CCF HOLDING COMPANY

                                 ANNUAL REPORT
                           For the Fiscal Year Ended

                              September 30, 1996

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





<PAGE>




                              CCF HOLDING COMPANY
                                 ANNUAL REPORT

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

TABLE OF CONTENTS
------------------------------------------------------------------------------




Letter to Stockholders....................................................   1


Corporate Profile and Stock Market Information............................   2


Selected Financial and Other Data.........................................   3


Management's Discussion and Analysis......................................   4


Independent Auditors' Report.............................................   12


Consolidated Financial Statements........................................   13


Notes to Consolidated Financial Statements...............................   21


Office Locations and Other Corporate Information.........................   47














<PAGE>



                          [CCF HOLDING COMPANY LOGO]

December 23, 1996

Dear Fellow Stockholders:

We are proud to report  that 1996 has been a very  successful  year for  Clayton
Federal.

The  conversion to a stock  company now has us well  positioned  for  tomorrow's
challenges.

Our stock  offering has been,  and continues to be,  profitable  for  investors.
Extensive planning to increase shareholder value has gone well beyond first year
goals. From its initial offering price of $10 per share we have recently reached
an all time high of $15.25 and have paid $.55 in regular and  special  dividends
in the past  year and we have  declared  another  $.50 of  regular  and  special
dividends  payable in January  1997.  We continue to manage our capital  through
stock  repurchases  and  fixed  asset  investments  in  an  effort  to  increase
shareholder value.

Additionally,  we have  hired  new  people  with  extensive  commercial  banking
experience to supplement our already outstanding staff.

The Board of  Directors  appreciates  your  continued  support  and  confidence.
Through the collective  efforts of our loyal management team, and employees,  we
are pleased to report the  financial  results that are detailed in the following
pages.

We are  eagerly  looking  forward to 1997.  Banking  has never been  brighter at
Clayton Federal.

Very truly yours,

/s/ David B. Turner
D.B. Turner
President

                                     -1-


<PAGE>



                                 CCF HOLDING COMPANY

Corporate Profile and Related Information

CCF Holding Company (the "Company") is a Georgia corporation  organized in March
1995 at the direction of Clayton  County  Federal  Savings and Loan  Association
(the  "Association")  in connection  with the  Association's  conversion  from a
mutual to stock form of organization (the  "Conversion").  On July 11, 1995, the
Association completed the Conversion and became a wholly owned subsidiary of the
Company.  The Company is a unitary savings and loan holding company which, under
existing laws,  generally is not restricted in the types of business  activities
in which it may engage  provided the Association  retains a specified  amount of
its assets in housing-related investments.

The  Association  is a federally  chartered  stock savings and loan  association
which originally  commenced  business in 1955. The Association's  primary market
area is currently Clayton County,  Georgia, where the Association operates three
offices. Clayton County is part of the Atlanta, Georgia metropolitan statistical
area and home to a portion of Atlanta's  Hartsfield  International  Airport. The
Association  also solicits  deposits and makes loans in the adjacent market area
of  Fayette  and  Henry  counties  in  Georgia.  To a much  lesser  extent,  the
Association also makes loans in Coweta, Rockdale,  Spalding, and Lamar counties,
Georgia. The Association is subject to examination and comprehensive  regulation
by the Office of Thrift  Supervision  ("OTS")  and its  deposits  are  federally
insured by the  Savings  Association  Insurance  Fund  ("SAIF")  of the  Federal
Deposit Insurance Corporation ("FDIC").  The Association is a member of and owns
capital stock in the Federal Home Loan Bank ("FHLB") of Atlanta, which is one of
the 12 regional banks in the FHLB System.

The Association attracts deposits from the general public and uses such deposits
primarily  to  invest in and  originate  loans  secured  by first  mortgages  on
owner-occupied,  one- to  four-family  residences  in its market  area and, to a
lesser  extent,  to invest in investment  securities.  The principal  sources of
funds  for  the   Association's   lending   activities   are  deposits  and  the
amortization,  repayment,  and maturity of loans and investment securities.  The
Association does not rely on brokered deposits.  Principal sources of income are
interest on loans and investment securities. The Association's principal expense
is interest paid on deposits.

Stock Market Information

Since its issuance in July 1995, the Company's common stock ("Common Stock") has
been traded on the Nasdaq  SmallCap  Market under the trading  symbol of "CCFH."
The daily stock  quotation for the Company is published under the symbols "CCF."
The following  table  reflects  high and low bid  quotations as published by USA
Today  and  The  Wall  Street  Journal  as  well as  dividend  information.  The
quotations reflect inter-dealer prices,  without retail mark-up,  mark-down,  or
commission, and may not represent actual transactions.

<TABLE>
<CAPTION>


                                                                 Dividends
              Date                      High        Low          Declared        Dividends Paid
              ----                      ----        ---          ---------       ---------------

<S>                                    <C>        <C>             <C>               <C> 
July 11, 1995 to September 30, 1995    $11.75      $10.75          $ --             $ --

October 1, 1995 to December 31, 1995    12.75       11.25           .35               --

January 1, 1996 to March 31, 1996       12.75       11.50            --              .35

April 1, 1996 to June 30, 1996          12.50     11.3125           .20               --

July 1, 1996 to September 30, 1996      13.25       11.50            --              .20


</TABLE>

The number of  shareholders  of record of Common  Stock as of the record date of
December 13, 1996,  was  approximately  400. This does not reflect the number of
persons or entities who held stock in nominee or "street"  name through  various
brokerage  firms. At December 13, 1996,  there were 915,900 shares  outstanding.
The

                                        -2-


<PAGE>



Company's  ability to pay dividends to stockholders is primarily  dependent upon
the dividends it receives from the Association.  The Association may not declare
or pay a cash dividend on any of its stock if the effect thereof would cause the
Association's regulatory capital to be reduced below (1) the amount required for
the liquidation  account  established in connection with the Conversion,  or (2)
the regulatory capital requirements imposed by the OTS.

-------------------------------------------------------------------------------
SELECTED FINANCIAL AND OTHER DATA
-------------------------------------------------------------------------------
Financial Condition (Dollars in thousands)
At September 30,
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                           1996      1995       1994       1993        1992
                                         --------  ---------  ---------  ---------  -------
Total Amount of:

<S>                                      <C>        <C>        <C>        <C>         <C>    
  Assets...............................  $80,283    $79,822    $69,080    $71,115     $72,347
  Loans receivable, net................   51,500     45,196     44,244     47,255      52,461
  Mortgage-backed securities...........   10,025      7,896      6,804      7,079       6,523
  Investment securities................   13,353     15,671     12,795      9,528       5,288
  Liabilities .........................   65,843     62,501     62,866     65,214      67,185
  Deposits.............................   61,822     61,132     61,598     64,050      65,966
  FHLB advances........................    2,500         --         --         --          --
  Stockholders' equity.................   14,440     17,322      6,214      5,901       5,163

Other Data:

  Net income ..........................      473        604        431        739         701
  Average assets.......................   79,348     72,229     70,533     71,627      73,909
  Average equity.......................   16,733      8,973      6,061      5,540       4,785
  Total number of customer service
   facilities(1).......................        3          4          4          4           4
  Full service offices.................        1          1          1          1           1

</TABLE>

---------------------------------
(1)  These  facilities  provide  all  banking  services  with the  exception  of
     mortgage loans, which are processed only at the main office.


-------------------------------------------------------------------------------
Summary of Operations (Dollars in thousands)
Year Ended September 30,
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                            1996      1995       1994      1993       1992
                                          --------  ---------  --------  ---------  ------
<S>                                        <C>        <C>       <C>        <C>        <C>   
Total interest income...................   $5,573     $5,021    $4,872     $5,248     $6,001
Total interest expense..................    2,527      2,479     2,245      2,637      3,680
                                           ------     ------     -----      -----      -----
  Net interest income...................    3,046      2,542     2,627      2,611      2,321
Provision for loan losses...............      130          5        69         98         95
                                           ------     ------     -----      -----      -----
  Net interest income after provision

    for loan losses.....................    2,916      2,537     2,558      2,513      2,226
Other income............................      415        328       346        362        462
Other expenses(1).......................    2,715      1,968     1,904      1,750      1,618
                                            -----      -----     -----      -----      -----
Income before income taxes and cumulative
  effect of change in accounting principle    616        897     1,000      1,125      1,070
Income tax expense......................      143        293       363        386        369
                                            -----      -----     -----      -----      -----
Income before cumulative effect of change
 in accounting principle.................     473        604       637        739        701
Cumulative effect of change in
  accounting principle..................       --         --       206         --         --
                                            -----      -----     -----      -----      -----
  Net income............................   $  473     $  604    $  431     $  739     $  701
                                            =====      =====     =====      =====      =====
</TABLE>

---------------------------------
(1)  For 1996,  included a $398,000  one time  assessment  to  recapitalize  the
     Savings Association Insurance Fund ("SAIF") of the FDIC.

