UNITED STATES

SECURITIES AND EXCHANGECOMMISSION

Washington, D.C. 20549

Form 10-K

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| [X]                                          | Annual  Report under Section 13 or 15(d) of the Securities Exchange Act of 1934                  |
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| for the fiscal year  ended December 31, 2008 |
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|                                              | Commission File No.  000-25851                                                                   |
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|                                              | UNITY HOLDINGS, INC                                                                              |
|                                              | (Name of Small  Business Issuer in Its Charter)                                                  |
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|                                              | Georgia                                                                                          |  |  | 58-2350609 |
|                                              | (State  or Other Jurisdiction of Incorporation or Organization)                                  |  |  | (I.R.S.  Employer Identification No.) |
|                                              |                                                                                                  |  |  |  |
|                                              | 950    Joe Frank Harris Pkwy, S.E.                                                               |  |  | 30121 |
|                                              | Cartersville, Georgia                                                                            |  |  | (Zip Code) |
|                                              | (Address of Principal  Executive Offices)                                                        |  |  |  |
|                                              |  (770) 606-0555                                                                             |
|                                              | Issuer's Telephone  Number, Including Area Code                                                  |
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|                                              | Securities  registered pursuant to Section 12(b) of the Act:  None.                         |
|                                              | Securities  registered pursuant to Section 12(g) of the Act:  Common Stock, $.01 par  value |
|                                              | Name  of exchange on which registered:  None                                                |  |
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Indicateby check mark whether the registrant is a well-known seasoned issuer as definedin Rule 405 of the Securities Act.  Yes            No   X  

Indicateby check mark if the registrant is not required to file reports pursuant toSection 13 or Section 15(d) of the Act.  Yes           No   X  

Indicateby check mark whether the registrant:  (1) has filed all reports required to befiled by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements for past 90days.  Yes   X     No         

Indicateby check mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-K is not contained herein and will not be contained, to the bestof registrant's knowledge, in definitive proxy or information statementsincorporated by reference in Part III of this Form 10-K or any amendment tothis Form 10-K.   [ X ]

Indicateby check mark whether the registrant is a large accelerated filer, anaccelerated filer, a non-accelerated filer or a smaller reporting company.  Seedefinitions of "large accelerated filer," "accelerated filer," and "smallerreporting company," in Rule 12b‐2 of the Exchange Act.  (Check one): 

| Large  accelerated filer   |   |  | Accelerated  filer                             |  |
|----------------------------|---|--|------------------------------------------------|--|
| Smaller  reporting company | X |  | Non-accelerated  filer                         |  |
|                            |   |  | (Do  not check if a smaller reporting company) |

Indicateby check mark whether the registrant is a shell company (as defined in Rule 12b‐2of the Act of 1934).  Yes           No   X  

Statethe aggregate market value of the voting stock held by non-affiliates computedby reference to the price at which the stock was sold, or the average bid andasked prices of such stock, as of June 30, 2008:  $20,659,626 (based on thestock price of $26.00 as of that date).

Indicatethe number of shares outstanding of each of the issuer's classes of commonstock, as of the latest practicable date: 1,148,513 shares of $.01 par valuecommon stock as of March 31, 2009.

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DOCUMENTS INCORPORATEDBY REFERENCE

Portionsof the information required by Part III of this Annual Report are incorporatedby reference from the Registrant's definitive Proxy Statement to be filed withthe Securities and Exchange Commission pursuant to Regulation 14A not laterthan 120 days after the end of the fiscal year covered by this AnnualReport.

| **Table of Contents** |
|-----------------------|
|                       |  |  | **Page Number** |
| PART I                |  |  |  |
|                       |  |  |  |
|                       |  | Forward Looking Statement Disclosure |  |
|                       |  |  |  |
|                       | Item 1. | Business | 3 |
|                       | Item 1A. | N/A | -- |
|                       | Item 1B. | N/A | -- |
|                       | Item 2. | Properties | 19 |
|                       | Item 3. | Legal Proceedings | 19 |
|                       | Item 4. | Submission of Matters to a Vote of Security  Holders | 20 |
|                       |  |  |  |
| PART II               |  |  |  |
|                       |  |  |  |
|                       | Item 5. | Market for Registrant's Common Equity, Related  Stockholder Matters and Issuer Purchases of Equity Securities | 20 |
|                       | Item 6. | N/A | -- |
|                       | Item 7. | Management's Discussion and Analysis of  Financial Condition and Results of Operations | 21 |
|                       | Item 7A. | N/A | -- |
|                       | Item 8. | Financial Statements | 21 |
|                       | Item 9. | Changes in and Disagreements with Accountants  on Accounting and Financial Disclosures | 21 |
|                       | Item 9A. | Controls and Procedures | 22 |
|                       | Item 9B. | Other Information | 22 |
|                       |  |  |  |
| PART III              |  |  |  |
|                       |  |  |  |
|                       | Item 10. | Directors, Executive Officers and Corporate  Governance | 23 |
|                       | Item 11. | Executive Compensation | 23 |
|                       | Item 12. | Security Ownership of Certain Beneficial  Owners and Management and Related Stockholder Matters | 23 |
|                       | Item 13. | Certain Relationships and Related Transactions  and Director Independence | 23 |
|                       | Item 14. | Principal Accounting Fees and Services | 23 |
|                       |  |  |  |
| PART IV               |  |  |  |
|                       |  |  |  |
|                       | Item 15. | Exhibits, Financial Statement Schedules | 24 |
|                       |  |  |  |
|                       | Signatures | 25 |
|                       |  |  |  |
|                       | Index to Exhibits | 28 |

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**Item 1.  Business****.**

**General**

UnityHoldings, Inc. was incorporated in Georgia on October 8, 1997 as a bank holdingcompany to own and control all of the capital stock of Unity National Bank. Organizing activities for the Company began during the summer of 1997, consistingprimarily of preparation and filing of a registration statement for sale of theCompany'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 fordeposit insurance, and on February 11, 1998, the Office of the Comptroller ofthe Currency approved the Bank's charter application.  The Board of Governorsof the Federal Reserve approved the Company to be a bank holding company onNovember 30, 1998.  The Bank has two locations in Cartersville and locations inAdairsville, Calhoun, and Rome, Georgia.

**MarketingFocus**

Mostof the banks in our trade area are now local branches of large regional banks.Although size gives the larger banks certain advantages in competing forbusiness from large corporations, including higher lending limits and theability to offer services in other areas of Georgia and the Bartow and FloydCounties area, the Company believes opportunities exist in the small businessand consumer arenas.  The Bank advertises to emphasize the Company's localownership, community bank nature, and ability to provide more personalizedservice than its competition. 

**Deposits**

TheBank offers a full range of deposit services that are typically available inmost banks and savings and loan associations, including checking accounts,commercial accounts, NOW accounts, savings accounts, and other time deposits ofvarious types, ranging from daily money market accounts to longer-termcertificates of deposit.  The transaction accounts and time certificates aretailored to the Bank's principal market area at rates competitive to thoseoffered in the Bartow County area.  In addition, the Bank offers certainretirement account services, such as Individual Retirement Accounts (IRAs). The Bank solicits these accounts from individuals, businesses, associations andorganizations, and governmental authorities. 

** **

**LendingActivities**

*General.*  The Bank emphasizes a range of lendingservices, including real estate, commercial and consumer loans, to individualsand small-to-medium-sized businesses and professional concerns that are locatedin or conduct a substantial portion of their business in the Bank's marketarea. 

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*RealEstate Loans.*  One ofthe primary components of the Bank's loan portfolio is loans secured by firstor second mortgages on real estate.  These loans generally consist ofcommercial real estate loans, construction and development loans, andresidential real estate loans (but exclude home equity loans, which areclassified as consumer loans).  Loan terms generally are limited to five yearsor 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 thecase of shorter term loans.  The Bank will generally charge an originationfee.  Management attempts to reduce credit risk in the commercial real estateportfolio by emphasizing loans on owner-occupied office and retail buildingswhere the loan-to-value ratio, established by independent appraisals, does notexceed 80%.  In addition, the Bank will typically require personal guaranteesof the principal owners of the property backed with a review by the Bank of thepersonal financial statements of the principal owners.  The principal economicrisk associated with each category of anticipated loans, including real estateloans, is the creditworthiness of the Bank's borrowers.  The risks associatedwith real estate loans vary with many economic factors, including employmentlevels and fluctuations in the value of real estate.  The Bank competes forreal estate loans with a number of bank competitors which are well establishedin the Bartow and Floyd Counties area.  Most of these competitors havesubstantially 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 and acts as a party in loanparticipations.   The Bank intends to limit interest rate risk and credit riskon these loans by locking the interest rate for each loan with the secondaryinvestor and receiving the investor's underwriting approval prior tooriginating the loan. 

