
|Loans                                                                                                                  |  |      | 107,853,393 |      |  
|Less allowance for loan losses                                                                                         |  |      | 1,470,899   |      |  
|                                                                                                                       |  |      |             |      |  
|Loans, net                                                                                                             |  |      | 106,382,494 |      |  
|Premises and equipment                                                                                                 |  |      | 5,102,152   |      |  
|Other assets                                                                                                           |  |      | 1,880,648   |      |  
|                                                                                                                       |  |      |             |      |  
|Total assets                                                                                                           |  | $    | 130,938,159 |      | $
|                                                                                                                       |  |      |             |      |  
|Liabilities, Redeemable Common Stock and Stockholders' Equity                                                          |  |      |             |      |  
|                                                                                                                      
|Deposits                                                                                                               |  |      |             |      |  
|Noninterest-bearing                                                                                                    |  | $    | 8,541,495   |      | $
|Interest-bearing                                                                                                       |  |      | 109,429,758 |      |  
|                                                                                                                       |  |      |             |      |  
|Total deposits                                                                                                         |  |      | 117,971,253 |      |  
|Other liabilities                                                                                                      |  |      | 957,403     |      |  
|                                                                                                                       |  |      |             |      |  
|Total liabilities                                                                                                      |  |      | 118,928,656 |      |  
|                                                                                                                       |  |      |             |      |  
|Commitments and contingencies                                                                                          |  |      |             |      |  
|Redeemable common stock held by KSOP                                                                                   |  |      | 65,568      |      |  
|                                                                                                                       |  |      |             |      |  
|Stockholders' equity                                                                                                   |  |      |             |      |  
|Preferred stock, par value $.01; 10,000,000 shares authorized; none
issued                                             |  |      |            |      |  
|Common stock, par value $.01; 10,000,000 shares authorized; 1,009,910 and 839,211 issued
and outstanding, respectively |  |      | 10,099      |      |  
|Capital surplus                                                                                                        |  |      | 10,800,267  |      |  
|Retained earnings                                                                                                      |  |      | 1,001,889   |      |  
|Accumulated other comprehensive income (loss)                                                                          |  |      | 131,680     |      |  
|                                                                                                                       |  |      |             |      |  
|Total stockholders' equity                                                                                             |  |      | 11,943,935  |      |  
|                                                                                                                       |  |      |             |      |  
|Total liabilities, redeemable common stock, and stockholders'
equity                                                   |  | $    | 130,938,159 |      | $
|                                                                                                                       |  |      |             |      |  



See Notes to
Consolidated Financial Statements.



4



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UNITY HOLDINGS, INC.

AND SUBSIDIARY



CONSOLIDATED STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31, 2002 AND
2001



|                                                    |  | 2002 |           | 2001
|--------------------------------------------------- |  | ---- | --------- | ----
|Interest income                                     |  |      |           |     
|Loans                                               |  | $    | 7,889,045 |     
|Taxable securities                                  |  |      | 481,009   |     
|Nontaxable securities                               |  |      | 56,838    |     
|Federal funds sold                                  |  |      | 36,061    |     
|Interest-bearing deposits in banks                  |  |      | 4,007     |     
|                                                    |  |      |           |     
|Total interest income                               |  |      | 8,466,960 |     
|                                                    |  |      |           |     
|Interest expense                                    |  |      |           |     
|Deposits                                            |  |      | 3,758,147 |     
|Other borrowings                                    |  |      | 7,621     |     
|                                                    |  |      |           |     
|Total interest expense                              |  |      | 3,765,768 |     
|                                                    |  |      |           |     
|Net interest income                                 |  |      | 4,701,192 |     
|Provision for loan losses                           |  |      | 529,435   |     
|                                                    |  |      |           |     
|Net interest income after provision for loan losses |  |      | 4,171,757 |     
|                                                    |  |      |           |     
|Other income                                        |  |      |           |     
|Service charges on deposit accounts                 |  |      | 477,151   |     
|Mortgage loan fees                                  |  |      | 429,711   |     
|Gain on sale of securities available-for-sale       |  |      | 30,930    |     
|Other operating income                              |  |      | 134,124   |     
|                                                    |  |      |           |     
|Total other income                                  |  |      | 1,071,916 |     
|                                                    |  |      |           |     
|Other expenses                                      |  |      |           |     
|Salaries and employee benefits                      |  |      | 1,964,134 |     
|Equipment and occupancy expenses                    |  |      | 643,051   |     
|Other operating expenses                            |  |      | 1,360,745 |     
|                                                    |  |      |           |     
|Total other expenses                                |  |      | 3,967,930 |     
|                                                    |  |      |           |     
|Income before income taxes                          |  |      | 1,275,743 |     
|Income tax expense                                  |  |      | 442,348   |     
|                                                    |  |      |           |     
|Net income                                          |  | $    | 833,395   |     
|                                                    |  |      |           |     
|Basic earnings per share                            |  | $    | 0.93      |     
|                                                    |  |      |           |     
|Diluted earnings per share                          |  | $    | 0.86      |     
|                                                    |  |      |           |     



See Notes to
Consolidated Financial Statements.



5



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UNITY HOLDINGS, INC.