                                        -3-


<PAGE>



-------------------------------------------------------------------------------
Key Operating Ratios
At or for the Year Ended September 30,
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>

Performance Ratios:                                    1996       1995       1994      1993      1992
                                                    ----------  ---------  --------  --------  -------
Return on average assets (net income
<S>                                                 <C>        <C>         <C>       <C>       <C>  
  divided by average total assets) ............         0.60%      0.84%     0.61%     1.03%     0.95%
Return on average equity (net income
  divided by average equity) ..................         2.83       6.73      7.11     13.34     14.65
Average interest-earning assets to
  average interest-bearing liabilities ........       122.83     110.75    106.50    106.69    103.77
Net interest rate spread ......................         3.27       3.31      3.68      3.52      3.10
Net yield on average interest-earning asset....         4.04       3.70      3.89      3.77      3.29
Net interest income after provision for loan
  losses to total other expenses ..............       107.40     128.93    134.38    143.59    137.58
Earnings per share (1) ........................     $   0.45   $   0.19       N/A       N/A       N/A

Capital Ratios:
Book value per share (1) ......................     $  14.68   $  14.55       N/A       N/A       N/A
Average equity to average assets ratios
  (average equity divided by average total
  assets) .....................................        21.09%     12.42%     8.59%     7.73%     6.47%
Equity-to-assets (End of Period) ..............        17.99      21.70      9.00      8.30      7.14

Asset Quality Ratios:
Non-performing loans to total loans, net ......         1.17       0.39      0.41      2.31      1.16
Non-performing loans to total assets ..........         0.75       0.22      0.26      1.53      0.84
Allowance for loan losses to nonperforming
  loans .......................................        89.90     233.71    237.63     33.15     43.26

</TABLE>

------------------------
(1)   There  were  no  shares  outstanding  prior  to  the  consummation  of the
      Company's  initial public  offering on July 11, 1995. The number of shares
      outstanding  as of September 30, 1995 was  1,190,250  and 983,332,  net of
      16,668  shares  held as  treasury  shares  and in trust for the MSBP as of
      September 30, 1996,  including shares held by the  Association's  Employee
      Stock  Ownership Plan ("ESOP").  For purposes of presenting net income per
      share, only post-Conversion net income is considered.

                        MANAGEMENT'S DISCUSSION AND ANALYSIS
                                OR PLAN OF OPERATION

General

The earnings of the Company depend primarily on the earnings of the Association.
The largest  components of the Association's net income are net interest income,
which is the difference between interest income and interest expense,  and other
income  derived   primarily   from  loan   origination   and  commitment   fees.
Consequently,  the  Association's  earnings  are  dependent  on its  ability  to
originate   loans,   net  interest   income,   and  the   relative   amounts  of
interest-earning assets and interest-bearing  liabilities. The Association's net
income is also  affected by its provision  for loan losses and  foreclosed  real
estate as well as the amount of other  expenses,  such as salaries  and employee
benefits,  occupancy and  equipment,  and federal  deposit  insurance  premiums.
Earnings of the Association also are affected  significantly by general economic
and  competitive  conditions,  particularly  changes in market  interest  rates,
government policies, and actions of regulatory authorities.

                                        -4-


<PAGE>



Business Strategy

The Association's business strategy is to endeavor to be a flexible,  efficient,
and financially  stable community  financial  services  institution  providing a
range  of  real  estate  lending  services,  commercial  lending,  and  consumer
financial products primarily to the Clayton,  Fayette, and Henry County, Georgia
areas.  The  management of the  Association  has identified and sought to pursue
four  primary  strategic  objectives:  (1) to  maintain  an  adequate  amount of
regulatory capital; (2) to reduce interest rate risk; (3) to maintain good asset
quality through continued  emphasis on well underwritten  consumer,  commercial,
and  residential  lending;  and (4) to broaden our product and customer  base to
become a more diversified financial institution.

     1. Regulatory Capital.  Prior to the Conversion,  the Association sought to
     manage its size and asset  quality in order to allow its capital  ratios to
     increase in order to comply with and safely exceed the  regulatory  capital
     requirements.  During this  period,  management  did not price its deposits
     competitively by increasing interest rates paid, which to a limited extent,
     allowed  the  deposit  base  to  shrink.  To  further  this  strategy,  the
     Association did not aggressively seek to increase its market share of loans
     nor to expand the market area for lending.  This  strategy  resulted in the
     Association  increasing  its capital  ratios,  and when  combined  with the
     proceeds from the Conversion,  the Association's capital was well in excess
     of all of its risk-based  capital  requirements.  The  Association has used
     some of the  proceeds  from  the  Conversion  to make  one- to  four-family
     mortgage loans, acquire property for future branch expansion and repurchase
     shares of the Company's stock.

     2. Reduction of Interest Rate Risk. The  Association has sought to decrease
     its interest rate risk through the origination of adjustable-rate  mortgage
     loans  when  market  conditions  permit.  During the past five  years,  the
     Association  has sold a portion  of its  fixed-rate  mortgage  loans in the
     secondary  market.  The emphasis in the loan  portfolio will be to increase
     the volume of loans that reprice at least annually.

     3. Asset Quality.  The Association  continues to seek to maintain its asset
     quality through  emphasizing  residential  lending  activity in its lending
     market.  At  September  30,  1996,  93.3% of the  Association's  gross loan
     portfolio  consisted  of  one- to  four-family  residential  mortgages.  At
     September 30, 1996, the Association's ratio of nonperforming loans to total
     assets was 0.75%.

     4.  Product and  Customer  Base.  The  Association  will seek to expand its
     customer  base  through  the  development  of  more  extensive  commercial,
     consumer and non-deposit related products.

The Association intends to maintain  profitability and manage interest rate risk
principally  through continued emphasis on adjustable-rate  loan production when
market conditions permit. The management of the Association  believes that there
are opportunities  for growth within the  Association's  primary market area and
adjacent  market  areas,  and the  Association  intends  to manage the growth of
deposits  and loans in a manner  that will  ensure its  ability  to comply  with
current and future capital requirements as well as manage interest rate risk.

Asset and Liability Management

Interest  Rate  Sensitivity.  The ability to  maximize  net  interest  income is
largely  dependent  upon  achieving a positive  interest rate spread that can be
sustained  during  fluctuations in prevailing  interest rates.  The Association,
like many other  thrift  institutions,  is subject  to  interest  rate risk as a
result  of  the  difference  in the  maturity  of  interest-bearing  liabilities
(including  deposits)  and  interest-earning  assets  (including  loans) and the
volatility of interest rates. Because most deposit accounts, given their shorter
terms to maturity, react more quickly to market

                                        -5-


<PAGE>



interest  rate  movements  than do  traditional  mortgage  loans,  increases  in
interest  rates  may have a  substantial  adverse  effect  on the  Association's
earnings.   Conversely,   this  same   mismatch  will   generally   benefit  the
Association's earnings during periods of declining or stable interest rates.

The  Association's  net  interest  rate  spread  was  3.68%  for the year  ended
September 30, 1994,  decreased to 3.31% at September 30, 1995,  and decreased to
3.27% at September 30, 1996. If rates  increase,  there may be a negative impact
on the  Association's  net interest rate spread and earnings as deposits reprice
faster than loans.

The Association  attempts to manage the interest rates it pays on deposits while
maintaining  a  stable  deposit  base  and  providing  quality  services  to its
customers.  The Association has continued to rely primarily upon deposits as its
source of funds.  To the extent the  Association is unable to invest these funds
in loans  originated  in the  Association's  market  area,  it will  continue to
purchase  (i)  mortgage-backed  securities  and  (ii)  high  quality  investment
securities.

In an effort to manage  interest  rate  risk and  protect  it from the  negative
effect of increases in interest rates,  the  Association has instituted  certain
asset and liability management measures,  including the following: 1) reduce the
maturities or terms to repricing of  interest-earning  assets by emphasizing the
origination of adjustable  rate loans and the purchase of relatively  short-term
interest-earning  investments and  mortgage-backed  securities;  2) lengthen the
maturities of interest-bearing  liabilities by encouraging  depositors to invest
in longer term  deposit  products  offered by the  Association;  3) increase the
amount of less  rate-sensitive  deposits  by  actively  seeking  NOW  (checking)
accounts;  4) encourage long-term depositors to maintain their accounts with the
Association through expanded customer products and services; and 5) leverage the
excess capital of the Association.

                                        -6-


<PAGE>



Average  Balance  Sheets.  The following  table sets forth  certain  information
relating to the  Association's  average  balance sheets and reflects the average
yield on assets and average cost of liabilities for the periods indicated.  Such
yields and costs are  derived  by  dividing  income or  expense  by the  average
balance  of assets or  liabilities,  respectively,  for the  periods  presented.
Average  balances  are derived  from  month-end  balances.  Management  does not
believe that the use of month-end balances instead of daily average balances has
caused any material differences in the information presented.