*CommercialLoans. *The Bank makesloans for commercial purposes in various lines of businesses.  Equipment loansare 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 financedequipment and with a loan-to-value ratio of 80% or less.  Working capital loanstypically have terms not exceeding one year and usually are secured by accountsreceivable, inventory, or personal guarantees of the principals of the business. For loans secured by accounts receivable or inventory, principal will typicallybe repaid as the assets securing the loan are converted into cash, and in othercases principal will typically be due at maturity.  The principal economic riskassociated with each category of anticipated loans, including commercial loans,is the creditworthiness of the Bank's borrowers.  The risks associated withcommercial loans vary with many economic factors, including the economy in the marketareas.  The well-established banks will make proportionately more loans tomedium- to large-sized businesses than the Bank.  Many of the Bank'santicipated commercial loans will likely be made to small- to medium-sizedbusinesses which may be less able to withstand competitive, economic, andfinancial conditions than larger borrowers. Commercial loans are generallyconsidered to have greater risk than first or second mortgages on real estate. 

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*ConsumerLoans.* The Bank makes avariety of loans to individuals for personal and household purposes, includingsecured and unsecured installment and term loans, home equity loans and linesof credit, and revolving lines of credit such as credit cards.  These loanstypically carry balances of less than $25,000 and, in the case of non-revolvingloans, are amortized over a period not exceeding 60 months or are ninety-dayterm loans, in each case bearing interest at a fixed rate. The revolving loanstypically bear interest at a fixed rate and require monthly payments ofinterest and a portion of the principal balance.  The underwriting criteria forhome equity loans and lines of credit generally is the same as applied by theBank when making a first mortgage loan, as described above, and home equitylines of credit typically expire ten years or less after origination.  As withthe other categories of loans, the principal economic risk associated withconsumer loans is the creditworthiness of the Bank's borrowers, and theprincipal competitors for consumer loans are the established banks in the marketarea.  Consumer loans are generally considered to have greater risk than firstor second mortgages on real estate. 

*LoanApproval and Review.* TheBank's loan approval policies provide for various levels of officer lendingauthority.  When the amount of aggregate loans to a single borrower exceedsthat individual officer's lending authority, the loan request is considered andapproved by an officer with a higher lending limit or the loan committee.  TheBank will not make any loans to any director, officer, or employee of the Bankunless the loan is approved by the board of directors of the Bank and is madeon terms not more favorable to such person than would be available to a personnot affiliated with the Bank.  The Bank currently intends to adhere to FederalNational Mortgage Association ("FNMA") and Federal Home Loan MortgageCorporation ("FHLMC") guidelines in its mortgage loan review process, but maychoose to alter this policy in the future.  The Bank does not currently sellits mortgage loans on the secondary market, but may choose to do so in thefuture. 

*LendingLimits.* The Bank'slending activities are subject to a variety of lending limits imposed byfederal law.  While differing limits apply in certain circumstances based onthe type of loan or the nature of the borrower (including the borrower'srelationship to the Bank), in general the Bank is subject to aloan-to-one-borrower limit.  These limits will increase or decrease as theBank's capital increases or decreases.  Unless the Bank is able to sellparticipations in its loans to other financial institutions, the Bank will notbe able to meet all of the lending needs of loan customers requiring aggregateextensions of credit above these limits. 

**OtherBanking Services**

Otherbank services include remote deposit capture, cash management services, safedeposit boxes, travelers checks, direct deposit of payroll and social securitychecks, and automatic drafts for various accounts.  The Bank is associated witha shared network of automated teller machines that may be used by Bankcustomers throughout Georgia and other regions.  The Bank also offersMasterCard and VISA credit card services through a correspondent bank as anagent for the Bank.  The bank has a well designed website that allows sometransactional activity and bill payment services.  The Bank does not plan toexercise trust powers. 

**Competition**

Thebanking business is highly competitive.  The Bank competes as a financialintermediary with other commercial banks, savings and loan associations, creditunions and money market mutual funds operating in our trade areas.  There arecurrently 19 banking institutions (excluding credit unions) operating 68offices in the combined Bartow\Floyd\Gordon county market.  These institutionshold approximately $3.5 billion in deposits; the Bank currently holds the 6thlargest position in the market for these deposits.  A number of thesecompetitors are well established.  Several de novo branches and new banks have alsobeen established in the market due to its attractiveness.  Most of them havesubstantially greater resources and lending limits and may have a lower cost offunds than the Bank.  These banks offer certain services, such as extensive andestablished branch networks and trust services, which the Bank does notcurrently provide.  As a result of these competitive factors, the Bank may haveto pay higher rates of interest in order to attract deposits. 

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**Employees**

Asof December 31, 2008, the Bank had 83 full-time employees and 5 part-time employees.

**SUPERVISION AND REGULATION**

TheCompany and the Bank are subject to state and federal banking laws andregulations which impose specific requirements or restrictions on, and providefor general regulatory oversight with respect to, virtually all aspects ofoperations.  These laws and regulations are generally intended to protectdepositors, not shareholders.  To the extent that the following summarydescribes statutory or regulatory provisions, it is qualified in its entiretyby reference to the particular statutory and regulatory provisions.  Any changein applicable laws or regulations may have a material effect on the businessand prospects of the Company.  Beginning with the enactment of the FinancialInstitutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA") andfollowing with the Federal Deposit Insurance Corporation Improvement Act of1991 ("FDICIA"), numerous additional regulatory requirements have been placedon the banking industry in the past five years, and additional changes havebeen proposed.  The banking industry is also likely to change significantly asa result of the passage of the Riegle-Neal Interstate Banking and BranchingEfficiency Act of 1994 (the "Interstate Banking Act").  The operations of theCompany and the Bank may be affected by legislative changes and the policies ofvarious regulatory authorities.  The Company is unable to predict the nature orthe extent of the effect on its business and earnings that fiscal or monetarypolicies, economic control or new federal or state legislation may have in thefuture. 

** **

**The Company**

Becauseit owns the outstanding common stock of the Bank, the Company is a bank holdingcompany 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 theFederal Reserve and is required to file periodic reports of its operations andsuch additional information as the Federal Reserve may require.  The Company'sand the Bank's activities are limited to banking, managing or controllingbanks, furnishing services to or performing services for its subsidiaries orengaging in any other activity that the Federal Reserve determines to be soclosely related to banking or managing or controlling banks as to be a properincident thereto. 

*Investments,Control and Activities.* Withcertain limited exceptions, the BHCA requires every bank holding company toobtain the prior approval of the Federal Reserve before (i) acquiringsubstantially all the assets of any bank, (ii) acquiring direct or indirectownership or control of any voting shares of any bank if after such acquisitionit would own or control more than 5% of the voting shares of such bank (unlessit already owns or controls the majority of such shares), or (iii) merging orconsolidating with another bank holding company. 

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Inaddition, and subject to certain exceptions, the BHCA and the Change in BankControl Act, together with regulations thereunder, require Federal Reserveapproval (or, depending on the circumstances, no notice of disapproval) priorto any person or company acquiring "control" of a bank holding company, such asthe Company.  Control is conclusively presumed to exist if an individual orcompany acquires 25% or more of any class of voting securities of the bankholding company.  Control is rebuttably presumed to exist if a person acquires10% or more but less than 25% of any class of voting securities and either theCompany has registered securities under Section 12 of the Exchange Act or noother person will own a greater percentage of that class of voting securitiesimmediately after the transaction.  The regulations provide a procedure forchallenge of the rebuttable control presumption. 

Underthe BHCA, the Company is generally prohibited from engaging in, or acquiringdirect or indirect control of more than 5% of the voting shares of any companyengaged in, nonbanking activities, unless the Federal Reserve, by order orregulation, has found those activities to be so closely related to banking ormanaging or controlling banks as to be a proper incident thereto.  Some of theactivities that the Federal Reserve has determined by regulation to be properincidents to the business of banking include making or servicing loans andcertain types of leases, engaging in certain insurance and discount brokerageactivities, performing certain data processing services, acting in certaincircumstances as a fiduciary or investment or financial advisor, owning savingsassociations and making investments in certain corporations or projectsdesigned primarily to promote community welfare. 