AND SUBSIDIARY



CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED
DECEMBER 31, 2002 AND 2001



|                                                                                                                         |  | 2002 |         |   | 2001 |  
|------------------------------------------------------------------------------------------------------------------------ |  | ---- | ------- | - | ---- | -
|Net income                                                                                                               |  | $    | 833,395 |   |      | $
|Other comprehensive income (loss):                                                                                       |  |      |         |   |      |  
|Unrealized holding gains (losses) on securities available-for-sale:                                                      |  |      |         |   |      |  
|Unrealized holding gains (losses) on securities arising during period, net of tax of
$81,419 and $(70,293), respectively |  |      | 158,049 |   |      |  
|Reclassification adjustment for gains realized in net income, net of tax of $10,516 and
$5,539, respectively             |  |      | (20,414 | ) |      |  
|                                                                                                                         |  |      |         |   |      |  
|Other comprehensive income (loss)                                                                                        |  |      | 137,635 |   |      |  
|                                                                                                                         |  |      |         |   |      |  
|Comprehensive income                                                                                                     |  | $    | 971,030 |   |      | $
|                                                                                                                         |  |      |         |   |      |  



See Notes to
Consolidated Financial Statements.



6



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UNITY
HOLDINGS, INC.

AND SUBSIDIARY



CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 2002 AND 2001



|                                    |  | Common Stock |  | Capital Surplus |        |  | Retained Earnings (Deficit) |            |   | Accumulated Other Comprehensive Income (Loss) |   |           | Total Stockholders' Equity | 
|----------------------------------- |  | ------------ |  | --------------- | ------ |  | --------------------------- | ---------- | - | --------------------------------------------- | - | --------- | -------------------------- | 
|                                    |  | Shares       |  | Par Value       |        |  |                             |           
|Balance, December 31, 2000          |  | 839,211      |  | $               | 8,392  |  | $                           | 8,076,469  |   |                                               | $ | (342,934  | )                          | 
|Net income                          |  |             |  |                 |       |  |                             |           |   |                                               |   | 576,996   |                            | 
|Other comprehensive loss            |  |             |  |                 |       |  |                             |           |   |                                               |   |          |                            | 
|                                    |  |              |  |                 |        |  |                             |            |   |                                               |   |           |                            | 
|Balance, December 31, 2001          |  | 839,211      |  |                 | 8,392  |  |                             | 8,076,469  |   |                                               |   | 234,062   |                            | 
|Net income                          |  |             |  |                 |       |  |                             |           |   |                                               |   | 833,395   |                            | 
|Issuance of common stock            |  | 170,299      |  |                 | 1,703  |  |                             | 2,723,081  |   |                                               |   |          |                            | 
|Stock offering costs                |  |             |  |                 |       |  |                             | (4,479     | ) |                                               |   |          |                            | 
|Exercise of stock options           |  | 400          |  |                 | 4      |  |                             | 5,196      |   |                                               |   |          |                            | 
|Adjustment for shares owned by KSOP |  |             |  |                 |       |  |                             |           |   |                                               |   | (65,568   | )                          | 
|Other comprehensive income          |  |             |  |                 |       |  |                             |           |   |                                               |   |          |                            | 
|                                    |  |              |  |                 |        |  |                             |            |   |                                               |   |           |                            | 
|Balance, December 31, 2002          |  | 1,009,910    |  | $               | 10,099 |  | $                           | 10,800,267 |   |                                               | $ | 1,001,889 |                            | 
|                                    |  |              |  |                 |        |  |                             |            |   |                                               |   |           |                            | 



See Notes to Consolidated Financial Statements.



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UNITY
HOLDINGS, INC.