<TABLE>
<CAPTION>

 
                                                                                     For the Years Ended September 30,
                                                 At September 30,     -------------------------------------------------------------
                                                      1996                         1996                             1995
                                              ----------------------  -----------------------------     --------------------------- 
                                                           Weighted              Interest                       Interest
                                              Historical    Average  Average     Income/    Yield/     Average   Income/    Yield/
                                               Balance       Rates   Balance     Expense     Rate      Balance   Expense     Rate
                                              ----------   --------  -------     --------   -----      -------   -------    ------

Assets                                                                             (Dollars in Thousands)
  Interest-earning assets:

<S>                                            <C>            <C>    <C>         <C>         <C>       <C>       <C>          <C>  
    Loans(1) ................................   $51,500        7.76%  $47,293     $ 3,844     8.13%     $44,322   $ 3,578      8.07%
    Mortgage-backed securities...............    10,025        6.90     9,526         618     6.49        6,595       428      6.49
    Investment securities ...................    13,353        6.22    15,597         920     5.90       12,976       723      5.57
    FHLB Stock ..............................     1,013        7.40     1,013          74     7.31        1,013        74      7.31
    Interest-earning deposits in other
      financial institutions ................       513        7.02     1,986         117     5.89        3,789       218      5.75
                                                -------               -------     -------               -------   -------
      Total interest-earning assets..........    76,404        7.37    75,415       5,573     7.39       68,695     5,021      7.31
                                                               ----               -------     ----                -------      ----
Other noninterest-earning assets............      3,879                 3,933                             3,534
                                                -------               -------                           -------
     Total assets ..........................    $80,283               $79,348                           $72,229
                                                =======               =======                           =======
Liabilities and stockholders' equity:
  Interest-bearing liabilities:

    Demand deposits(2) ......................   $14,094        1.65   $13,016        236      1.81      $12,551       271      2.16
    Passbook savings ........................    11,659        2.03    11,817        274      2.32       13,770       367      2.67
    Time deposits ...........................    36,069        5.49    36,140      2,001      5.54       35,707     1,841      5.16
    FHLB advances ...........................     2,500        6.05       423         16      3.78           --        --        --
                                                -------               -------     -------               -------   -------
      Total interest-bearing liabilities.....    64,322        4.04    61,396      2,527      4.12       62,028     2,479      4.00
                                                -------        ----   -------     -------     ----      -------   -------      ----
 Other noninterest-bearing liabilities.......     1,521                 1,219                             1,228
Stockholders' equity ........................    14,440                16,733                             8,973
                                                -------               -------                           -------
      Total liabilities and
        stockholders' equity.................   $80,283               $79,348                           $72,229
                                                =======               =======                           =======
 Excess of interest-earning assets
  over interest-bearing liabilities..........   $12,082               $14,019                           $ 6,667
                                                =======               =======                           =======
Ratio of interest-earning assets
  to interest-bearing liabilities............    118.78%               122.83%                           110.75%
                                                 ======                ======                            ====== 
Net interest income .........................                                    $ 3,046                           $2,542
                                                                                 =======                           ======
Net interest spread(3) ......................                                                3.27%                            3.31%
                                                                                             ====                             ==== 
Net yield on average
  interest-earning assets(4) ................                                                4.04%                            3.70%
                                                                                             ====                             ==== 
</TABLE>

------------------------------
(1)  Average balances include nonaccrual loans.
(2)  Includes noninterest-bearing demand accounts which are not material.
(3)  Net interest spread represents the difference  between the average yield on
     interest-earning   assets  and  the   average   cost  of   interest-bearing
     liabilities.  
(4)  Net yield on average interest-earning assets represents net interest income
     as a percentage of average interest-earning assets.

                                             -7-


<PAGE>



Rate/Volume Analysis.  The following table describes the extent to which changes
in  interest  rates  and  changes  in  volume  of  interest-earning  assets  and
interest-bearing liabilities have affected the Association's interest income and
expense  during the periods  indicated.  For each  category of  interest-earning
asset and interest-bearing  liability,  information is provided as to changes in
volume (change in volume multiplied by old rate) and changes in rates (change in
rate multiplied by old volume).  The net change  attributable to changes in both
volume and rate has been allocated  proportionately  to the change due to volume
and the change due to rate.

<TABLE>
<CAPTION>


                                                             Years Ended September 30,
                                                ---------------------------------------------------
                                                 1996 compared to 1995       1995 compared to 1994
                                                ------------------------    -----------------------
                                                      Changes due to              Changes due to
                                                ------------------------    -----------------------
                                                          Rate/                       Rate/
                                                Volume    Yield    Total    Volume    Yield   Total
                                                ------    -----    -----    ------    -----   -----
                                                                    (In Thousands)

Interest income:
<S>                                              <C>      <C>      <C>      <C>      <C>      <C>   
  Loans ......................................   $ 240    $  26    $ 266    $(101)   $  (4)   $(105)
  Mortgage-backed securities .................     190       --      190      (21)      11      (10)
  Investment securities ......................     146       51      197       86       35      121
  FHLB Stock .................................      --       --       --       --       21       21
  Interest-earning deposits in other financial
    institutions .............................    (104)       3     (101)      56       66      122
                                                 -----    -----    -----    -----    -----    -----

      Total interest income ..................   $ 472    $  80    $ 552    $  20    $ 129    $ 149
                                                 =====    =====    =====    =====    =====    =====

Interest expense:
   Demand deposits ...........................   $  10    $ (45)   $ (35)   $ (33)   $  (4)   $ (37)
   Passbook savings ..........................     (52)     (41)     (93)     (12)     (12)     (24)
   Time deposits .............................      21      139      160       26      269      295
   FHLB advances .............................      16       --       16       --       --       --
                                                 -----    -----    -----    -----    -----    -----
      Total interest expense .................   $  (5)   $  53    $  48    $ (19)   $ 253    $ 234
                                                 =====    =====    =====    =====    =====    =====

      Net interest income ....................                     $ 504                      $ (85)
                                                                   =====                      =====

</TABLE>


                                     -8-


<PAGE>



Comparison of Financial Condition at September 30, 1996 and September 30, 1995

Total assets increased  $767,000 between the two dates due to increased  lending
from  funds  provided  from  increased   deposits  and  use  of  FHLB  advances.
Stockholders' equity decreased by $2.9 million to $14.4 million at September 30,
1996 from $17.3 million at September 30, 1995. The decrease was  attributable to
repurchases of Common Stock totalling $2.3 million, the $579,000 purchase of the
1995  management  stock  bonus  plan  ("MSBP")  shares and  dividends  totalling
$600,000,  that were only partially  offset by net income of $473,000,  employee
stock ownership plan shares allocated totalling $101,000 and unrealized gains on
the fair value of securities  available for sale of $22,000. The Company carries
at fair value its  securities  available  for sale,  with  unrealized  gains and
losses,  net  of  income  tax  effects,  recorded  as a  separate  component  of
stockholders'  equity in  accordance  with  Statement  of  Financial  Accounting
Standards  ("SFAS") No. 115.  Because of the  Company's  portfolio of securities
classified  as available  for sale,  the Company  could  continue to  experience
volatility  in the fair value of such  securities  during  periods  of  changing
market interest rates.  During fiscal year 1996, the Company decided to transfer
approximately $9.3 million of investment securities and $8.3 million of mortgage
backed  securities  from held to  maturity  to  available  for sale.  Management
decided to make this transfer in order to provide  additional  liquidity for the
purpose of funding its new commercial loan product line.

Deposits  of the  Association  are  insured by the SAIF as  administered  by the
Federal Deposit  Insurance  Corporation  ("FDIC").  As a member of the SAIF, the
Association paid an insurance premium to the FDIC equal to a minimum of 0.23% of
its total  deposits.  The FDIC also maintains  another  insurance fund, the Bank
Insurance  Fund ("BIF"),  which  primarily  insures  commercial  bank  deposits.
Effective  September  30, 1995,  the FDIC lowered the  insurance  premium on BIF
insured  deposits to a range of between  0.04% and 0.31% of  deposits,  with the
result that most commercial banks would pay the lowest rate of 0.04%.  Effective
January 1, 1996, the annual  insurance  premium for most BIF members was lowered
to $2,000.  These  reductions in insurance  premiums for BIF members placed SAIF
members at a competitive disadvantage to BIF members.

Effective  September  30,  1996,  federal  law was revised to mandate a one-time
special  assessment  on SAIF members such as the  Association  of  approximately
 .657% of deposits held on March 31, 1995.  The  Association  recorded a $398,000
pre-tax expense for this assessment at September 30, 1996.  Beginning January 1,
1997, deposit insurance  assessments for SAIF members are expected to be reduced
to  approximately  .064% of deposits on an annual basis through the end of 1999.
During this same period,  BIF members are expected to be assessed  approximately
 .013% of deposits.  Thereafter,  assessments  for BIF and SAIF members should be
the same and SAIF and BIF may be merged.  It is expected  that these  continuing
assessments  for both  SAIF and BIF  members  will be used to repay  outstanding
Financing Corporation bond obligations.  Assuming these changes occur, beginning
January 1, 1997, the rate of deposit  insurance  assessed the  Association  will
decline by approximately 70%.

The continuing  disparity in insurance  premiums  between those required for the
Association  and BIF  members  could  allow BIF  members to  attract  and retain
deposits  at  higher  interest  rates  and at a lower  effective  cost  than the
Association. This could put competitive pressure on the Association to raise its
interest rates paid on deposits,  thus increasing its cost of funds and possibly
reducing net interest  income.  Although the  Association  has other  sources of
funds, these other sources may have higher costs than those of deposits.

                                     -9-


<PAGE>



Comparison of Operating Results For The Years Ended September 30, 1996 and 1995

      Net Income.  The Company's net income  decreased by $130,000 from $603,000
in fiscal 1995 to $473,000 in fiscal 1996.  This  decrease was  primarily due to
the one time FDIC SAIF assessment of $398,000.

      Net  Interest  Income.  Net interest  income  (before  provision  for loan
losses)  increased  from $2.5  million  in 1995 to $3.0  million  in 1996.  This
increase  was  primarily  due to an  increase  in  interest  income  on loans of
$266,000,  more than offsetting the increase in interest expense on deposits and
FHLB advances of $48,000.  These changes were due primarily to the average rates
earned on the Association's loans increasing more significantly than the average
rate paid on deposits during 1996 and the higher volume of average loan balances
during 1996.