*Sourceof Strength; Cross-Guarantee.* Inaccordance with Federal Reserve policy, the Company is expected to act as asource of financial strength to the Bank and to commit resources to support theBank in circumstances in which the Company might not otherwise do so.  Underthe BHCA, the Federal Reserve may require a bank holding company to terminateany activity or relinquish control of a nonbank subsidiary (other than a nonbanksubsidiary of a bank) upon the Federal Reserve's determination that suchactivity or control constitutes a serious risk to the financial soundness orstability of any subsidiary depository institution of the bank holdingcompany.  Further, federal bank regulatory authorities have additionaldiscretion to require a bank holding company to divest itself of any bank ornonbank subsidiary if the agency determines that divestiture may aid thedepository institution's financial condition.  The Bank may be required toindemnify, or cross-guarantee, the FDIC against losses it incurs with respectto any other bank controlled by the Company, which in effect makes theCompany's equity investments in healthy bank subsidiaries available to the FDICto assist any failing or failed bank subsidiary of the Company. 

**OCCFormal Agreement**

OnFebruary 3, 2009, the Company and the Bank executed a written agreement withthe Office of the Comptroller of the Currency ("OCC").  The Company and itsBoard of Directors have taken an active role in working with the OCC to improvethe condition of the Company and the Bank.  

TheAgreement is based on the findings of the OCC during a 2008 on-siteexamination.  Since the completion of the examination, the Board of Directorshas aggressively taken steps to address the findings of the exam and theCompany has plans to raise new capital to improve its overall capital positionand ensure sufficient capital for the Bank.  The Company and the Bank areaggressively working to comply with the requirements of the Agreement.

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Under the terms of the Agreement, the Company and the Bank are required,within 60 days of entering into the Agreement, to submit written plans to theregulators that address the following items: eliminating the basis of criticismof criticized assets; continuing to improve commercial real estateconcentration risk management; on-going review and grading of the Bank's loanportfolio; improving the Bank's position regarding classified loans and otherreal estate owned; revising the Bank's allowance for loan and lease lossespolicy; maintaining sufficient liquidity at the Bank; and preparing a financialforecast and strategic plan for a three-year period designed to improve thecondition of the Bank. 

The Board of Directors of the Bank is also required to appoint a ComplianceCommittee to submit, on a quarterly basis, a report setting forth a descriptionof the action needed to achieve full compliance with the formal agreement,actions taken to comply, and the results and status of these actions.

**TheBank**

*General.*  The Bank operates as a national bankingassociation incorporated under the laws of the United States and is subject toexamination by the Office of the Comptroller of the Currency (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, subjectto aggregation rules). The OCC and the FDIC regulate or monitor all areas ofthe Bank's operations, including security devices and procedures, adequacy ofcapitalization and loss reserves, loans, investments, borrowings, deposits,mergers, issuances of securities, payment of dividends, interest rates payableon deposits, interest rates or fees chargeable on loans, establishment ofbranches, corporate reorganizations, maintenance of books and records andadequacy of staff training to carry on safe lending and deposit gatheringpractices.  The OCC requires the Bank to maintain certain capital ratios andimposes limitations on the Bank's aggregate investment in real estate, bankpremises and furniture and fixtures.  The Bank is currently required by the OCCto prepare quarterly reports on the Bank's financial condition and to conductan annual audit of its financial affairs in compliance with minimum standardsand procedures prescribed by the OCC. 

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

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*Transactionswith Affiliates and Insiders.* TheBank is subject to Section 23A of the Federal Reserve Act, which places limitson the amount of loans or extensions of credit to, or investments in, orcertain other transactions with, affiliates and on the amount of advances tothird parties collateralized by the securities or obligations of affiliates. In addition, most of these loans and certain other transactions must be securedin prescribed amounts.  The Bank is also subject to Section 23B of the FederalReserve Act which, among other things, prohibits an institution from engagingin certain transactions with certain affiliates unless the transactions are onterms substantially the same, or at least as favorable to such institution or itssubsidiaries, as those prevailing at the time for comparable transactions withnon-affiliated companies.  The Bank is subject to certain restrictions onextensions of credit to executive officers, directors, certain principalshareholders and their related interests.  Such extensions of credit (i) mustbe made on substantially the same terms, including interest rates andcollateral, as those prevailing at the time for comparable transactions withthird parties and (ii) must not involve more than the normal risk of repaymentor present other unfavorable features. 

*CommunityReinvestment Act.*  TheCommunity Reinvestment Act requires that each insured depository institutionshall be evaluated by its primary federal regulator with respect to its recordin meeting the credit needs of its local community, including low and moderateincome neighborhoods, consistent with the safe and sound operation of thoseinstitutions.  These factors are also considered in evaluating mergers,acquisitions and applications to open a branch or facility.

**TheGramm-Leach-Bliley Act of 1999**

TheGramm-Leach-Bliley Act (the "GLB Act") dramatically increases the ability ofeligible banking organizations to affiliate with insurance, securities, andother financial firms and insured depository institutions.  The GLB Act permitseligible banking organizations to engage in activities and to affiliate withnonbank firms engaged in activities that are financial in nature or incidentalto such financial activities, and also includes some additional activities thatare complementary to such financial activities.  

Thedefinition of activities that are financial in nature is handled by the GLB Actin two ways.  First, there is a laundry list of activities that are designatedas financial in nature.  Second, the authorization of new activities asfinancial in nature or incidental to a financial activity requires aconsultative process between the Federal Reserve Board and the Secretary of theTreasury with each having the authority to veto proposals of the other.  TheFederal Reserve Board has the discretion to determine what activities arecomplementary to financial activities.

Theprecise scope of the authority to engage in these new financial activities,however, depends on the type of banking organization, whether it is a holdingcompany, 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 Actauthorizes two types of banking organizations to engage in expanded securitiesactivities.  The GLB Act authorizes a new type of bank holding company called afinancial holding company to have a subsidiary company that engages in securitiesunderwriting and dealing without limitation as to the types of securitiesinvolved.  The GLB Act also permits a national bank to control a financialsubsidiary that can engage in many of the expanded securities activitiespermitted for financial holding companies.  However, additional restrictionsapply to national bank financial subsidiaries.  

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

TheGLB Act also amends the Bank Holding Company Act to prescribe eligibilitycriteria for financial holding companies, defines the scope of activitiespermitted for bank holding companies that do not become financial holdingcompanies, and establishes consequences for financial holding companies thatcease to maintain the status needed to qualify as a financial holding company. 

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

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

TheGLB Act retains the basic structure of the Bank Holding Company Act.  Thus, abank holding company that is not eligible for the expanded powers of a financialholding company is now subject to the amended Section 4(c)(8) of the BankHolding Company Act which freezes the activities that are authorized anddefined as closely related to banking activities.  Under this Section, a bankholding company is not eligible for the expanded activities permitted under newSection 4(k) and is limited to those specific activities previously approved bythe Federal Reserve Board.  

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TheGLB Act also addresses the consequences when a financial holding company thathas exercised the expanded authority fails to maintain its eligibility to be afinancial holding company.  The Federal Reserve Board may impose suchlimitations on the conduct or activities of a noncompliant financial holdingcompany or any affiliate of that company as the Board determines to beappropriate under the circumstances and consistent with the purposes of theAct.  

TheGLB Act is essentially a dramatic liberalization of the restrictions placed onbanks, especially bank holding companies, regarding the areas of financialbusinesses in which they are allowed to compete.

*OtherRegulations.*  Interestand certain other charges collected or contracted for by the Bank are subjectto state usury laws and certain federal laws concerning interest rates.  The Bank'sloan operations are also subject to certain federal laws applicable to credittransactions, such as the federal Truth-In-Lending Act governing disclosures ofcredit terms to consumer borrowers, the Home Mortgage Disclosure Act of 1975requiring financial institutions to provide information to enable the publicand public officials to determine whether a financial institution is fulfillingits obligation to help meet the housing needs of the community it serves, theEqual Credit Opportunity Act prohibiting discrimination on the basis of race,creed or other prohibited factors in extending credit, the Fair CreditReporting Act of 1978 governing the use and provision of information to creditreporting agencies, the Fair Debt Collection Act governing the manner in whichconsumer debts may be collected by collection agencies, and the rules andregulations of the various federal agencies charged with the responsibility ofimplementing such federal laws.  The deposit operations of the Bank also aresubject to the Right to Financial Privacy Act, which imposes a duty to maintainconfidentiality of consumer financial records and prescribes procedures forcomplying with administrative subpoenas of financial records, and theElectronic Funds Transfer Act and Regulation E issued by the Federal ReserveBoard to implement that act, which governs automatic deposits to andwithdrawals from deposit accounts and customers' rights and liabilities arisingfrom the use of automated teller machines and other electronic banking services.