AND SUBSIDIARY



CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2002 AND 2001



|                                                                                  |  | 2002 |             |   | 2001 |  
|--------------------------------------------------------------------------------- |  | ---- | ----------- | - | ---- | -
|OPERATING ACTIVITIES                                                              |  |      |             |   |      |  
|Net income                                                                        |  | $    | 833,395     |   |      | $
|Adjustments to reconcile net income to net cash provided by operating
activities: |  |      |             |   |      |  
|Depreciation                                                                      |  |      | 321,898     |   |      |  
|Deferred taxes                                                                    |  |      | (73,126     | ) |      |  
|Provision for loan losses                                                         |  |      | 529,435     |   |      |  
|Gain on sale of securities available-for-sale                                     |  |      | (30,930     | ) |      |  
|Gain on sale of premises and equipment                                            |  |      | (72,691     | ) |      |  
|(Increase) decrease in interest receivable                                        |  |      | 12,610      |   |      |  
|Increase (decrease) in interest payable                                           |  |      | (183,356    | ) |      |  
|Net other operating activities                                                    |  |      | 74,151      |   |      |  
|                                                                                  |  |      |             |   |      |  
|Net cash provided by operating activities                                         |  |      | 1,411,386   |   |      |  
|                                                                                  |  |      |             |   |      |  
|INVESTING ACTIVITIES                                                              |  |      |             |   |      |  
|Net (increase) decrease in interest-bearing deposits in banks                     |  |      | (249,369    | ) |      |  
|Purchases of securities available-for-sale                                        |  |      | (13,528,701 | ) |      |  
|Proceeds from maturities of securities available-for-sale                         |  |      | 10,668,696  |   |      |  
|Proceeds from sales of securities available-for-sale                              |  |      | 2,570,781   |   |      |  
|Purchases of restricted equity securities                                         |  |      | (109,200    | ) |      |  
|Net decrease in federal funds sold                                                |  |      | 2,041,000   |   |      |  
|Net increase in loans                                                             |  |      | (19,934,877 | ) |      |  
|Purchase of premises and equipment                                                |  |      | (149,762    | ) |      |  
|Proceeds from sale of premises and equipment                                      |  |      | 28,367      |   |      |  
|                                                                                  |  |      |             |   |      |  
|Net cash used in investing activities                                             |  |      | (18,663,065 | ) |      |  
|                                                                                  |  |      |             |   |      |  
|FINANCING ACTIVITIES                                                              |  |      |             |   |      |  
|Net increase in deposits                                                          |  |      | 15,679,520  |   |      |  
|Proceeds from sale of common stock                                                |  |      | 2,724,784   |   |      |  
|Stock offering costs                                                              |  |      | (4,479      | ) |      |  
|Proceeds from exercise of stock options                                           |  |      | 5,200       |   |      |  
|                                                                                  |  |      |             |   |      |  
|Net cash provided by financing activities                                         |  |      | 18,405,025  |   |      |  
|                                                                                  |  |      |             |   |      |  
|Net increase in cash and due from banks                                           |  |      | 1,153,346   |   |      |  
|Cash and due from banks at beginning of year                                      |  |      | 2,421,360   |   |      |  
|                                                                                  |  |      |             |   |      |  
|Cash and due from banks at end of year                                            |  | $    | 3,574,706   |   |      | $
|                                                                                  |  |      |             |   |      |  
|SUPPLEMENTAL DISCLOSURES                                                          |  |      |             |   |      |  
|Cash paid for:                                                                    |  |      |             |   |      |  
|Interest                                                                          |  | $    | 3,949,124   |   |      | $
|Income taxes                                                                      |  | $    | 362,184     |   |      | $
|NONCASH TRANSACTIONS                                                              |  |      |             |   |      |  
|Financed sale of premises and equipment                                           |  | $    | 114,394     |   |      | $
|Loans transferred to other real estate owned                                      |  | $    | 13,000      |   |      | $



See Notes to Consolidated Financial Statements.



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UNITY HOLDINGS, INC.AND SUBSIDIARYNOTES 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 branches in Adairsville, Bartow County, Georgia and Rome, Floyd County, 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 and Accounting Estimates

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

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent 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 Bank is required to maintain reserve balances in cash or on deposit with the Federal Reserve Bank, based on a percentage of deposits. The total of
those reserve balances was approximately $418,000 at December 31, 2002.

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. Debt securities not classified as held-to-maturity 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 net of the related deferred tax effect. Equity securities, including restricted stock,
without a readily determinable fair value are recorded at cost.

Purchase premiums and discounts are recognized in interest income using the interest method
over the terms of the securities. 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

9



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earnings as realized losses.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loans

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

Nonrefundable loan fees and certain direct loan origination costs are deferred
and recognized in income over the life of the loans, using a method which approximates a level yield.

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

The allowance for loan losses is established through a provision for loan losses charged to expense. Loan losses 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. While management uses the best information available to make its evaluation, future adjustments to the allowance may be necessary if there are significant changes in economic conditions. 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 by either the present value of expected future cash flows discounted at the loans effective interest rate, the loans
obtainable 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 to sell.

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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 $13,000 and $0 of other real estate owned at December 31, 2002 and 2001, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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

At December 31, 2002, the Company has two stock-based employee compensation plans, which are described more fully in Note 6. The Company accounts for those plans under the recognition and measurement principles of APB Opinion No. 25,Accounting for Stock Issued to Employees, and related Interpretations. No stock-based employee compensation cost is reflected in net income, as all options granted under those plans had an exercise
price equal to the market value of the underlying stock on the date of grant. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123,Accounting for Stock-Based Compensation, to stock-based employee compensation.



|                                                                                                                                            |  | Years Ended December 31, |        
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------ | -------
|                                                                                                                                            |  |                          |        
|                                                                                                                                            |  | 2002                     |        
|                                                                                                                                            |  |                          |        
|Net income, as reported                                                                                                                     |  | $                        | 833,395
|Deduct: Total stock-based employee compensation expense determined under fair value based method for
all awards, net of related tax effects |  | (36,923                  | )      
|                                                                                                                                            |  |                          |        
|Pro forma net income                                                                                                                        |  | $                        | 796,472
|                                                                                                                                            |  |                          |        
|Earnings per share:                                                                                                                         |  |                          |        
|Basic - as reported                                                                                                                         |  | $                        | 0.93   
|                                                                                                                                            |  |                          |        
|Basic - pro forma                                                                                                                           |  | $                        | 0.89   
|                                                                                                                                            |  |                          |        
|Diluted - as reported                                                                                                                       |  | $                        | 0.86   
|                                                                                                                                            |  |                          |        
|Diluted - pro forma                                                                                                                         |  | $                        | 0.82   
|                                                                                                                                            |  |                          |        

Earnings Per Share

Basic earnings per share are computed by dividing net income by the weighted average number of shares of common stock outstanding. Diluted earnings per share are computed by
dividing net income 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

13



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equity section of the balance sheet, such items, along with net income, are components of comprehensive income.