      Provision  For Loan Losses.  The  Association  increased the provision for
loan losses from $5,000 in 1995 to  $130,000 in 1996.  The  increase  was due to
management's  assessment of the slowing local economy,  the trends of increasing
consumer debt and higher  bankruptcies,  and the  Company's  increase in lending
activities.  The Association's allowance for loan losses increased from $409,000
at September 30, 1995, to $540,000 at September  30, 1996.  Management  believes
that its allowance for loan losses is adequate,  however,  additional provisions
for  loan  losses  have  been  re-established,  due to the  growth  of the  loan
portfolio.

     Other Income.  Other income  increased from $327,000 in 1995 to $415,000 in
1996.  This increase was  attributable  primarily to non  recurring  income from
sales of loans and investment securities.

      Other Expenses.  Other expenses increased from $1.97 million during fiscal
1995 to $2.72 million  during fiscal 1996,  representing  an  approximate  38.0%
increase. The increase is primarily due to the $398,000 SAIF assessment in 1996.
Net directors' fees and salaries increased $157,000 or 15.3%.  Employee benefits
expenses,  as a result of the Employee  Stock  Ownership Plan ("ESOP") and MSBP,
increased  by  $103,000.  The  increase  in employee  benefits  expense was also
affected  by the  reversal  of  $84,000  of  accrued  pension  costs  due to the
Association's  termination  of the pension  plan during  1995.  Group  insurance
expenses  decreased by $20,000.  Occupancy  expenses increased by $26,000 due to
expense related to partial  redecorating of the Association's  main office and a
technology upgrade in computers.

      Income Tax Expense. Income tax expense as a percent of income before taxes
decreased  from 32.7% in 1995 to 23.1% in 1996.  This decrease is due in part to
costs  associated  with an  attempt  in 1995 at  establishing  a mutual  holding
company and investment income on tax exempt municipal investments.

Liquidity Resources

The  Association  is  required to maintain  minimum  levels of liquid  assets as
defined by the OTS regulations.  The OTS minimum required  liquidity ratio is 5%
and the  minimum  short-term  liquidity  ratio is 1%.  Short-term  liquidity  at
September 30, 1996 was 40.2%.  The Association  adjusts its liquidity  levels in
order to meet funding needs for deposit  outflows,  payment of real estate taxes
from escrow accounts on mortgage loans, loan funding commitments,  and repayment
of borrowings,  when applicable.  The Association adjusts its liquidity level as
appropriate to meets it asset/liability  objectives. The primary source of funds
are  deposits,   amortization  and  prepayments  of  loans  and  mortgage-backed
securities,  maturity of investments,  and funds provided from operations. As an
alternative to supplement  liquidity  needs,  the Association has the ability to
borrow from the Federal Home Loan Bank of Atlanta. Scheduled

                                     -10-


<PAGE>



loan   amortization  and  maturing   investment   securities  are  a  relatively
predictable  source of funds,  however,  deposit flow and loan  prepayments  are
greatly  influenced  by, among other things,  market  interest  rates,  economic
conditions, and competition.  The Association's liquidity,  represented by cash,
cash  equivalents,  and  securities  available  for sale,  is a  product  of its
operating, investing, and financing activities.

Impact of Inflation and Changing Prices

The financial  statements and related data have been prepared in accordance with
generally  accepted  accounting  principles  which  require the  measurement  of
financial position and operating results in terms of historical dollars, without
consideration  for changes in the relative  purchasing  power of money over time
caused by inflation.

Unlike  industrial  companies,  nearly all of the assets  and  liabilities  of a
financial institution are monetary in nature. As a result, interest rates have a
more significant  impact on a financial  institution's  performance than general
levels  of  inflation.  Interest  rates  do not  necessarily  move  in the  same
direction  or in the same  magnitude as the price of goods and  services,  since
such goods and services are affected by inflation.  In the current interest rate
environment,  liquidity and the maturity  structure of the Association's  assets
and  liabilities  are  critical to the  maintenance  of  acceptable  performance
levels.

                                     -11-


<PAGE>




                       [KPMG Peat Marwick LLP Letterhead]

303 Peachtree Street, N.E.      Telephone 404 222 3000    Telefax 404 222 3050
Suite 2000
Atlanta, GA  30308



                          Independent Auditors' Report

The Board of Directors and Stockholders
CCF Holding Company and Subsidiaries
Jonesboro, Georgia:

We have  audited the  accompanying  consolidated  balance  sheets of CCF Holding
Company and subsidiaries  (the "Company") as of September 30, 1996 and 1995, and
the related consolidated  statements of income,  stockholders'  equity, and cash
flows for each of the years in the three-year  period ended  September 30, 1996.
These consolidated  financial statements are the responsibility of the Company's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of CCF Holding Company
and  subsidiaries  as of September  30, 1996 and 1995,  and the results of their
operations and their cash flows for each of the years in the  three-year  period
ended  September 30, 1996,  in conformity  with  generally  accepted  accounting
principles.

As discussed in notes 1 and 9, the Company  changed its method of accounting for
income  taxes as of October  1, 1993 to adopt the  provisions  of the  Financial
Accounting  Standards Board's Statement of Financial Accounting Standards (SFAS)
No. 109,  "Accounting  for Income  Taxes." As  discussed  in note 1, the Company
changed its method of accounting for investments and mortgage-backed  securities
to adopt the provisions of the Financial  Accounting  Standards Board's SFAS No.
115,  "Accounting  for Certain  Investments in Debt and Equity  Securities,"  at
September 30, 1994.



                                            /s/KPMG Peat Marwick LLP

November 15, 1996, except for note 18
  which is as of December 9, 1996


                                      -12-
Member Firm of
Klynveld Peat Marwick Goerdeler
<PAGE>



                             CCF HOLDING COMPANY AND SUBSIDIARIES

                                 Consolidated Balance Sheets

                                 September 30, 1996 and 1995
<TABLE>
<CAPTION>
                          Assets                                     1996          1995
                          ------                                     ----          ----

<S>                                                            <C>              <C>      
Cash and due from banks (note 15)                              $   2,133,135     1,972,853
Interest-bearing deposits in other financial institutions            512,610     6,474,593
Investment securities available for sale (note 2)                 13,353,381     6,690,463
Investment securities held to maturity (fair value of
    $8,950,938 at September 30, 1995 (note 2))                            -      8,980,890
Mortgage-backed securities available for sale (note 3)           10,024,936        493,130
Mortgage-backed securities held to maturity (fair value
    of $7,465,003 at September 30, 1995 (note 3))                         -      7,402,944
Federal Home Loan Bank stock, at cost (note 7)                     1,013,200     1,013,200
Loans receivable, net (note 4)                                    51,499,574    45,196,343
Accrued interest and dividends receivable (note 5)                   511,072       524,848
Premises and equipment, net (note 6)                               1,119,628       865,816
Real estate owned                                                         -         75,626
Other assets                                                         115,004       131,662



                                                               -------------    ----------
       Total assets                                            $  80,282,540    79,822,368
                                                               =============    ==========
</TABLE>


See accompanying notes to consolidated financial statements.

                                     - 13 -


<PAGE>

<TABLE>
<CAPTION>


               Liabilities and Stockholders' Equity                     1996           1995
               ------------------------------------                     ----           ----

Liabilities:
<S>                                                                 <C>               <C>       
   Deposits (note 8)                                                $ 61,821,674       61,131,515
   Advance payments by borrowers for property taxes
     and insurance                                                       531,105          662,850
   Deferred income taxes (note 9)                                        206,536          502,166
   Federal Home Loan Bank advances (note 10)                           2,500,000             -
   Savings Association Insurance Fund assessment
     payable (note 17)                                                   397,568             -
   Other liabilities                                                     385,753          204,079
                                                                     -----------      -----------
         Total liabilities                                            65,842,636       62,500,610
                                                                      ----------      -----------

Stockholders' equity (notes 14 and 15):
   Preferred stock, no par value; 1,000,000 shares
     authorized; none issued and outstanding (note 11)                      -                -
   Common stock, $.10 par value, 4,000,000 shares
     authorized, 1,190,250 shares issued and outstanding (note 12)       119,025          119,025
   Additional paid-in capital                                         10,971,714       10,964,983
   Retained earnings (note 9)                                          6,809,054        6,935,879
   Unearned ESOP shares (note 12)                                       (630,000)        (720,000)
   Unearned compensation (note 12)                                      (371,304)            -
   Treasury stock, at cost; 206,918 shares                            (2,502,009)            -
   Net unrealized holding gains on investment
     and mortgage-backed securities available for sale                    43,424           21,871
                                                                    ------------       ----------  
         Total stockholders' equity                                   14,439,904       17,321,758

Commitments and contingencies (notes 4, 12, and 16)
                                                                    ------------       ----------  
         Total liabilities and stockholders' equity                 $ 80,282,540       79,822,368
                                                                    ============       ==========

</TABLE>

                                     - 14 -


<PAGE>



                               CCF HOLDING COMPANY AND SUBSIDIARIES

                                 Consolidated Statements of Income

                          Years ended September 30, 1996, 1995, and 1994
<TABLE>
<CAPTION>
                                                                  1996           1995       1994
                                                                  ----           ----       ----
Interest and dividend income:
<S>                                                            <C>          <C>          <C>      
   Loans (including fees)                                      $3,844,033    3,577,601    3,683,255
   Interest-bearing deposits in other financial institutions      116,986      217,758       95,631
   Investment securities - taxable                                909,504      722,758      602,481
   Investment securities - nontaxable                              11,152         --           --
   Mortgage-backed securities                                     617,592      428,325      438,002
   Dividends on Federal Home Loan Bank stock                       73,508       74,399       52,442
                                                               ----------   ----------   ----------
         Total interest and dividend income                     5,572,775    5,020,841    4,871,811
                                                               ----------   ----------   ----------