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**DepositInsurance**

The FDIC is an independent federal agencythat insures deposits, up to prescribed statutory limits, of federally insuredbanks and savings institutions and safeguards the safety and soundness of thebanking and savings industries. The FDIC insures our customer deposits throughthe Deposit Insurance Fund ("DIF") up to prescribed limits for eachdepositor. Pursuant to the EESA, the maximum deposit insurance amount has beenincreased from $100,000 to $250,000. The amount of FDIC assessments paid byeach DIF member institution is based on its relative risk of default asmeasured by regulatory capital ratios and other supervisory factors. Pursuantto the Federal Deposit Insurance Reform Act of 2005, the FDIC is authorized toset the reserve ratio for the DIF annually at between 1.15% and 1.50% ofestimated insured deposits. The FDIC may increase or decrease the assessmentrate schedule on a semi-annual basis. In an effort to restore capitalizationlevels and to ensure the DIF will adequately cover projected losses from futurebank failures, the FDIC, in October 2008, proposed a rule to alter the way inwhich it differentiates for risk in the risk-based assessment system and torevise deposit insurance assessment rates, including base assessment rates.First quarter 2009 assessment rates were increased to between 12 and 50 centsfor every $100 of domestic deposits, with most banks paying between 12 and 14cents. 

On February 27, 2009, the FDIC approvedan interim rule to institute a one-time special assessment of 20 cents per $100in domestic deposits to restore the DIF reserves depleted by recent bankfailures. The interim rule additionally reserves the right of the FDIC tocharge an additional up-to-10 basis point special premium at a later point ifthe DIF reserves continue to fall. The FDIC also approved an increase inregular premium rates for the second quarter of 2009. For most banks, this willbe between 12 to 16 basis points per $100 in domestic deposits. Premiums forthe rest of 2009 have not yet been set. 

Additionally, by participating in the TLGP,banks temporarily become subject to "systemic risk specialassessments" of 10 basis points for transaction account balances in excessof $250,000 assessments up to 100 basis points of the amount of TLGP debtissued. Further, all FDIC-insured institutions are required to pay assessmentsto the FDIC to fund interest payments on bonds issued by the FinancingCorporation ("FICO"), an agency of the Federal government establishedto recapitalize the predecessor to the DIF. The FICO assessment rates, whichare determined quarterly, averaged 0.0113% of insured deposits in fiscal 2008.These assessments will continue until the FICO bonds mature in 2017. 

TheFDIC may terminate a depository institution's deposit insurance upon a findingthat the institution's financial condition is unsafe or unsound or that theinstitution has engaged in unsafe or unsound practices that pose a risk to theDIF or that may prejudice the interest of the bank's depositors. Thetermination of deposit insurance for a bank would also result in the revocationof the bank's charter by the DIF.

** **

**Dividends**

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Theprincipal source of the Company's cash revenues comes from dividends andinterest income on its investments.  In addition, the Company may receive cashrevenues from dividends paid by the Bank.  The amount of dividends that may bepaid by the Bank to the Company depends on the Bank's earnings and capitalposition and is limited by federal and state law, regulations and policies.  Inaddition, the Board of Governors has stated that bank holding companies shouldrefrain from or limit dividend increases or reduce or eliminate dividends undercircumstances in which the bank holding company fails to meet minimum capital requirementsor in which its earnings are impaired.

Asa national bank, the Bank may not pay dividends from its paid-in-capital.  Alldividends must be paid out of undivided profits then on hand, after deductingexpenses, including reserves for losses and bad debts.  In addition, a nationalbank is prohibited from declaring a dividend on its shares of common stockuntil its surplus equals its stated capital, unless there has been transferredto surplus no less than one-tenth of the bank's net profits of the precedingtwo consecutive half-year periods (in the case of an annual dividend).  Theapproval of the OCC is required if the total of all dividends declared by anational bank in any calendar year exceeds the total of its net profits forthat 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 adividend if, after paying the dividend, the Bank would be undercapitalized. See "Capital Regulations" below. 

Inaddition to the availability of funds from the Bank, the future dividend policyof the Company is subject to the discretion of the Board of Directors and willdepend upon a number of factors, including future earnings, financialcondition, cash needs and general business conditions. If dividends should bedeclared in the future, the amount of such dividends presently cannot beestimated and it cannot be known whether such dividends would continue forfuture periods.  Due to the Bank's current condition and pursuant to the formalagreement, the Bank is prohibited from paying dividends without prior consentof the OCC.

** **

**CapitalRegulations**

Thefederal bank regulatory authorities have adopted risk-based capital guidelinesfor banks and bank holding companies that are designed to make regulatorycapital requirements more sensitive to differences in risk profile among banksand bank holding companies, account for off-balance sheet exposure and minimizedisincentives for holding liquid assets.  The resulting capital ratiosrepresent qualifying capital as a percentage of total risk-weighted assets andoff-balance sheet items.  The guidelines are minimums, and the federalregulators have noted that banks and bank holding companies contemplatingsignificant expansion programs should not allow expansion to diminish theircapital ratios and should maintain ratios well in excess of the minimums.  Thecurrent guidelines require all bank holding companies and federally-regulatedbanks to maintain a minimum risk-based total capital ratio equal to 8%, ofwhich at least 4% must be Tier 1 capital.  Tier 1 capital includes commonshareholders' equity, qualifying perpetual preferred stock and minorityinterests in equity accounts of consolidated subsidiaries, but excludesgoodwill and most other intangibles and excludes the allowance for loan andlease losses.  Tier 2 capital includes the excess of any preferred stock notincluded in Tier 1 capital, mandatory convertible securities, hybrid capitalinstruments, subordinated debt and intermediate term-preferred stock andgeneral reserves for loan and lease losses up to 1.25% of risk-weighted assets.

13

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Underthe guidelines, banks' and bank holding companies' assets are givenrisk-weights of 0%, 20%, 50% and 100%.  In addition, certain off-balance sheetitems are given credit conversion factors to convert them to asset equivalentamounts to which an appropriate risk-weight will apply. These computationsresult in the total risk-weighted assets.  Most loans are assigned to the 100%risk category, except for first mortgage loans fully secured by residentialproperty and, under certain circumstances, residential construction loans, bothof which carry a 50% rating.  Most investment securities are assigned to the20% category, except for municipal or state revenue bonds, which have a 50%rating, and direct obligations of or obligations guaranteed by the UnitedStates Treasury or United States Government agencies, which have a 0% rating. 

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

FDICIAestablished a new capital-based regulatory scheme designed to promote earlyintervention for troubled banks and requires the FDIC to choose the leastexpensive resolution of bank failures.  The new capital-based regulatoryframework contains five categories of compliance with regulatory capitalrequirements, including "well capitalized," "adequately capitalized,""undercapitalized," "significantly undercapitalized," and "criticallyundercapitalized."  To qualify as a "well capitalized" institution, a bank musthave a leverage ratio of no less than 5%, a Tier 1 risk-based ratio of no lessthan 6%, and a total risk-based capital ratio of no less than 10%, and the bankmust not be under any order or directive from the appropriate regulatory agencyto meet and maintain a specific capital level.  The Company and the Bank areboth currently qualified as "well capitalized."  For a more detailed analysisof the Company and Bank's regulatory requirements,  including capital ratiosfor the current and previous year,  see "Regulatory Matters" in the Notes toConsolidated Financial Statements.

Underthe FDICIA regulations, the applicable agency can treat an institution as if itwere in the next lower category if the agency determines (after notice and anopportunity for hearing) that the institution is in an unsafe or unsoundcondition or is engaging in an unsafe or unsound practice.  The degree ofregulatory scrutiny of a financial institution will increase, and thepermissible activities of the institution will decrease, as it moves downwardthrough the capital categories.  Institutions that fall into one of the threeundercapitalized categories may be required to (i) submit a capital restorationplan; (ii) raise additional capital; (iii) restrict their growth, deposit interestrates and other activities; (iv) improve their management; (v) eliminatemanagement fees; or (vi) divest themselves of all or part of their operations. Bank holding companies controlling financial institutions can be called upon toboost the institutions' capital and to partially guarantee the institutions'performance under their capital restoration plans. 

14

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Thesecapital guidelines can affect the Company in several ways.  If the Bank beginsto grow at a rapid pace, a premature "squeeze" on capital could occur making acapital infusion necessary. The requirements could impact the Company's abilityto pay dividends.  The Company's capital levels are currently more thanadequate; however, rapid growth, poor loan portfolio performance or poor earningsperformance or a combination of these factors could change the Bank's capitalposition in a relatively short period of time. 