14



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Accounting Standards

In December 2002, the FASB issued SFAS No. 148,Accounting for Stock-Based Compensation-Transition and Disclosure. SFAS No. 148 amends SFAS No. 123,Accounting for Stock-Based Compensation, to provide alternative
methods of transition for an entity that voluntarily changes to the fair value based method of accounting for stock-based employee compensation. It also amends the disclosure provisions of SFAS No. 123 to require prominent disclosure about the
effects on reported net income of an entitys accounting policy decisions with respect to stock-based employee compensation. The Company has not elected to adopt the recognition provisions of this Statement for stock-based employee compensation
and has elected to continue with accounting methodology in Opinion No. 25 as permitted by SFAS No. 123.

NOTE 2.SECURITIES AVAILABLE-FOR-SALE

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



|                                       |  | AmortizedCost |            | GrossUnrealizedGains |   | GrossUnrealizedLosses |   | FairValue |        
|-------------------------------------- |  | ------------- | ---------- | -------------------- | - | --------------------- | - | --------- | -------
|                                       |  |               |            |                      |   |                       |   |           |        
|Securities Available-for-Sale          |  |               |            |                      |   |                       |   |           |        
|December 31, 2002:                     |  |               |            |                      |   |                       |   |           |        
|U. S. Government and agency securities |  | $             | 7,087,202  |                      | $ | 141,621               |   | $         | (3,079 
|Municipal securities                   |  | 1,887,748     |            | 31,941               |   | (712                  | ) | 1,918,977 |        
|Mortgage-backed securities             |  | 3,342,833     |            | 32,254               |   | (2,510                | ) | 3,372,577 |        
|                                       |  |               |            |                      |   |                       |   |           |        
|                                       |  | $             | 12,317,783 |                      | $ | 205,816               |   | $         | (6,301 
|                                       |  |               |            |                      |   |                       |   |           |        
|December 31, 2001:                     |  |               |            |                      |   |                       |   |           |        
|U. S. Government and agency securities |  | $             | 8,706,653  |                      | $ | 39,544                |   | $         | (34,360
|Municipal securities                   |  | 873,536       |            | -                    |   | (32,302               | ) | 841,234   |        
|Mortgage-backed securities             |  | 2,417,440     |            | 18,856               |   | (761                  | ) | 2,435,535 |        
|                                       |  |               |            |                      |   |                       |   |           |        
|                                       |  | $             | 11,997,629 |                      | $ | 58,400                |   | $         | (67,423
|                                       |  |               |            |                      |   |                       |   |           |        

Securities with a carrying value of $155,543 and $0
at December 31, 2002 and 2001, respectively, were pledged to secure public deposits and for other purposes required or permitted by law.

Gross gains of
$30,930 and $16,292 were realized on sales of securities available-for-sale for the years ended December 31, 2002 and 2001.

15



---

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, 2002 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 |           
|-------------------------- |  | ----------------------------- | ----------
|                           |  |                               |           
|                           |  | AmortizedCost                 |           
|                           |  |                               |           
|                           |  |                               |           
|Due from one to five years |  | $                             | 3,846,123 
|Due from five to ten years |  | 2,826,598                     |           
|Due after ten years        |  | 2,302,229                     |           
|Mortgage-backed securities |  | 3,342,833                     |           
|                           |  |                               |           
|                           |  | $                             | 12,317,783
|                           |  |                               |           

NOTE 3.LOANS

The composition of loans is summarized as follows:



|                                       |  | December 31, |            
|-------------------------------------- |  | ------------ | -----------
|                                       |  |              |            
|                                       |  | 2002         |            
|                                       |  |              |            
|                                       |  |              |            
|Commercial, financial and agricultural |  | $            | 10,914,000 
|Real estate  construction             |  | 15,957,000   |            
|Real estate  mortgage                 |  | 72,704,000   |            
|Consumer, installment and other        |  | 8,493,343    |            
|                                       |  |              |            
|                                       |  | 108,068,343  |            
|Unearned income                        |  | (214,950     | )          
|Allowance for loan losses              |  | (1,470,899   | )          
|                                       |  |              |            
|Loans, net                             |  | $            | 106,382,494
|                                       |  |              |            

Changes in the allowance for loan losses are as
follows:



|                                           |  | Years Ended December 31, |          
|------------------------------------------ |  | ------------------------ | ---------
|                                           |  |                          |          
|                                           |  | 2002                     |          
|                                           |  |                          |          
|                                           |  |                          |          
|Balance, beginning of year                 |  | $                        | 1,195,775
|Provision for loan losses                  |  | 529,435                  |          
|Loans charged off                          |  | (272,225                 | )        
|Recoveries of loans previously charged off |  | 17,914                   |          
|                                           |  |                          |          
|Balance, end of year                       |  | $                        | 1,470,899
|                                           |  |                          |          

16



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3.LOANS (Continued)

The total recorded investment in impaired loans, consisting solely of loans on nonaccrual status, was $1,008,415 and $69,134 at December 31, 2002 and 2001, 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, 2002 and 2001. The average recorded investment in impaired loans for 2002 and 2001 was
$286,379 and $76,019, respectively. Interest income recognized on impaired loans for cash payments received was not material for the years ended December 31, 2002 and 2001.