Interest expense:
   Deposit accounts (note 8)                                    2,510,350    2,478,869    2,244,760
   Federal Home Loan Bank advances                                 16,444         --           --
                                                               ----------   ----------   ----------
         Total interest expense                                 2,526,794    2,478,869    2,244,760
                                                               ----------   ----------   ----------

         Net interest income                                    3,045,981    2,541,972    2,627,051

Provision for loan losses (note 4)                                129,831        5,040       68,665
                                                               ----------   ----------   ----------
         Net interest income after provision for
            loan losses                                         2,916,150    2,536,932    2,558,386
                                                               ----------   ----------   ----------
Other income:
   Loan fees and service charges on deposit accounts              268,780      257,688      235,306
   Rental income                                                   49,279       51,335       45,890
   Gain on sale of loans                                           36,435         --         52,900
   Net gain on sale of investment and
     mortgage-backed securities                                    15,119         --           --
   Other                                                           45,192       18,256       11,843
                                                               ----------   ----------   ----------
         Total other income                                       414,805      327,279      345,939
                                                               ----------   ----------   ----------
Other expenses:
   Salaries and employee benefits (note 12)                     1,188,265    1,031,018    1,004,118
   Occupancy                                                      466,760      440,920      379,671
   Federal insurance premiums                                     146,693      140,858      156,771
   Savings Association Insurance Fund assessment
     (note 17)                                                    397,568         --           --
   Other                                                          515,833      354,867      363,296
                                                               ----------   ----------   ----------
         Total other expenses                                   2,715,119    1,967,663    1,903,856
                                                               ----------   ----------   ----------
         Income before income taxes and cumulative
            effect of change in accounting principle              615,836      896,548    1,000,469

Income tax expense (note 9)                                       142,500      293,000      363,000
                                                               ----------   ----------   ----------
         Income before cumulative effect of change
            in accounting principle, carried forward           $  473,336      603,548      637,469
                                                               ----------   ----------   ----------
</TABLE>


                                                                    (Continued)

                                     - 15 -


<PAGE>



                               CCF HOLDING COMPANY AND SUBSIDIARIES

                                 Consolidated Statements of Income
<TABLE>
<CAPTION>

                                                             1996           1995       1994
                                                             ----           ----       ----
<S>                                                     <C>          <C>          <C>    
         Income before cumulative effect of change
            in accounting principle, brought forward    $  473,336      603,548      637,469

Cumulative effect of change in accounting principle
   (note 9)                                                   --           --        206,452
                                                        ----------   ----------   ----------

         Net income                                     $  473,336      603,548      431,017
                                                        ==========   ==========   ==========

Net income per share (note 14)                          $      .45          .19         --
                                                        ==========   ==========   ==========

Weighted average shares outstanding (notes 12 and 14)    1,061,455    1,118,250         --
                                                        ==========   ==========   ==========

</TABLE>

See accompanying notes to consolidated financial statements.

                                     - 16 -


<PAGE>
                      CCF HOLDING COMPANY AND SUBSIDIARIES

                 Consolidated Statements of Stockholders' Equity

                 Years ended September 30, 1996, 1995, and 1994

<TABLE>
<CAPTION>
                                                                                                                          
                                                                                                                          
                                                                                                                       
                                       Preferred stock     Common stock      Additional            Unearned               
                                       ---------------  ------------------    paid-in    Retained    ESOP       Unearned  
                                       Shares Amount    Shares      Amount    capital    earnings   shares    compensation
                                       -------------    ------      ------    -------    --------   -------   ------------

<S>                                      <C>   <C>   <C>          <C>        <C>        <C>         <C>        <C>        
Balance, September 30, 1993               --   $--      --        $   --         --     $5,901,314      --         --     
Net income                                --    --      --            --         --        431,017      --         --     
Implementation of change                              
  in accounting for                                   
  investment and                                      
  mortgage-backed                                     
  securities available                                
  for sale, net of tax                                
  effect of $71,642                       --    --      --            --         --          --          --        --     
                                         ---   ---   ---------  ----------   ----------  ---------  --------   --------   
                                                      
Balance, September 30, 1994               --    --      --            --         --      6,332,331       --        --     
                                                      
Proceeds from sale of                                 
  common stock, net of issuance                       
  costs (note 14)                         --    --   1,190,250     119,025   10,964,983      --     (720,000)      --     
Unrealized gains on                                   
  investment and mortgage-backed                      
  securities available for sale,                      
  net of tax effect                       --    --      --            --          --         --          --         --    
Net income                                --    --      --            --          --       603,548       --         --    
                                         ---   ---   ---------  ----------   ----------  ---------  --------   --------   

Balance, September 30, 1995               --    --   1,190,250     119,025   10,964,983  6,935,879  (720,000)       --    
                                                      
Treasury stock purchased                  --    --      --            --          --         --          --         --    
Unrealized gains on investment                        
  and mortgage-backed                                 
  securities available                                
  for sale, net of tax effect             --    --      --            --          --         --          --         --    
Dividends declared, $0.55 per share       --    --      --            --          --      (600,161)      --         --
ESOP shares allocated                     --    --      --            --         11,372      --       90,000        --    
Unearned compensation                                 
  under management stock                              
  bonus plan                              --    --      --            --         (4,641)     --          --    (371,304)  
Net income                                --    --      --            --          --       473,336       --         --    
                                         ---   ---   ---------   ---------   ----------  ---------  --------   --------   
                                                      
Balance, September 30, 1996               --   $--   1,190,250    $119,025   10,971,714  6,809,054  (630,000)  (371,304)  
                                         ===   ===   =========   =========   ==========  =========  ========   ========   
                                                    
</TABLE>


<TABLE>
<CAPTION>
                                                                Net unrealized
                                                                   holding      
                                                                gains (losses)
                                           Treasury stock       on securities
                                        --------------------      available
                                        Shares      Amount        for sale       Total
                                        ------   -----------      --------       -----

<S>                                     <C>     <C>             <C>           <C>       
Balance, September 30, 1993                 --  $     --             --         5,901,314
Net income                                  --        --             --           431,017
Implementation of change              
  in accounting for                   
  investment and                      
  mortgage-backed                     
  securities available                
  for sale, net of tax                
  effect of $71,642                         --        --         (118,289)       (118,289)
                                        ------- -----------        ------      ----------
                                      
Balance, September 30, 1994                 --        --         (118,289)      6,214,042
                                      
Proceeds from sale of                 
  common stock, net of issuance       
  costs (note 14)                           --        --              --       10,364,008
Unrealized gains on                   
  investment and mortgage-backed      
  securities available for sale,      
  net of tax effect                         --         --         140,160         140,160
Net income                                  --         --             --          603,548
                                        ------- -----------        ------      ----------

Balance, September 30, 1995                 --         --          21,871      17,321,758
                                      
Treasury stock purchased                190,250  (2,299,490)          --       (2,299,490)
Unrealized gains on investment        
  and mortgage-backed                 
  securities available                
  for sale, net of tax effect               --         --          21,553          21,553
Dividends declared, $0.55 per share         --         --             --         (600,161)
ESOP shares allocated                       --         --             --          101,372
Unearned compensation                 
  under management stock              
  bonus plan                             16,668    (202,519)          --         (578,464)
Net income                                  --         --             --          473,336
                                        ------- -----------        ------      ----------
                                      
Balance, September 30, 1996             206,918 $(2,502,009)       43,424      14,439,904
                                        ======= ===========        ======      ==========
                                                    
</TABLE>

See accompanying notes to consolidated financial statements.

                                      -17-
<PAGE>



                      CCF HOLDING COMPANY AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows

                 Years ended September 30, 1996, 1995, and 1994
<TABLE>
<CAPTION>
                                                             1996           1995       1994
                                                             ----           ----       ----
Cash flows from operating activities:
<S>                                                       <C>            <C>          <C>    
Net income                                                $ 473,336      603,548      431,017
Adjustments to reconcile net income to net cash
  provided by operating activities:
    Provision for loan losses                               129,831        5,040       68,665
    Depreciation expense                                    112,357      109,019       87,709
    Accretion of discounts                                  (18,562)     (18,083)     (27,405)
    Amortization of premiums                                 36,829       32,424       70,481
    Amortization of unearned compensation                    37,591         --           --
    Net gain on sale of investment securities and
     mortgage-backed securities                             (15,119)        --           --
    Amortization of deferred loan fees                     (115,856)     (83,683)    (107,239)
    Deferred income tax (benefit) expense                  (308,683)       4,784      (47,819)
    Gain on sale of loans                                   (36,435)        --        (52,900)
    Federal Home Loan Bank stock dividends                     --           --        (25,000)
    Cumulative effect of change in accounting principle        --           --        206,452
    Decrease (increase) in accrued interest and
     dividends receivable                                    13,776      (38,011)          30
    Decrease (increase) in other assets                      16,658       (8,388)      20,872
    Dividend payable to management stock bonus plan           6,188         --           --
    Savings Association Insurance Fund assessment
     payable                                                397,568         --           --
    Increase (decrease) in other liabilities                137,895      (97,673)      74,023
                                                          ---------    ---------    ---------
        Net cash provided by operating activities           867,374      508,977      698,886
                                                          ---------    ---------    ---------
</TABLE>