**InterstateBanking And Branching Restrictions**

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

Inaddition, beginning June 1, 1997, the Interstate Banking Act has permittednational and state banks to establish de novo branches in another state ifthere is a law in that state which applies equally to all banks and expresslypermits 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 branchbanks anywhere in Georgia and, beginning July 1, 1998, a bank may establish newor additional branch banks anywhere in the state with prior regulatory approval.

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**Anti-TerrorismLegislation**

** **

In the wake ofthe tragic events of September 11th, on October 26, 2001 , the President signedthe Uniting and Strengthening America by Providing Appropriate Tools Requiredto Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001. Under the USAPATRIOT Act, financial institutions are subject to prohibitions againstspecified financial transactions and account relationships as well as enhanceddue diligence and "know your customer" standards in their dealings with foreignfinancial institutions and foreign customers. For example, the enhanced duediligence policies, procedures, and controls generally require financialinstitutions to take reasonable steps:

| - | to conduct  enhanced scrutiny of account relationships to guard against money laundering  and report any suspicious transaction;                                                                               |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| - | to ascertain  the identity of the nominal and beneficial owners of, and the source of funds  deposited into, each account as needed to guard against money laundering and  report any suspicious transactions; |
| - | to ascertain  for any foreign bank, the shares of which are not publicly traded, the  identity of the owners of the foreign bank, and the nature and extent of the  ownership interest of each such owner; and |
| - | to ascertain  whether any foreign bank provides correspondent accounts to other foreign  banks and, if so, the identity of those foreign banks and related due  diligence information.                         |

The USA PATRIOTAct requires financial institutions to establish anti-money launderingprograms. The USA PATRIOT Act sets forth minimum standards for these programs,including:

| - | the  development of internal policies, procedures, and controls; |
|---|------------------------------------------------------------------|
| - | the  designation of a compliance officer;                        |
| - | an ongoing  employee training program; and                       |
| - | an independent  audit function to test the programs.             |

In addition, theUSA PATRIOT Act authorizes the Secretary of the Treasury to adopt rulesincreasing the cooperation and information sharing between financialinstitutions, regulators, and law enforcement authorities regardingindividuals, entities and organizations engaged in, or reasonably suspectedbased on credible evidence of engaging in, terrorist acts or money launderingactivities. Any financial institution complying with the se rules will not bedeemed to have violated the privacy provisions of the Gramm-Leach-Bliley Act,as discussed above.

16

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**Sarbanes-Oxley Act of 2002**

The Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley")was enacted to increase corporate responsibility, provide for enhancedpenalties for accounting and auditing improprieties at publicly tradedcompanies, and protect investors by improving the accuracy and reliability ofdisclosures pursuant to the securities laws. Sarbanes-Oxley includes importantnew requirements for public companies in the areas of financial disclosure,corporate governance, and the independence, composition and responsibilities ofaudit committees. Among other things*,* Sarbanes-Oxley mandates chiefexecutive and chief financial officer certifications of periodic financialreports, additional financial disclosures concerning off-balance sheet items,and speedier transaction reporting requirements for executive officers,directors and 10% shareholders. In addition, penalties for non-compliance withthe Exchange Act were heightened. SEC rules promulgated pursuant toSarbanes-Oxley impose obligations and restrictions on auditors and auditcommittees intended to enhance their independence from management, and includeextensive additional disclosure, corporate governance and other related rules.Sarbanes-Oxley represents significant federal involvement in matterstraditionally left to state regulatory systems, such as the regulation of theaccounting profession, and to state corporate law, such as the relationshipbetween a Board of Directors and Management and between a Board of Directorsand its committees. 

We have not experienced anysignificant difficulties in complying with Sarbanes-Oxley. However, we haveincurred, and expect to continue to incur, significant costs in connection withcompliance with Section 404 of Sarbanes-Oxley, which requires Managementto undertake an assessment of the adequacy and effectiveness of our internalcontrols over financial reporting and requires our auditors to attest to, andreport on, Management's assessment and the operating effectiveness of thesecontrols. 

**CommercialReal Estate and Lending Concentrations**

OnJanuary 10, 2006, the federal bank regulatory agencies released proposedguidance on "Concentration in Commercial Real Estate Lending" (the "Guidance"). This proposal defines commercial real estate ("CRE") loans as exposures securedby raw land, land development and construction (including 1-4 familyresidential construction), multi-family property, and non-farm nonresidentialproperty where the primary or a significant source of repayment is derived fromrental income associated with the property (that is, loans for which 50% ormore of the source of repayment comes from third party, non-affiliated, rentalincome) or the proceeds of the sale, refinancing, or permanent financing of theproperty. Loans to REITs and unsecured loans to developers that closelycorrelate to the inherent risks in CRE markets would also be considered CREloans under the Guidance.  Loans on owner occupied CRE are generally excludedfrom the Guidance. 

TheGuidance is triggered where either:

Totalreported loans for construction, land development, and other land represent100% or more of the bank's total capital; or

17

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Totalreported loans secured by multifamily and nonfarm nonresidential properties andloans for construction, land development, and other land represent 300% or moreof the bank's total capital.

Therequirements of the Guidance may also be triggered where the bank has had asharp increase in CRE lending or has significant concentrations of CRE securedby a particular property type. Banks that are subject to the Guidance'striggers will need to implement enhanced strategic planning, CRE underwritingpolicies, risk management and internal controls, portfolio stress testing, riskexposure limits, and other policies, including management compensation andincentives, to address the CRE risks. Higher allowances for loan losses andcapital levels may also be appropriate.

TheCompany believes that the Guidance is applicable to it, as its loanconcentrations satisfy the criteria listed above.  The Company and its Board ofDirectors have discussed the proposed guidance and believe that the Company'sunderwriting policy, management information systems, independent creditadministration process and monthly monitoring of real estate loanconcentrations will be sufficient to address the proposed guidance.

Fromtime to time, various bills are introduced in the United States Congress and atthe state legislative level with respect to the regulation of financialinstitutions.  Certain of these proposals, if adopted, could significantlychange the regulation of banks and the financial services industry.  TheCompany cannot predict whether any of these proposals will be adopted or, ifadopted, how these proposals would affect the Company. 

**Allowance for Loan and LeaseLosses**

On December 13, 2006, thefederal bank regulatory agencies released *Interagency Policy Statement onthe Allowance for Loan and Lease Losses* ("ALLL"), which revises andreplaces the banking agencies' 1993 policy statement on the ALLL. The revisedstatement was issued to ensure consistency with generally accepted accountingprinciples (GAAP) and more recent supervisory guidance. The revised statementextends the applicability of the policy to credit unions. Additionally, theagencies issued 16 FAQs to assist institutions in complying with both GAAP andALLL supervisory guidance. 

Highlights of the revised statement include thefollowing: 

| The revised statement emphasizes that the ALLL represents one of the most  significant estimates in an institution's financial statements and regulatory  reports and that an assessment of the appropriateness of the ALLL is critical  to an institution's safety and soundness. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

18

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| Each institution has a responsibility to develop, maintain, and document a  comprehensive, systematic, and consistently applied process for determining  the amounts of the ALLL. An institution must maintain an ALLL that is  sufficient to cover estimated credit losses on individual impaired loans as  well as estimated credit losses inherent in the remainder of the portfolio. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| The revised statement updates the previous guidance on the following  issues regarding ALLL: (1) responsibilities of the board of directors,  management, and bank examiners; (2) factors to be considered in the  estimation of ALLL; and (3) objectives and elements of an effective loan  review system. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

The Company and its board ofdirectors have discussed the revised statement and believe that the Company'sALLL methodology is comprehensive, systematic, and that it is consistentlyapplied across the Company. The Company believes its management informationsystems, independent credit administration process, policies and procedures aresufficient to address the guidance. 

**U.S.****Treasury's Troubled Asset Relief ProgramCapital Purchase Program**

On October 3, 2008, the Emergency EconomicStabilization Act of 2008 ("EESA") was enacted that provides the U.S. Secretaryof the Treasury with broad authority to implement certain actions to helprestore stability and liquidity to U.S. markets. One of the provisionsresulting from the legislation is the Troubled Asset Relief Program CapitalPurchase Program ("CPP"), which provides direct equity investment in perpetualpreferred stock by the U.S. Treasury Department in qualified financialinstitutions. The program is voluntary and requires an institution to complywith a number of restrictions and provisions, including limits on executivecompensation, stock redemptions and declaration of dividends. The CPP providesfor a minimum investment of one percent of total risk-weighted assets and amaximum investment equal to the lesser of three percent of total risk-weightedassets or $25 billion. Participation in the program is not automatic and issubject to approval by the U.S. Treasury Department. The Company has applied toparticipate in the CPP but has not received a response to date. 