Loans past due ninety days or more and still accruing interest was $180,000 and $37,000 at December 31, 2002 and 2001, respectively.

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, 2002 are as follows:



|Balance, beginning of year |  | $        | 1,431,107 | 
|-------------------------- |  | -------- | --------- | 
|Advances                   |  | 532,317  |          
|Repayments                 |  | (713,382 | )        
|                           |  |          |          
|Balance, end of year       |  | $        | 1,250,042 | 
|                           |  |          |           | 

NOTE 4.PREMISES AND EQUIPMENT

Premises and equipment are summarized as
follows:



|                         |  | December 31, |          
|------------------------ |  | ------------ | ---------
|                         |  |              |          
|                         |  | 2002         |          
|                         |  |              |          
|                         |  |              |          
|Land                     |  | $            | 1,480,671
|Buildings                |  | 2,968,172    |          
|Leasehold improvements   |  | 60,920       |          
|Equipment                |  | 1,452,927    |          
|                         |  |              |          
|                         |  | 5,962,690    |          
|Accumulated depreciation |  | (860,538     | )        
|                         |  |              |          
|                         |  | $            | 5,102,152
|                         |  |              |          

The Company is currently operating out of leased
modular facilities for its Rome branch on a month-to-month basis. Total rental expense incurred for the lease of this facility for the years ended December 31, 2002 and 2001 was $48,605 and $19,080, respectively.

17



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5.DEPOSITS

The
aggregate amount of time deposits in denominations of $100,000 or more at December 31, 2002 and 2001 as $41,418,185 and $41,157,087, respectively. The Company had brokered certificates of deposit at December 31, 2002 and 2001 of $29,069,197 and
$24,001,797, respectively. The scheduled maturities of time deposits at December 31, 2002 are as follows:



|2003       |  | $          | 45,334,654 | 
|---------- |  | ---------- | ---------- | 
|2004       |  | 20,799,944 |           
|2005       |  | 4,143,461  |           
|2006       |  | 2,428,614  |           
|2007       |  | 3,406,965  |           
|Thereafter |  | 69,693     |           
|           |  |            |           
|           |  | $          | 76,183,331 | 
|           |  |            |            | 

NOTE 6.STOCK COMPENSATION PLANS

The Company has an incentive stock option plan and
has reserved 174,776 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, |       
|-------------------------------------------------------------- |  | ------------------------ | ------
|                                                               |  |                          |       
|                                                               |  | 2002                     |       
|                                                               |  |                          |       
|                                                               |  | Number                   |       
|                                                               |  |                          |       
|                                                               |  |                          |       
|Under option, beginning of year                                |  |                          | 60,960
|Granted                                                        |  | 32,000                   |       
|Exercised                                                      |  | (400                     | )     
|Terminated                                                     |  | (2,600                   | )     
|                                                               |  |                          |       
|Under option, end of year                                      |  | 89,960                   |       
|                                                               |  |                          |       
|                                                               |  |                          |       
|Exercisable, end of year                                       |  | 41,968                   |       
|                                                               |  |                          |       
|                                                               |  |                          |       
|Weighted-average fair value of options granted during the year |  | $                        | 5.08  
|                                                               |  |                          |       

18



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6.STOCK COMPENSATION PLANS (Continued)

Information pertaining to options outstanding at December 31, 2002 is as follows:



|                        |  | Options Outstanding |        | Options Exercisable                      | 
|----------------------- |  | ------------------- | ------ | ---------------------------------------- | 
|                        |  |                     |        |                                          | 
|Range ofExercise Prices |  | NumberOutstanding   |        | Weighted-AverageRemainingContractualLife | 
|                        |  |                     |        |                                          | 
|$10 - $15               |  |                     | 57,960 |                                          | 
|$16                     |  |                     | 32,000 |                                          | 

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 are fully vested. The warrants expire ten years from date of grant and have a weighted average remaining contractual life of six years.

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, |  
|----------------------- |  | ------------------------ | -
|                        |  |                          |  
|                        |  | 2002                     |  
|                        |  |                          |  
|Dividend yield          |  | 0                        | %
|Expected life           |  | 10 years                 |  
|Expected volatility     |  | 0.01                     | %
|Risk-free interest rate |  | 3.86                     | %

NOTE 7.OTHER EMPLOYEE AND DIRECTOR BENEFIT PLANS

Employee Stock Ownership
Plan

In 2002, the Company established a leveraged Employee Stock Ownership Plan with 401-k provisions (KSOP) for the benefit of employees who meet certain
eligibility requirements, subject to IRS limits. Contributions to the KSOP are determined by the Board of Directors of the Company taking in to consideration the financial condition and fiscal requirements of the Company and such other factors as
the Board of Directors may deem pertinent and applicable under the circumstances. The Company made no contributions to the KSOP for the year ended December 31, 2002. The KSOP also has no debt as of December 31, 2002. The KSOP owned 4,098 shares of
the Companys common stock as of December 31, 2002, which were purchased solely from employee contributions to the KSOP.