                                                                   (Continued)
                                     - 18 -

<PAGE>



                      CCF HOLDING COMPANY AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>

                                                               1996           1995           1994
                                                               ----           ----           ----

<S>                                                        <C>             <C>            <C>      
Cash flows from investing activities:
   Proceeds from maturing investment securities
     available for sale and certificates of deposit        $ 1,576,924      2,000,000      2,496,875
   Proceeds from sales of investment securities
     available for sale                                      3,000,312           --             --
   Proceeds from maturing and called investment
     securities held to maturity                             3,992,875           --             --
   Purchases of investment securities available for sale    (1,632,419)          --             --
   Purchases of investment securities held to maturity      (4,363,209)    (4,658,756)    (5,951,562)
   Principal repayments on mortgage-backed securities
     available for sale                                        204,836         96,647           --
   Proceeds from sales of mortgage-backed securities
     available for sale                                        371,705           --             --
   Principal repayments on mortgage-backed securities
     held to maturity                                        1,746,401        793,193      2,243,040
   Purchases of mortgage-backed securities available
     for sales                                              (1,823,455)          --             --
   Purchases of mortgage-backed securities held to
     maturity                                               (2,853,402)    (1,988,836)    (2,013,734)
   Loan (originations) repayments, net                      (8,735,992)      (949,176)       383,159
   Proceeds from sale of loans                               2,455,221           --        2,719,470
   Purchases of premises and equipment                        (366,169)       (62,848)      (459,588)
   Proceeds from disposal of premises and equipment               --            6,770           --
   Sale of real estate owned                                    75,626           --             --
                                                           -----------    -----------    -----------
           Net cash used in investing activities            (6,350,746)    (4,763,006)      (582,340)
                                                           -----------    -----------    -----------

Cash flows from financing activities:
   Net increase (decrease) in savings and demand
     deposit accounts                                        1,317,457     (2,908,149)        27,947
   Net (decrease) increase in certificates of deposit         (627,298)     2,441,430     (2,480,064)
   (Decrease) increase in advance payments by
     borrowers for property taxes and insurance               (131,745)       109,342        (56,931)
   Treasury stock purchased                                 (2,299,490)          --             --
   Federal Home Loan Bank advances                           2,500,000           --             --
   Proceeds from sale of common stock, net of
     issuance costs                                               --       10,364,008           --
   Dividends paid                                             (600,161)          --             --
   Contribution to management stock bonus plan                (578,464)          --             --
   ESOP shares allocated                                       101,372           --             --
                                                           -----------    -----------    -----------
          Net cash (used in) provided by financing
             activities                                       (318,329)    10,006,631     (2,509,048)
                                                           -----------    -----------    -----------
          (Decrease) increase in cash and cash
             equivalents                                    (5,801,701)     5,752,602     (2,392,502)

Cash and cash equivalents at beginning of year               8,447,446      2,694,844      5,087,346
                                                           -----------    -----------    -----------

Cash and cash equivalents at end of year                   $ 2,645,745      8,447,446      2,694,844
                                                           ===========    ===========    ===========
</TABLE>


                                                                    (Continued)

                                     - 19 -


<PAGE>



                      CCF HOLDING COMPANY AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>

                                                              1996           1995         1994
                                                              ----           ----         ----

Supplemental disclosure of cash flow information:
<S>                                                     <C>             <C>          <C>      
   Interest paid                                        $   2,531,331     2,480,389    2,244,760
                                                            =========   ===========    =========

   Income taxes paid                                    $     297,368       295,000      389,100
                                                           ==========   ===========    =========

Supplemental disclosures of noncash investing 
and financing activities:
     Real estate acquired through foreclosure of
       the loan receivable                              $          -         75,626           -
                                                           ==========   ===========    =========

     Transfer of investment securities from held to
       maturity to available for sale upon adoption
       of SFAS No. 115 (note 1)                         $          -             -     7,012,628
                                                           ==========   ===========    =========

     Transfer of mortgage-backed securities from
       held to maturity to available for sale upon
       adoption of SFAS No. 115 (note 1)                $          -             -       599,436
                                                           ==========   ===========    =========

     Transfer of investment securities from held to
       maturity to available for sale at September 30,
       1996 (note 2)                                    $   9,270,179            -            -
                                                            =========   ===========    =========

     Transfer of mortgage-backed securities from held
       to maturity to available for sale at September
       30, 1996 (note 3)                                $   8,284,643            -            -
                                                            =========   ===========    =========
</TABLE>


See accompanying notes to consolidated financial statements.

                                     - 20 -


<PAGE>



                             CCF HOLDING COMPANY AND SUBSIDIARIES

                          Notes to Consolidated Financial Statements

                              September 30, 1996, 1995, and 1994

(1)   Summary of Significant Accounting Policies
      ------------------------------------------

      CCF Holding Company (the "Parent"),  a federally  chartered thrift holding
      company, is a Georgia  corporation  organized in March 1995 to acquire all
      of the common stock of Clayton County Federal Savings and Loan Association
      (the  "Association").  On July 11, 1995,  the Parent  completed an initial
      public  offering of common  stock and raised  $10,364,008  in net proceeds
      through  the  issuance  of  1,190,250  common  shares,  at $10 per  share.
      Concurrently,  the  Association  completed a  conversion  from a Federally
      chartered  mutual savings and loan  association  to a Federally  chartered
      stock  savings  and loan  association.  Upon the  conversion,  the  Parent
      acquired  all of the  outstanding  common  stock  of the  Association  for
      $5,182,004, at which time the Association became a wholly owned subsidiary
      of the  Parent.  Since the Parent and the  Association  were under  common
      control,  the transaction was accounted for at historical cost in a manner
      similar to a  pooling-of-interests.  The Parent and the  Association  (the
      "Company")  are  primarily  regulated by the Office of Thrift  Supervision
      ("OTS")  and the  Federal  Deposit  Insurance  Corporation  ("FDIC"),  and
      undergo periodic examinations by these regulatory authorities.

      The Company primarily  provides  single-family  residential first mortgage
      loans and offers various deposit products to individual  customers through
      its main office in Jonesboro,  Georgia and two branch  offices  located in
      Clayton  County,  Georgia.  The  Company  primarily  competes  with  other
      financial  institutions in its market area, which it considers to be South
      Metropolitan   Atlanta.   CCF  Financial   Services,   Inc.   ("CFS")  was
      incorporated  in 1996 as a new,  wholly owned service  corporation  of the
      Association,  created  for the  purpose  of  engaging  in  securities  and
      investment advisory  activities.  CFS has engaged an unrelated third party
      to provide securities and investment advisory services to customers of the
      Association and the general public.

      (a) Basis of Presentation
          ---------------------
 
          The  accounting  and  reporting  policies  of the  Company  conform to
          generally accepted accounting  principles and to prevailing  practices
          within the financial institutions industry. The following is a summary
          of the  significant  accounting  policies that the Company  follows in
          preparing and presenting its consolidated financial statements.

          The  consolidated  financial  statements  include the  accounts of the
          Parent,  the  Association,   and  CFS.  All  significant  intercompany
          accounts and transactions are eliminated in preparing the consolidated
          financial statements.

                                                                    (continued)

                                      - 21 -

<PAGE>



                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

          In preparing  the  consolidated  financial  statements,  management is
          required to make  estimates and  assumptions  that affect the reported
          amounts of assets and  liabilities as of the date of the balance sheet
          and revenues and expenses for the period.  Actual results could differ
          significantly from those estimates.  One estimate that is particularly
          susceptible  to a  significant  change in the near term relates to the
          determination of the allowance for loan losses. In connection with the
          determination  of the  allowance for loan losses,  management  obtains
          independent appraisals for significant properties. Management believes
          that the allowance for loan losses is adequate.  While management uses
          available  information to recognize losses on loans,  future additions
          to the  allowance  may be  necessary  based  on  changes  in  economic
          conditions.  In addition,  various regulatory agencies, as an integral
          part of their examination  process,  periodically review the Company's
          allowance  for loan losses.  Such  agencies may require the Company to
          recognize  additions to the allowance  based on their  judgment  about
          information available to them at the time of their examination.

      (b) Cash and Cash Equivalents
          -------------------------

          For purposes of the consolidated statements of cash flows, the Company
          considers  amounts  due from banks and  interest-bearing  deposits  in
          other  financial  institutions  to  be  cash  equivalents.  Generally,
          interest-bearing  deposits  in other  financial  institutions  are for
          one-day periods.

      (c) Investment and Mortgage-Backed Securities
          -----------------------------------------

          The  Company   adopted  the   provisions  of  Statement  of  Financial
          Accounting   Standards  ("SFAS")  No.  115,  "Accounting  for  Certain
          Investments  in Debt and Equity  Securities"  at  September  30, 1994.
          Under SFAS No. 115, the Company  must  classify  its  investments  and
          mortgage-backed securities in three categories: trading, available for
          sale,  or held to  maturity.  Trading  securities  are bought and held
          principally  for the purpose of selling them in the near term. Held to
          maturity securities are those securities for which the Company has the
          ability  and intent to hold the  security  until  maturity.  All other
          securities   not  classified  as  trading  or  held  to  maturity  are
          classified as available for sale.