**Temporary Liquidity Guarantee Program******

On October 14, 2008, the FDIC announced a newprogram - the Temporary Liquidity Guarantee Program. This program has twocomponents - The Debt Guarantee Program and the Transaction Account GuaranteeProgram. The Debt Guarantee Program guarantees newly issued senior unsecureddebt of a participating organization, up to certain limits established for eachinstitution, issued between October 14, 2008 and June 30, 2009. TheFDIC will pay the unpaid principal and interest on an FDIC-guaranteed debtinstrument upon the uncured failure of the participating entity to make atimely payment of principal or interest in accordance with the terms of theinstrument. The guarantee will remain in effect until June 30, 2012. Inreturn for the FDIC's guarantee, participating institutions will pay the FDIC afee based on the amount and maturity of the debt. The Bank and the Company haveopted not to participate in the Debt Guarantee Program. 

The Transaction Account Guarantee Program provides fullfederal deposit insurance coverage for non-interest bearing transaction depositaccounts, regardless of dollar amount, until December 31, 2009. Anannualized 10 basis point assessment on balances in noninterest-bearingtransaction accounts that exceed the existing deposit insurance limit of$250,000 will be assessed on a quarterly basis to insured depositoryinstitutions that have not opted out of this component of the TemporaryLiquidity Guarantee Program. The Bank has opted to participate in theTransaction Account Guarantee Program. 

19

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**Other Pending and Proposed Legislation**

Other legislative and regulatory initiatives whichcould affect the Company, the Bank and the banking industry in general arepending, and additional initiatives may be proposed or introduced, before theU.S. Congress, the Georgia legislature and other governmental bodies in thefuture. Such proposals, if enacted, may further alter the structure, regulationand competitive relationship among financial institutions, and may subject theBank to increased regulation, disclosure and reporting requirements. Inaddition, the various banking regulatory agencies often adopt new rules andregulations to implement and enforce existing legislation. It cannot bepredicted whether, or in what form, any such legislation or regulations may beenacted or the extent to which the business of the Company or the Bank would beaffected thereby. 

**Item 2.  Properties****.**

*CartersvilleOffice.*  The Bank's mainoffice is located in Cartersville at 950 Joe Frank Harris Parkway, at thecorner of Joe Frank Harris Parkway and Market Place Boulevard.  This permanentfacility has 10,500 square feet in a two story brick facility.  This facilityhas a drive through station consisting of four teller lanes and one with adrive up automated teller service machine.

*AdairsvilleOffice.*  In January 1999,the Bank also opened a temporary branch office in Adairsville at 7450 Adairsville Highway, NW (Highway 140), Adairsville, Georgia 30103. Construction of apermanent facility for this office began in the third quarter of 1999 and itopened in the second quarter of 2000.  This branch has approximately 3,500square feet with three drive through lanes plus one drive through with anautomated teller service machine.

*Rome**Office.*  In October 2001, the Bank opened atemporary bank office at 42 Three Rivers Drive in Rome, Georgia.  The permanent facility was completed and opened in October 2004.  The Bank isapproximately 4,200 square feet, three drive-through lanes plus one ATM lane.

*Operations**Center*.  The Bank purchased a partiallyfinished building for use as an off-site Operations Center, which was completedand opened in September 2004.  The facility is approximately 9,600 square feetand is used as the technology, deposit operations, and accountingheadquarters.  The facility does not perform any direct customer servicefunctions.

*Henderson  Drive**Office*.  In June 2005, the Bank opened a fullservice facility at 601 Henderson Drive in Cartersville, Georgia.  The Bank is approximately 4,200 square feet with three drive-in lanes and an ATM lane.

*CalhounOffice*.  In August 2006,the Bank opened a full service facility at 150 W.C. Bryant Parkway in Calhoun, Georgia.  The Bank is approximately 4,200 square feet with three drive-in lanesand an ATM lane.

**Item 3.  Legal Proceedings****.**

20

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Inthe normal course of business, the Company is involved in various legalproceedings.  The Company is also involved in other non-recurring legalmatters, the ultimate outcome of which has not been determined.  In the opinionof management, any liability resulting from such proceedings would not have amaterial effect on the Company's financial statements.

21

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

Nomatter was submitted to a vote of security holders during the fourth quarter ofthe fiscal year covered by this report. 

**Item 5.  Market For Registrant's Common Equity, RelatedStockholder Matters and Issuer Purchases of Equity Securities****.**

(a) The Company completed its initial public offering on October 22, 1998.  In theoffering, 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 sincecompletion of the offering, and the Company does not anticipate a market todevelop in the near future.  As of December 31, 2007, there were approximately 1,052shareholders of record. 

During2002, the Company sold 170,299 additional shares of common stock at $16.00 pershare through a private placement offering.  The shares sold pursuant to theprivate placement were claimed exempt from registration by the issuer pursuantto federal and state securities laws (Regulation D and O.C.G.A. § 10-5-9(16),respectively).  The shares were sold by the executive officers and directors ofthe Company without commissions, remuneration, or any other compensation.  Allpurchasers executed a subscription agreement in which each represented that heor she met the requirements of an "accredited investor" within the meaning ofRegulation D under the Securities Act of 1933.  The sale generated additionalcapital of $2,724,784 during the year.

Alloutstanding shares of Common Stock of the Company are entitled to share equallyin dividends as and if declared by the Board of Directors.  The Company doesnot plan to declare any dividends in the immediate future. 

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

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|                | High Selling Price | Low Selling Price |
|----------------|--------------------|-------------------|
|                |                    |                   |
| **2008**       |                    |                   |
| First Quarter  | $30.00             | $28.00            |
| Second Quarter | $28.00             | $28.00            |
| Third Quarter  | $25.00             | $25.00            |
| Fourth Quarter | $25.00             | $25.00            |
|                |                    |                   |
|                |                    |                   |
| **2007**       |                    |                   |
| First Quarter  | $28.00             | $26.00            |
| Second Quarter | $30.00             | $28.00            |
| Third Quarter  | $30.00             | $28.00            |
| Fourth Quarter | $30.00             | $30.00            |

TheCompany has not paid dividends since its inception.  As discussed in Item 1above, the Bank's ability to pay dividends is subject to numerous statutoryconditions.  Thus, to the extent the source of dividends to be paid by theCompany is dividends from the Bank, the Company may continue not to paydividends in the near future.  The Company did not purchase any of its commonstock during the fourth quarter of 2008.

** **

**UnregisteredSales of Equity Securities**

None

**Item 7.  Management's Discussion and Analysis or Plan ofOperations****.**

Theinformation required by this item is incorporated by reference to Exhibit 99.1which contains the consolidated financial statements and the Management'sDiscussion and Analysis of Financial Condition and Results of Operations of theRegistrant and its subsidiaries, contained with this Annual Report on Form10-K.

**Item 8.  Financial Statements****.**

The followingconsolidated financial statements of the Registrant and its subsidiaries areincluded on Exhibit 13.1 of this Annual Report on Form 10-KSB:

** **

ConsolidatedBalance Sheets - December 31, 2008 and 2007

ConsolidatedStatements of Operation - December 31, 2008 and 2007

ConsolidatedStatements of Comprehensive Income (Loss) - December 31, 2008 and 2007

ConsolidatedStatements of Stockholders' Equity - December 31, 2008 and 2007

ConsolidatedStatements of Cash Flows - December 31, 2008 and 2007

Notes toConsolidated Financial Statements

** **

Management'sDiscussion and Analysis of Financial Condition and Results of Operations

**Item 9. Changes in and Disagreements with Accountants on Accounting and FinancialDisclosure****.**

The principal independent accountant ofthe Company and of the Bank has not resigned, declined to stand forre-election, or been dismissed during the two most recent fiscal years or anylater interim period.  There has been no reporting disagreements on any matterof accounting principle, practice, financial statement disclosure or auditingsteps or procedures during the two most recent fiscal years.

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**Item 9A.  Controls andProcedures****.**

As of the end of the period covered by this report, we carried outan evaluation, under the supervision and with the participation of our ChiefExecutive Officer and the Principal Financial and Accounting Officer, of thedesign and operation of our disclosure controls and procedures.  Based on thisevaluation, our Chief Executive Officer and Principal Financial and AccountingOfficer concluded that our disclosure controls and procedures are effective.