19



---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7.OTHER EMPLOYEE AND DIRECTOR BENEFIT PLANS
(Continued)

Employee Stock Ownership Plan (Continued)

In accordance with the KSOP, the Company is expected to honor the rights of certain participants to diversify their account balances or to liquidate their ownership of the common stock in the event of termination. The purchase price of the
common stock would be based on the fair market value of the Companys common stock as of the annual valuation date, which precedes the date the put option is exercised. No participant has exercised these rights since the inception of the KSOP,
and no significant cash outlay is expected during 2003. However, since the redemption of common stock is outside the control of the Company, the Companys maximum cash obligation based on the approximate market prices of common stock as of the
reporting date has been presented outside stockholders equity. The amount presented as redeemable common stock held by the KSOP in the consolidated balance sheet represents the Companys maximum cash obligation and has been reflected as a
reduction of retained earnings.

Director Deferred Compensation Plan

In 2002, the Company established a deferred compensation plan providing for death and retirement benefits for its directors. The estimated amounts to be paid under the compensation plan are being funded through the
purchase of life insurance policies on the directors. The balance of the director policy surrender values included in other assets at December 31, 2002 amounted to $63,500. Expense recognized on these director policies amounted to $6,500 for the
year ended December 31, 2002. The balance of deferred compensation included in other liabilities at December 31, 2002 amounted to $20,896. Expense recognized for deferred compensation amounted to $20,896 for the year ended December 31,
2002.

NOTE 8.INCOME
TAXES

Income tax expense consists of the following:



|                              |  | Years Ended December 31, |        
|----------------------------- |  | ------------------------ | -------
|                              |  |                          |        
|                              |  | 2002                     |        
|                              |  |                          |        
|Current                       |  | $                        | 515,474
|Deferred                      |  | (73,126                  | )      
|Change in valuation allowance |  |                         |        
|                              |  |                          |        
|Income tax expense            |  | $                        | 442,348
|                              |  |                          |        

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, |        
|------------------------------ |  | ------------------------ | -------
|                               |  |                          |        
|                               |  | 2002                     |        
|                               |  |                          |        
|Income taxes at statutory rate |  | $                        | 433,753
|Tax-free interest              |  |                          | (16,530

20



---



|State tax expense (benefit)   |  | 20,083 |         | (34,836  | )
|----------------------------- |  | ------ | ------- | -------- | -
|Change in valuation allowance |  |       |         | (113,232 | )
|Other items                   |  | 5,042  |         | 6,861    |  
|                              |  |        |         |          |  
|Income tax expense            |  | $      | 442,348 |          | $
|                              |  |        |         |          |  

21



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8.INCOME TAXES (Continued)

The components of deferred income taxes are as follows:



|                                       |  | December 31, |        
|-------------------------------------- |  | ------------ | -------
|                                       |  |              |        
|                                       |  | 2002         |        
|                                       |  |              |        
|Deferred tax assets:                   |  |              |        
|Loan loss reserves                     |  | $            | 463,146
|Preopening and organizational expenses |  | 36,605       |        
|Loan fees                              |  | 88,006       |        
|Deferred compensation                  |  | 7,885        |        
|Securities available-for-sale          |  |             |        
|                                       |  |              |        
|                                       |  | 595,642      |        
|                                       |  |              |        
|Deferred tax liabilities:              |  |              |        
|Depreciation                           |  | 79,903       |        
|Securities available-for-sale          |  | 67,835       |        
|                                       |  |              |        
|                                       |  | 147,738      |        
|                                       |  |              |        
|Net deferred tax assets                |  | $            | 447,904
|                                       |  |              |        

NOTE 9.EARNINGS PER SHARE

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



|                                                                                                                                |  | Years Ended December 31, |        
|------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------ | -------
|                                                                                                                                |  |                          |        
|                                                                                                                                |  | 2002                     |        
|                                                                                                                                |  |                          |        
|Basic Earnings Per Share:                                                                                                       |  |                          |        
|Weighted average common shares outstanding                                                                                      |  | 896,086                  |        
|Net income                                                                                                                      |  | $                        | 833,395
|                                                                                                                                |  |                          |        
|Basic earnings per share                                                                                                        |  | $                        | 0.93   
|                                                                                                                                |  |                          |        
|                                                                                                                                |  |                          |        
|Diluted Earnings Per Share:                                                                                                     |  |                          |        
|Weighted average common shares outstanding                                                                                      |  | 896,086                  |        
|Net effect of the assumed exercise of stock options based on the treasury
stock method using average market prices for the year |  | 72,976                   |        
|                                                                                                                                |  |                          |        
|Total weighted average common shares and common stock equivalents outstanding                                                   |  | 969,062                  |        
|                                                                                                                                |  |                          |        
|                                                                                                                                |  |                          |        
|Net income                                                                                                                      |  | $                        | 833,395
|                                                                                                                                |  |                          |        
|Diluted earnings per share                                                                                                      |  | $                        | 0.86   
|                                                                                                                                |  |                          |        

22



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10.COMMITMENTS AND CONTINGENCIES

Loan Commitments

The Company is a 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. Such commitments 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, |           
|---------------------------- |  | ------------ | ----------
|                             |  |              |           
|                             |  | 2002         |           
|                             |  |              |           
|Commitments to extend credit |  | $            | 12,545,000
|Letters of credit            |  | 190,000      |           
|                             |  |              |           
|                             |  | $            | 12,735,000
|                             |  |              |           

Commitments to extend credit are agreements to lend
to a customer as long as there is no violation of any condition established in the contract. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash
requirements.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those
letters of credit are primarily issued to support public and private borrowing arrangements. 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.