          Investment  securities held to maturity are carried at cost,  adjusted
          for amortization of premiums and accretion of discounts over the terms
          of the related securities. Mortgage-backed securities held to maturity
          are carried at unpaid  principal  balances  adjusted  for  unamortized
          premiums and unaccreted discounts.

          Available  for  sale   securities  are  reported  at  fair  value,  as
          determined by independent quotations, with unrealized holding gains or
          losses,  net of the related  income  taxes,  excluded  from income and
          reported  as a  separate  component  of  stockholders'  equity,  until
          realized.  Any  unrealized  holding  gains or losses  included  in the
          separate  component of  stockholders'  equity  relating to  securities
          subsequently  transferred  from available for sale to held to maturity
          are  maintained  and amortized  into income over the remaining life of
          the security as an adjustment to yield in a manner consistent with the
          amortization or accretion of the premium or discount on the associated
          security.  A decline in the market value below cost of any  investment
          or  mortgage-backed  security  that is deemed other than  temporary is
          charged to income,  resulting in the establishment of a new cost basis
          for the security.

                                                                    (Continued)

                                     - 22 -


<PAGE>



                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

          Upon adoption of SFAS No. 115, the Company transferred  investment and
          mortgage-backed  securities previously accounted for at amortized cost
          totaling  $7,612,064 to available for sale at September 30, 1994.  The
          estimated fair value of such  securities at September 30, 1994 totaled
          $7,422,133,  and the Company  reported the effect of the change in the
          method  of  accounting  for  these   investment  and   mortgage-backed
          securities as a separate  component of stockholders'  equity.  The net
          unrealized  holding  losses  on  securities   available  for  sale  at
          September  30,  1994  amounted  to  $118,289,  net of income  taxes of
          $71,642.

          Purchase  premiums and discounts are amortized or accreted to interest
          income over the life of the related security as an adjustment to yield
          using the effective interest method. For  mortgage-backed  securities,
          such   amortization   and   accretion   is   determined   taking  into
          consideration  assumed  prepayment  patterns.  Dividend  and  interest
          income  are  recognized  when  earned.  Realized  gains and losses for
          securities  sold are  included  in income on the trade  date,  and are
          derived using the specific  identification  method for determining the
          cost of securities sold.

      (d) Loans
          -----

          Loans are  stated at their  unpaid  principal  balances,  less,  where
          applicable, undisbursed proceeds on loans in process, unamortized loan
          origination fees, and allowance for loan losses.

          Loan   origination   fees  collected,   net  of  certain  direct  loan
          origination  costs,  are deferred and recognized into income using the
          interest  method as an  adjustment  of the yield over the lives of the
          underlying loans.

          The Company  extends  credit to customers  throughout its market area,
          which  includes  Clayton,  Henry,  and Fayette  Counties.  Most of the
          Company's  loans are secured by real estate in these Georgia  counties
          and a  substantial  portion  of its  borrowers'  ability to repay such
          loans is dependent upon the economy in the Company's market area.

          The allowance for loan losses is adjusted through  provisions for loan
          losses  charged to  operations.  Loans are  charged  off  against  the
          allowance for loan losses when management believes that the collection
          of the principal is unlikely.  Subsequent  recoveries are added to the
          allowance.  The allowance is an amount that  management has determined
          to be adequate  through its allowance for loan losses  methodology  to
          absorb losses  inherent in existing  loans and  commitments  to extend
          credit.  The allowance is  determined  through  consideration  of such
          factors as changes in the nature and volume of the portfolio,  overall
          portfolio quality,  delinquency trends,  adequacy of collateral,  loan
          concentrations,  specific problem loans, and economic  conditions that
          may affect the borrowers' ability to pay.

                                                                    (Continued)

                                     - 23 -


<PAGE>



                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

          During 1993, the Financial  Accounting  Standards  Board (FASB) issued
          SFAS No. 114, "Accounting by Creditors for Impairment of a Loan." SFAS
          No. 114 requires  impaired  loans to be measured  based on the present
          value  of  expected  future  cash  flows,  discounted  at  the  loan's
          effective  interest rate, or at the loan's observable market price, or
          the fair value of the collateral if the loan is collateral  dependent,
          beginning in fiscal  1996.  Loans that are  determined  to be impaired
          require a valuation allowance  equivalent to the amount of impairment.
          The  valuation  allowance  is to be  established  by a  charge  to the
          provision for loan losses.  In October 1994,  the FASB issued SFAS No.
          118,  "Accounting  by  Creditors  for  Impairment  of a Loan -  Income
          Recognition and  Disclosures,"  which amends the  requirements of SFAS
          No. 114 regarding  interest income  recognition and related disclosure
          requirements.  The  Company  adopted  SFAS No.  114 and  SFAS No.  118
          prospectively  on October 1, 1995,  and based on the level of impaired
          loans, the effect of adoption was not material.

          A loan is considered  impaired when, based on current  information and
          events,  it is probable that the Company will be unable to collect all
          amounts due according to the contractual  terms of the note agreement.
          Cash  receipts  on  impaired  loans which are  accruing  interest  are
          applied to principal and interest under the  contractual  terms of the
          loan  agreement.  Cash receipts on impaired loans which the accrual of
          interest  has been  discontinued  are applied to reduce the  principal
          amount of such loans until the  principal  has been  recovered and are
          recognized as interest income thereafter.

          Additional  funds  for  lending  are  provided  by  selling  whole and
          participating  interests in real estate loans.  Gains or losses on the
          sale of such loans are recognized at settlement dates and are computed
          as the difference between the sales proceeds and the carrying value of
          the  loans.  Such gains or losses  are  adjusted  by the amount of any
          excess  servicing  fee  receivables  or  payables  resulting  from the
          transactions.  Such excess  servicing fee  receivables or payables are
          amortized  using  a  method  approximating  a  level  yield  over  the
          estimated  remaining life of such loans,  taking into account  assumed
          prepayment patterns.

          Interest income is recognized  using the simple interest method on the
          balance of the principal amount  outstanding.  The accrual of interest
          income is discontinued on loans which become contractually past due by
          90 days.  Interest  previously  accrued but not  collected is reversed
          against  current period  interest income when such loans are placed on
          nonaccrual  status.  Interest accruals are recorded on such loans only
          when they are brought  fully  current  with  respect to  interest  and
          principal  and when,  in the  judgment  of  management,  the loans are
          estimated to be fully collectible as to both principal and interest.

      (e) Premises and Equipment
          ----------------------
 
          Premises   and   equipment   are  stated  at  cost  less   accumulated
          depreciation.  Depreciation is recorded on a straight-line  basis over
          the estimated useful lives of the related assets.


                                                                    (Continued)

                                     - 24 -


<PAGE>



                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

      (f) Real Estate Owned
          -----------------

          Real estate  acquired  through  foreclosure,  consisting of properties
          obtained  through  foreclosure  proceedings or acceptance of a deed in
          lieu of foreclosure,  is reported on an individual  asset basis at the
          lower  of cost or fair  value,  less  disposal  costs.  Fair  value is
          determined on the basis of current  appraisals,  comparable sales, and
          other  estimates  of  value  obtained   principally  from  independent
          sources. When properties are acquired through foreclosure,  any excess
          of the loan balance at the time of foreclosure  over the fair value of
          the real estate held as collateral  is  recognized  and charged to the
          allowance  for loan losses.  Subsequent  write-downs  are charged to a
          separate  allowance  for  losses  pertaining  to  real  estate  owned,
          established  through  provisions  for estimated  losses on real estate
          owned charged to operations. Based upon management's evaluation of the
          real  estate  acquired  through  foreclosure,  additional  expense  is
          recorded  when  necessary  in an  amount  sufficient  to  restore  the
          allowance to an adequate level. Gains recognized on the disposition of
          the properties are recorded in other income.

          Costs of  improvements  to real  estate are  capitalized,  while costs
          associated with holding the real estate are charged to operations.

      (g) Income Taxes
          ------------

          Effective   October  1,  1993,  the  Company  adopted  SFAS  No.  109,
          "Accounting  for Income  Taxes," by electing to report the  cumulative
          effect of the change in accounting principle,  and did not restate any
          prior periods.  The cumulative  effect of the change in accounting for
          income  taxes was an increase in the net  deferred  tax  liability  of
          $206,452,  which was reported separately in the consolidated statement
          of income for the year ended September 30, 1994.

          Income taxes are accounted  for under the asset and liability  method.
          Deferred tax assets and  liabilities are recognized for the future tax
          consequences   attributable  to  temporary   differences  between  the
          financial   statement   carrying   amounts  of  existing   assets  and
          liabilities  and their  respective tax bases.  Deferred tax assets and
          liabilities  are measured using enacted tax rates expected to apply to
          taxable income in the years in which those  temporary  differences are
          expected to be recovered or settled. The effect on deferred taxes of a
          change  in tax  rates is  recognized  in  income  in the  period  that
          includes the enactment date.

      (h) Net Income Per Share
          --------------------

          Net income per common share is based on the weighted average number of
          shares  outstanding  during each  period  including  consideration  of
          common stock equivalents  derived from dilutive stock options.  During
          1996, the dilutive effect of the stock options was not significant.