**Management's Report on Internal Controlover Financial Reporting**

The management of Unity Holding,Inc. and subsidiaries is responsible for establishing and maintaining adequateinternal control over financial reporting.  This internal control system hasbeen designed to provide reasonable assurance to the Company's management andboard of directors regarding the preparation and fair presentation of theCompany's published financial statements.

All internal control systems, no matterhow well designed, have inherent limitations.  Therefore, even those systemsdetermined to be effective can provide only reasonable assurance with respectto financial statement preparation and presentation.

The management of Unity Holdings,Inc. and subsidiaries has assessed the effectiveness of the Company's internalcontrol over financial reporting as of December 31, 2008.  To make thisassessment, we used the criteria for effective internal control over financialreporting described in *Internal Control-Integrated Framework*, issued bythe Committee of Sponsoring Organizations of the Treadway Commission.  Based onour assessment, we believe that, as of December 31, 2008, the Company'sinternal control over financial reporting met those criteria and is effective.

Thisannual report does not include an attestation report of the Company'sregistered public accounting firm regarding internal control over financialreporting.  Management's report was not subject to attestation by theCompany's registered public accounting firm pursuant to temporary rules of theSecurities and Exchange Commission that permit the Company to provide onlymanagement's report in this annual report.

**Changes inInternal Controls**

There were nochanges made in our internal controls during the period covered by this reportor, to our knowledge, in other factors that have materially affected, or arereasonably likely to materially affect after these controls.

See theCertifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

**Item 9B.  Other Information****.**

None

** **

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**Item 10. Directors, Executive Officers, Promoters, Control Persons, and CorporateGovernance; Compliance with Section 16(a) of the Exchange Act****.**

**Code of Ethics**

Upon writtenrequest, a copy of the Unity Holdings, Inc Code of Ethics shall befurnished to shareholders without charge.  Please direct your writtenrequest to:

Eli D. MullisSenior Vice President and Chief Financial OfficerUnity National BankP.O. Box 200308Cartersville, GA 30120-9006

The remaining information required by this Item is incorporated byreference to the Company's definitive Proxy Statement to be filed with theSecurities and Exchange Commission pursuant to Regulation 14A within 120 daysafter the end of the fiscal year covered by this Annual Report.

** **

**Item 11. Executive Compensation****.**

The information required by this Item is incorporated by referenceto the Company's definitive Proxy Statement to be filed with the Securities andExchange Commission pursuant to Regulation 14A within 120 days after the end ofthe fiscal year covered by this Annual Report.

**Item 12. Security Ownership of Certain Beneficial Owners and Management**

The information required by this Item is incorporated by referenceto the Company's definitive Proxy Statement to be filed with the Securities andExchange Commission pursuant to Regulation 14A within 120 days after the end ofthe fiscal year covered by this Annual Report.

**Item 13. Certain Relationships, Related Transactions, and Director Independence****.**

The information required by this Item is incorporated by referenceto the Company's definitive Proxy Statement to be filed with the Securities andExchange Commission pursuant to Regulation 14A within 120 days after the end ofthe fiscal year covered by this Annual Report.

**Item 14****.  Principal Accountant Fees andServices**

The information required by this Item isincorporated by reference to the Company's definitive Proxy Statement to befiled with the Securities and Exchange Commission pursuant to Regulation 14Awithin 120 days after the end of the fiscal year covered by this Annual Report.

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**Item 15. Exhibits, Financial Statement Schedule******

| (a)   The  following documents are filed as part of this report: |
|----------------------------------------------------------------------------|
|                                                                            |  |  |
|                                                                            | 1 | Financial  statements:  The consolidated balance sheets of Unity Holdings, Inc. and its  subsidiaries as of December 31, 2008 and 2007, and the related consolidated  statements of operations, consolidated statements of comprehensive income  (loss), statements of stockholders' equity and consolidated statements of  cash flows for each of the years in the two-year period ended December 31,  2008, together with related notes and the independent auditor's report of  Mauldin & Jenkins, LLC, independent accountants. |
|                                                                            |  |  |
|                                                                            | 2 | Financial  statement schedules:  All schedules are omitted as the required information  is inapplicable or the information is presented in the financial statements  or related notes. |
|                                                                            |  |  |
|                                                                            | 3. | Exhibits:  A  list of the Exhibits as required by Item 601 of Regulation S-K to be filed as  part of this Annual Report is shown on the "Exhibit Index" filed herewith. |
|                                                                            |  |  |
|                                                                            |  |  |

** **

** **

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**SIGNATURES**

Inaccordance with Section 13 or 15(d) of the Exchange Act, the registrant causedthis report to be signed on its behalf by the undersigned, thereunto dulyauthorized. 

UNITY HOLDINGS,INC. 

Date: March 27,2009

By: /s/ MICHAELL. MCPHERSON        Michael L. McPherson 

       President and Chief Operating Officer 

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KNOWALL MEN BY THESE PRESENTS, that each person whose signature appears belowconstitutes and appoints Michael L. McPherson, his true and lawfulattorney-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 signany and all amendments to this Registration Statement, and to file the same,with all exhibits thereto, and other documents in connection therewith, withthe Securities and Exchange Commission, granting unto attorney-in-fact andagent full power and authority to do and perform each and every act and thingrequisite or necessary to be done in and about the premises, as fully to allintents and purposes as he might or could do in person, hereby ratifying andconfirming all that attorney-in-fact and agent, or his substitute or substitutes,may lawfully do or cause to be done by virtue hereof. 

Pursuantto the requirements of the Securities Exchange Act of 1934, this report hasbeen signed by the following persons in the capacities indicated on March 27,2009.

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| **Signature**                                   | **Title**                                         |
|-------------------------------------------------|---------------------------------------------------|
|                                                 |                                                   |
|                                                 |                                                   |
| /s/ KENNETH  R. BISHOP  Kenneth R. Bishop       | Director                                          |
|                                                 |                                                   |
|                                                 |                                                   |
| /s/ JERRY  W. BRADEN   Jerry W. Braden          | Director                                          |
|                                                 |                                                   |
|                                                 |                                                   |
| /s/ MICHAEL  L. MCPHERSON  Michael L. McPherson | Director,  President and Chief Executive Officer  |
|                                                 |                                                   |
|                                                 |                                                   |
| /s/ DONALD  D. GEORGE  Donald D. George         | Director                                          |
|                                                 |                                                   |
|                                                 |                                                   |
| /s/ JOHN S.  LEWIS  John S. Lewis               | Director                                          |
|                                                 |                                                   |
|                                                 |                                                   |
| /s/ SAM R.  MCCLESKEY  Sam R. McCleskey         | Director                                          |
|                                                 |                                                   |
|                                                 |                                                   |
| /s/ STEPHEN  A. TAYLOR  Stephen A. Taylor       | Director                                          |
|                                                 |                                                   |
|                                                 |                                                   |
| /s/ B. DON  TEMPLES   B. Don Temples            | Director                                          |
|                                                 |                                                   |
|                                                 |                                                   |
| /s/ ELI D.  MULLIS  Eli D. Mullis               | Chief Financial  and Principal Accounting Officer |
|                                                 |                                                   |