Contingencies

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 11.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.

Eighty-two 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

23



---

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 $1,966,000.

24



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12.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, 2002, dividends of $1,171,000 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. 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.

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, as
defined, and of Tier I capital to average assets, as defined. Management believes, as of December 31, 2002 and 2001, the Company and the Bank met all capital adequacy requirements to which they are subject.

As of December 31, 2002, 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:



|                                        |  | Actual                 |        | For CapitalAdequacyPurposes |       | To Be WellCapitalized UnderPrompt
CorrectiveAction Provisions |  
|--------------------------------------- |  | ---------------------- | ------ | --------------------------- | ----- | ------------------------------------------------------------- | -
|                                        |  |                        |        |                             |       |                                                               |  
|                                        |  | Amount                 |        | Ratio                       |       | Amount                                                        |  
|                                        |  |                        |        |                             |       |                                                               |  
|                                        |  | (Dollars in Thousands) |       
|December 31, 2002:                      |  |                        |        |                             |       |                                                               |  
|Total Capital to Risk Weighted Assets:  |  |                        |        |                             |       |                                                               |  
|Consolidated                            |  | $                      | 13,183 |                             | 12.65 | %                                                             | $
|Bank                                    |  | $                      | 13,107 |                             | 12.58 | %                                                             | $
|Tier I Capital to Risk Weighted Assets: |  |                        |        |                             |       |                                                               |  
|Consolidated                            |  | $                      | 11,878 |                             | 11.39 | %                                                             | $
|Bank                                    |  | $                      | 11,802 |                             | 11.32 | %                                                             | $
|Tier I Capital to Average Assets:       |  |                        |        |                             |       |                                                               |  
|Consolidated                            |  | $                      | 11,878 |                             | 9.05  | %                                                             | $

|Bank |  | $ | 11,802 |  | 8.99 | % | $ | 5,251 |  | 4 | % | $ | 6,564 |  | 5 | %
|---- |  | - | ------ |  | ---- | - | - | ----- |  | - | - | - | ----- |  | - | -

25



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12.REGULATORY MATTERS (Continued)



|                                        |  | Actual                 |       | For CapitalAdequacyPurposes |       | To Be WellCapitalized UnderPrompt
CorrectiveAction Provisions |  
|--------------------------------------- |  | ---------------------- | ----- | --------------------------- | ----- | ------------------------------------------------------------- | -
|                                        |  |                        |       |                             |       |                                                               |  
|                                        |  | Amount                 |       | Ratio                       |       | Amount                                                        |  
|                                        |  |                        |       |                             |       |                                                               |  
|                                        |  | (Dollars in Thousands) |      
|December 31, 2001:                      |  |                        |       |                             |       |                                                               |  
|Total Capital to Risk Weighted Assets:  |  |                        |       |                             |       |                                                               |  
|Consolidated                            |  | $                      | 9,376 |                             | 11.10 | %                                                             | $
|Bank                                    |  | $                      | 9,319 |                             | 11.03 | %                                                             | $
|Tier I Capital to Risk Weighted Assets: |  |                        |       |                             |       |                                                               |  
|Consolidated                            |  | $                      | 8,319 |                             | 9.85  | %                                                             | $
|Bank                                    |  | $                      | 8,262 |                             | 9.78  | %                                                             | $
|Tier I Capital to Average Assets:       |  |                        |       |                             |       |                                                               |  
|Consolidated                            |  | $                      | 8,319 |                             | 7.60  | %                                                             | $
|Bank                                    |  | $                      | 8,262 |                             | 7.55  | %                                                             | $

NOTE 13.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

26



---

terms to borrowers with similar credit quality. Fair values for impaired loans are estimated using discounted cash flow analyses or
underlying collateral values, where applicable.

27



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13.FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

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.

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:



|                                                                                 |  | December 31, 2002 |           | December 31, 2001 |  
|-------------------------------------------------------------------------------- |  | ----------------- | --------- | ----------------- | -
|                                                                                 |  |                   |           |                   |  
|                                                                                 |  | CarryingAmount    |           | FairValue         |  
|                                                                                 |  |                   |           |                   |  
|                                                                                 |  |                   |           |                   |  
|Financial assets:                                                                |  |                   |           |                   |  
|                                                                                 |  |                   |           |                   |  
|Cash, due from banks, interest-bearing deposits in banks, and federal funds sold |  | $                 | 4,448,158 |                   | $
|Securities available-for-sale                                                    |  | 12,517,298        |           | 12,517,298        |  
|Restricted equity securities                                                     |  | 607,409           |           | 607,409           |  
|Loans                                                                            |  | 106,382,494       |           | 107,729,719       |  
|Accrued interest receivable                                                      |  | 569,603           |           | 569,603           |  
|                                                                                 |  |                   |           |                   |  
|Financial liabilities:                                                           |  |                   |           |                   |  
|Deposits                                                                         |  | 117,971,253       |           | 119,771,996       |  
|Accrued interest payable                                                         |  |                   | 465,878   |                   |  