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**INDEX TO EXHIBITS**

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|  |      |                                                                                                                                                                                                                                                                                                                                                      |
|--|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | 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 the 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).                                                                                                                                                                                                            |
|  |      |                                                                                                                                                                                                                                                                                                                                                      |
|  | 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). |
|  |      |                                                                                                                                                                                                                                                                                                                                                      |
|  | 10.8 | Stock Option  Agreement between Unity Holdings, Inc. and Eli D. Mullis dated December 21,  2004, as allowed under the 1999 Stock Incentive Plan adopted by the  shareholders on May 19, 1999 (incorporated by reference to Exhibit 10.8 of  the Annual Report on Form 10-KSB filed with the Commission on March 29, 2005)  .                         |
|  |      |                                                                                                                                                                                                                                                                                                                                                      |
|  | 10.9 | Agreement By  and Between Unity National Bank and the Comptroller of the Currency dated  February 3, 2009 (incorporated by reference to Exhibit 99.1 of the Current  Report on Form 8-K, File No. 000-25851).                                                                                                                                        |
|  |      |                                                                                                                                                                                                                                                                                                                                                      |
|  | 11.1 | Statement of  Net Earnings Per Share (incorporated by reference to Exhibit 99.1 which  contains the consolidated financial statements of the Registrant and its  subsidiaries, contained with this Annual Report on Form 10-KSB).                                                                                                                    |
|  |      |                                                                                                                                                                                                                                                                                                                                                      |
|  | 13.1 | Consolidated  Financial Statements and Management's Discussion and Analysis of Financial  Condition and Results of Operations.                                                                                                                                                                                                                       |
|  |      |                                                                                                                                                                                                                                                                                                                                                      |
|  | 21.1 | Subsidiaries  of the Company.                                                                                                                                                                                                                                                                                                                        |
|  |      |                                                                                                                                                                                                                                                                                                                                                      |
|  | 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).                                                                                                                                                                                                                                                                                                         |
|  |      |                                                                                                                                                                                                                                                                                                                                                      |
|  | 31.1 | Certifications  of the Registrant's Chief Executive Officer pursuant to Section 302 of the  Sarbanes Oxley Act of 2002.                                                                                                                                                                                                                              |
|  |      |                                                                                                                                                                                                                                                                                                                                                      |
|  | 31.2 | Certifications  of the Registrant's Chief Financial and Accounting Officer pursuant to  Section 302 of the Sarbanes Oxley Act of 2002.                                                                                                                                                                                                               |
|  |      |                                                                                                                                                                                                                                                                                                                                                      |
|  | 32.1 | 18  U.S.C. Section 1350 Certifications of the Registrant's Chief Executive  Officer and Chief Financial and Accounting Officer                                                                                                                                                                                                                       |
|  |      |                                                                                                                                                                                                                                                                                                                                                      |
|  |      |                                                                                                                                                                                                                                                                                                                                                      |

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**Exhibit 21.1**

** **

**Subsidiaries of Unity Holdings, Inc.**

** **

** **

| Direct/wholly-owned           | State of Incorporation |
|-------------------------------|------------------------|
|                               |                        |
| Unity National  Bank          | Georgia                |
|                               |                        |
| Unity (Ga)  Statutory Trust I | Delaware               |
| ** **                    | ** **             |

 

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**EXHIBIT 31.1**

**CERTIFICATIONS PURSUANT TO RULE 13a-14(a)/15d-14(a) UNDER THE**

**SECURITIES EXCHANGE ACT OF 1934, AS AMENDED**

I, Michael L. McPherson,Chief Executive Officer, certify that: 

| 1. | I have reviewed this  Form 10-K of Unity Holdings, Inc.; |
|----|----------------------------------------------------------|

| 2. | Based on my knowledge,  this report does not contain any untrue statement of a material fact or omit  to state a material fact necessary to make the statements made, in light of  the circumstances under which such statements were made, not misleading with  respect to the period covered by this report; |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3. | Based on my knowledge,  the financial statements, and other financial information included in this  report, fairly present in all material respects the financial condition,  results of operations and cash flows of the registrant as of, and for, the  periods presented in this report; |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4. | The registrant's other  certifying officers and I are responsible for establishing and maintaining  disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)  and 15d-15(e)) and internal control over financial reporting (as defined in  Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (a) | Designed such  disclosure controls and procedures, or caused such disclosure controls and  procedures to be designed under our supervision, to ensure that material  information relating to the registrant, including its consolidated  subsidiaries, is made known to us by others within those entities,  particularly during the period in which this report is being prepared; |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | Designed such internal  control over financial reporting, or caused such internal control over  financial reporting to be designed under our supervision, to provide  reasonable assurance regarding the reliability of financial reporting and the  preparation of financial statements for external purposes in accordance with  generally accepted accounting principles; |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c) | Evaluated the  effectiveness of the registrant's disclosure controls and procedures and  presented in this report our conclusions about the effectiveness of the  disclosure controls and procedures, as of the end of the period covered by  this report based on such evaluation; and |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (d) | Disclosed in this  report any change in the registrant's internal control over financial  reporting that occurred during the registrant's most recent fiscal quarter  (the registrant's fourth fiscal quarter in the case of an annual report) that  has materially affected, or is reasonably likely to materially affect, the  registrant's internal control over financial reporting; and |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5. | The registrant's other  certifying officers and I have disclosed, based on our most recent evaluation  of internal control over financial reporting, to the registrant's auditors  and the audit committee of registrant's board of directors (or persons  performing the equivalent functions): |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (a) | All significant  deficiencies and material weaknesses in the design or operation of internal  control over financial reporting which are reasonably likely to adversely affect  the registrant's ability to record, process, summarize and report financial  information; and |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | Any fraud, whether or  not material, that involves management or other employees who have a  significant role in the registrant's internal control over financial  reporting. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                     |              |                           |
|---------------------|--------------|---------------------------|
| March 27, 2009 |    | /s/  Michael L. McPherson |
|                     |    | MICHAEL L.McPHERSON       |
|                     |    | Chief Executive  Officer  |

** **

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**EXHIBIT 31.2**

**CERTIFICATIONS PURSUANT TO RULE 13a-14(a)/15d-14(a) UNDER THE**

**SECURITIES EXCHANGE ACT OF 1934, AS AMENDED**

I, Eli D.Mullis, ChiefFinancial and Accounting Officer, certify that: 

| 1. | I have reviewed this  Form 10-K of Unity Holdings, Inc.; |
|----|----------------------------------------------------------|

| 2. | Based on my knowledge,  this report does not contain any untrue statement of a material fact or omit  to state a material fact necessary to make the statements made, in light of  the circumstances under which such statements were made, not misleading with  respect to the period covered by this report; |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3. | Based on my knowledge,  the financial statements, and other financial information included in this  report, fairly present in all material respects the financial condition,  results of operations and cash flows of the registrant as of, and for, the  periods presented in this report; |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4. | The registrant's other  certifying officers and I are responsible for establishing and maintaining  disclosure controls and procedures (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) and internal control over financial reporting (as  defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and  have: |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (a) | Designed such  disclosure controls and procedures, or caused such disclosure controls and  procedures to be designed under our supervision, to ensure that material  information relating to the registrant, including its consolidated  subsidiaries, is made known to us by others within those entities,  particularly during the period in which this report is being prepared; |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | Designed such internal  control over financial reporting, or caused such internal control over  financial reporting to be designed under our supervision, to provide  reasonable assurance regarding the reliability of financial reporting and the  preparation of financial statements for external purposes in accordance with  generally accepted accounting principles; |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c) | Evaluated the  effectiveness of the registrant's disclosure controls and procedures and  presented in this report our conclusions about the effectiveness of the  disclosure controls and procedures, as of the end of the period covered by this  report based on such evaluation; and |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (d) | Disclosed in this  report any change in the registrant's internal control over financial  reporting that occurred during the registrant's most recent fiscal quarter  (the registrant's fourth fiscal quarter in the case of an annual report) that  has materially affected, or is reasonably likely to materially affect, the  registrant's internal control over financial reporting; and |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5. | The registrant's other  certifying officers and I have disclosed, based on our most recent evaluation  of internal control over financial reporting, to the registrant's auditors  and the audit committee of registrant's board of directors (or persons  performing the equivalent functions): |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (a) | All significant  deficiencies and material weaknesses in the design or operation of internal  control over financial reporting which are reasonably likely to adversely  affect the registrant's ability to record, process, summarize and report  financial information; and |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | Any fraud, whether or  not material, that involves management or other employees who have a  significant role in the registrant's internal control over financial  reporting. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                     |  |                                         |
|---------------------|--|-----------------------------------------|
| March 27, 2009 |  | /s/  Eli D. Mullis                      |
|                     |  | ELI D. MULLIS                           |
|                     |  | Chief Financial and  Accounting Officer |

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**Exhibit 32.1**

** **

** **

**CERTIFICATION OF CEO AND CFO PURSUANT TO**

**18 U.S.C. SECTION 1350,**

**AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF2002**

Inconnection with the Form 10-K of Unity Holdings, Inc. (the "Company") for theyear ending December 31, 2008 as filed with the Securities and ExchangeCommission on the date hereof (the "Report"), Michael L. McPherson, ChiefExecutive Officer of the Company, and  Eli D. Mullis, Chief Financial Officerof the Company, each hereby certifies, pursuant to 18 U.S.C. § 1350, as adoptedpursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of his/herknowledge that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) ofthe Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all materialrespects, the financial condition and results of operation of the Company.

/s/MICHAEL L.MCPHERSONMICHAEL L. McPHERSON

Chief ExecutiveOfficer

March27, 2009

/s/ELI D.MULLISELI D. MULLIS

Chief Financialand Accounting Officer

March27, 2009

This certification accompanies thisReport pursuant to section 906 of the Sarbanes-Oxley Act of 2002 and shall not,except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filedby the Company for purposes of section 18 of the Securities Exchange Act of1934, as amended.

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