NOTE 14.SUPPLEMENTAL FINANCIAL DATA

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



|                |  | Years Ended December 31, |        
|--------------- |  | ------------------------ | -------
|                |  |                          |        
|                |  | 2002                     |        
|                |  |                          |        
|Data processing |  | $                        | 267,714
|Office supplies |  | 108,175                  |        
|Advertising     |  |                          | 119,108

28



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15.PARENT COMPANY FINANCIAL INFORMATION

The following information presents the condensed balance sheets, statements of income, and cash flows of Unity Holdings, Inc. as of and for the years ended December 31, 2002 and 2001:

CONDENSED BALANCE SHEETS



|                                                       |  | 2002       |            | 2001      |  
|------------------------------------------------------ |  | ---------- | ---------- | --------- | -
|                                                       |  |            |            |           |  
|                                                       |  |            |            |           |  
|Assets                                                 |  |            |            |           |  
|Cash                                                   |  | $          | 54,507     |           | $
|Investment in subsidiary                               |  | 11,933,660 |            | 8,256,027 |  
|Other assets                                           |  | 21,336     |            | 29,412    |  
|                                                       |  |            |            |           |  
|                                                       |  |            |            |           |  
|Total assets                                           |  | $          | 12,009,503 |           | $
|                                                       |  |            |            |           |  
|                                                       |  |            |            |           |  
|Redeemable common stock held by KSOP                   |  | $          | 65,568     |           | $
|Stockholders equity                                   |  | 11,943,935 |            | 8,312,968 |  
|                                                       |  |            |            |           |  
|                                                       |  |            |            |           |  
|Total redeemable common stock and stockholders equity |  | $          | 12,009,503 |           | $
|                                                       |  |            |            |           |  

CONDENSED STATEMENTS OF INCOME



|                                                                                 |  | 2002    |         | 2001    |  
|-------------------------------------------------------------------------------- |  | ------- | ------- | ------- | -
|                                                                                 |  |         |         |         |  
|Expenses, other                                                                  |  | $       | 10,604  |         | $
|                                                                                 |  |         |         |         |  
|                                                                                 |  |         |         |         |  
|Loss before income tax benefits and equity in undistributed income of subsidiary |  | (10,604 | )       | (8,034  | )
|                                                                                 |  |         |         |         |  
|Income tax benefits                                                              |  | (4,001  | )       | (44,785 | )
|                                                                                 |  |         |         |         |  
|                                                                                 |  |         |         |         |  
|Income (loss) before equity in undistributed income of subsidiary                |  | (6,603  | )       | 36,751  |  
|                                                                                 |  |         |         |         |  
|Equity in undistributed income of subsidiary                                     |  | 839,998 |         | 540,245 |  
|                                                                                 |  |         |         |         |  
|                                                                                 |  |         |         |         |  
|Net income                                                                       |  | $       | 833,395 |         | $
|                                                                                 |  |         |         |         |  

29



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15.PARENT COMPANY FINANCIAL INFORMATION (Continued)

CONDENSED STATEMENTS OF CASH FLOWS



|                                                                                  |  | 2002       |         | 2001     |  
|--------------------------------------------------------------------------------- |  | ---------- | ------- | -------- | -
|                                                                                  |  |            |         |          |  
|                                                                                  |  |            |         |          |  
|OPERATING ACTIVITIES                                                              |  |            |         |          |  
|Net income                                                                        |  | $          | 833,395 |          | $
|Adjustments to reconcile net income to net cash provided by operating
activities: |  |            |         |          |  
|Equity in undistributed income of subsidiary                                      |  | (839,998   | )       | (540,245 | )
|Net other operating activities                                                    |  | 8,076      |         | (29,412  | )
|                                                                                  |  |            |         |          |  
|Net cash provided by operating activities                                         |  | 1,473      |         | 7,339    |  
|                                                                                  |  |            |         |          |  
|                                                                                  |  |            |         |          |  
|INVESTING ACTIVITIES                                                              |  |            |         |          |  
|Investment in subsidiary                                                          |  | (2,700,000 | )       |         |  
|                                                                                  |  |            |         |          |  
|Net cash used in investing activities                                             |  | (2,700,000 | )       |         |  
|                                                                                  |  |            |         |          |  
|                                                                                  |  |            |         |          |  
|FINANCING ACTIVITIES                                                              |  |            |         |          |  
|Proceeds from sale of common stock, net                                           |  | 2,270,305  |         |         |  
|Proceeds from exercise of stock options                                           |  | 5,200      |         |         |  
|                                                                                  |  |            |         |          |  
|Net cash provided by in financing activities                                      |  | 2,725,505  |         |         |  
|                                                                                  |  |            |         |          |  
|                                                                                  |  |            |         |          |  
|Net increase in cash                                                              |  | 26,978     |         | 7,339    |  
|                                                                                  |  |            |         |          |  
|Cash at beginning of year                                                         |  | 27,529     |         | 20,190   |  
|                                                                                  |  |            |         |          |  
|                                                                                  |  |            |         |          |  
|Cash at end of year                                                               |  | $          | 54,507  |          | $
|                                                                                  |  |            |         |          |  

30