                                                                    (Continued)

                                     - 25 -


<PAGE>



                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

      (i) Recent Accounting Pronouncement
          -------------------------------

          In  October  1995,  the FASB  issued  SFAS No.  123,  "Accounting  for
          Stock-Based   Compensation."   SFAS  No.  123  established   financial
          accounting   and   reporting   standards  for   stock-based   employee
          compensation  plans.  Those plans  include all  arrangements  by which
          employees  receive shares of stock or other equity  instruments of the
          employer or the employer  incurs  liabilities  to employees in amounts
          based on the price of the employer's stock.  Such instruments  include
          stock purchase  plans,  stock  options,  restricted  stock,  and stock
          appreciation  rights.  SFAS No. 123 also  applies to  transactions  in
          which an entity  issues its  equity  instruments  to acquire  goods or
          services from nonemployees.

          A new method of accounting for stock-based  compensation  arrangements
          with  employees  is  established  by SFAS No. 123. The new method is a
          fair value based method rather than the intrinsic  value based method.
          However, SFAS No. 123 does not require an entity to adopt the new fair
          value based  method for  purposes  of  preparing  its basic  financial
          statements. Entities are allowed (1) to continue to use their existing
          method or (2) adopt the SFAS No.  123 fair  value  based  method.  The
          selected method would apply to all of an entity's  compensation  plans
          and transactions.

          SFAS No. 123 requires that an employer's  financial statements include
          certain   disclosures   about   stock-based   employee    compensation
          arrangements  regardless  of the method used to account for them.  The
          accounting   requirements   of  this   statement   are  effective  for
          transactions  entered into in fiscal  years that begin after  December
          15, 1995.  The  disclosure  requirements  are  effective for financial
          statements  for fiscal years  beginning  after  December 15, 1995. The
          Company has not determined the impact of adopting SFAS No. 123.

(2)   Investment Securities
      ---------------------

     At September 30, 1996 and 1995,  investment  securities  available for sale
     consisted of the following:
<TABLE>
<CAPTION>
                                                           September 30, 1996
                                                 --------------------------------------------
                                                              Gross      Gross
                                                 Amortized unrealized unrealized    Fair
                                                   cost       gains     losses      value
                                                   ----       -----     ------      -----
<S>                                          <C>              <C>       <C>       <C>       
      U.S. Treasury and U.S. Government
         agency obligations                  $  11,405,631     11,699    83,549   11,333,781
      Equity security                              782,790    387,335        -     1,170,125
      Municipal securities                         868,807         -     19,332      849,475
                                               -----------   --------  --------  -----------

                                             $  13,057,228    399,034   102,881   13,353,381
                                             =============    =======   =======   ==========
</TABLE>



                                                                    (Continued)

                                     - 26 -


<PAGE>



                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
<TABLE>
<CAPTION>
                                                           September 30, 1995
                                                 ----------------------------------------------
                                                              Gross       Gross
                                                 Amortized unrealized  unrealized    Fair
                                                   cost       gains      losses      value
                                                   ----       -----      ------      -----
<S>                                          <C>              <C>         <C>      <C>      
      U.S. Treasury and U.S. Government
         agency obligations                  $   6,008,546    12,387      20,470   6,000,463
      Equity security                              644,550    45,450          -      690,000
                                                ----------    ------      ------  ----------

                                             $   6,653,096    57,837      20,470   6,690,463
                                             =============    ======      ======   =========
</TABLE>

     At September 30, 1996, the Company  transferred  all investment  securities
     held to maturity to available for sale.  At September 30, 1995,  investment
     securities held to maturity consisted of the following:
<TABLE>
<CAPTION>
                                                           September 30, 1995
                                                 --------------------------------------------
                                                              Gross       Gross
                                                 Amortized unrealized  unrealized    Fair
                                                   cost       gains      losses      value
                                                   ----       -----      ------      -----
<S>                                         <C>              <C>         <C>      <C>      

      U.S. Treasury and U.S. Government
         agency obligations                  $   8,980,890    25,398      55,350   8,950,938
                                                 =========    ======      ======   =========
</TABLE>

     In 1996, the Company sold certain investment  securities available for sale
     for  $3,000,312,  and  recognized a net loss of $1,815.  In  addition,  the
     Company  recognized  a gain of $7,125  on an  investment  security  held to
     maturity and called during 1996 for $492,875.  The Company did not sell any
     investment securities in 1995 or 1994.

     The amortized  cost and fair values of  investments  in debt  securities at
     September  30,  1996 by  contractual  maturity  are shown  below.  Expected
     maturities may differ from  contractual  maturities  because  borrowers may
     have the  right  to call or  prepay  obligations  with or  without  call or
     prepayment penalties. 
<TABLE>
<CAPTION>
                                                                  Investments
                                                               available for sale
                                                               ------------------
                                                             Amortized
                                                               cost    Fair value
                                                          ------------ ----------

<S>                                                       <C>           <C>      
             Due within one year                          $  1,420,936   1,419,877
             Due after one year through five years          10,234,695  10,163,904
             Due after five years                              618,807     599,475
                                                             ---------   ---------

                                                          $ 12,274,438  12,183,256
                                                          ============  ==========
</TABLE>

     A U.S. Treasury investment security, with a fair value of $487,650 has been
     pledged as of September 30, 1996 to secure public  deposits.  There were no
     investment securities pledged at September 30, 1995.


                                                                     Continued)

                                     - 27 -


<PAGE>
                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(3)   Mortgage-Backed Securities
      --------------------------

     At September 30, 1996 and 1995,  mortgage-backed  securities  available for
     sale consisted of the following:
<TABLE>
<CAPTION>
                                                                         September 30, 1996
                                                   ----------------------------------------------------------------- 
                                                        Unpaid                   Gross        Gross
                                                       principal   Amortized   unrealized   unrealized      Fair
                                                        balance       cost       gains        losses        value
                                                        -------       ----       -----        ------        -----
<S>                                                 <C>          <C>             <C>         <C>     <C>      
Government National Mortgage Association
  Participation  Certificates with interest rates
  primarily  ranging from 6.5% to 10.5%,
  with  scheduled principal maturities at
  various times through 2024                        $ 1,666,901   1,664,651      12,057      92,152   1,584,556
Federal Home Loan Mortgage  Corporation
  Participation  Certificates  with interest rates
  ranging from 5.5% to 10.0%,  with  scheduled
  principal maturities at various times through
  2009                                                3,259,873   3,229,350      41,309      69,656   3,201,003
Federal National Mortgage  Association
  Participation  Certificates,  with interest rates
  ranging  from  5.5% to 7.8%  with  scheduled
  principal maturities at various times through
  2023                                                5,351,084   5,357,364       2,199     120,186   5,239,377
                                                    -----------  ----------      ------     -------  ----------

                                                    $10,277,858  10,251,365      55,565     281,994  10,024,936
                                                    ===========  ==========      ======     =======  ==========
</TABLE>

<TABLE>
<CAPTION>

                                                                                September 30, 1995
                                                              ---------------------------------------------------------
                                                                Unpaid                 Gross       Gross
                                                              principal  Amortized  unrealized   unrealized    Fair
                                                               balance    cost         gains       losses      value
                                                               -------    ----         -----       ------      -----

<S>                                                            <C>        <C>                 <C>           <C>    
      Federal Home Loan Mortgage  Corporation  
        Participation  Certificates  with
        interest rates ranging from 7% to 8%, with scheduled
        principal maturities through 1996                      $487,610   495,379         -   2,249         493,130
                                                                =======   =======        ===  =====         =======
</TABLE>


                                                                   (Continued)

                                     - 28 -


<PAGE>



                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


     At  September  30,  1996,  the  Company   transferred  all  mortgage-backed
     securities  held to maturity to available  for sale. At September 30, 1995,
     mortgage-backed securities to be held to maturity consist of the following:
<TABLE>
<CAPTION>
                                                                                              September 30, 1995
                                                                            --------------------------------------------------------
                                                                              Unpaid                 Gross       Gross
                                                                             principal  Amortized  unrealized  unrealized    Fair
                                                                              balance    cost        gains       losses      value
                                                                              -------    ----        -----       ------      -----
<S>                                                                         <C>         <C>          <C>          <C>      <C>      
Government National Mortgage Association  Participation  Certificates with                           
  interest  rates  primarily  ranging from 6.5% to 10.5%,  with  scheduled
  principal maturities at various times through 2024                        $1,424,629  1,447,053     31,597      26,553   1,452,097
Federal Home Loan Mortgage  Corporation  Participation  Certificates  with             
  interest  rates  ranging from 5.5% to 10.0%,  with  scheduled  principal             
  maturities at various times through 2009                                   2,540,502  2,509,000     76,392       9,435   2,575,957
Federal National  Mortgage  Association  Participation  Certificates  with             
  interest  rates  ranging  from  5.8% to 7.8%  with  scheduled  principal             
  maturities at various times through 2023                                   3,424,127  3,446,891     18,486      28,428   3,436,949
                                                                             --------- ----------  ---------   ---------   ---------
                                                                                       
                                                                            $7,389,258  7,402,944    126,475      64,416   7,465,003
                                                                            ==========  =========    =======      ======   =========
</TABLE>

      There were no mortgage-backed  securities pledged at September 30, 1996 or
1995.

In 1996,  the  Company  sold for  $371,705  certain  mortgage-backed  securities
available for sale and recognized a net gain of $9,809. The Company did not sell
any mortgage-backed securities in 1995 or 1994.

(4)   Loans Receivable

      At  September  30,  1996  and  1995,  loans  receivable  consisted  of the
following:
<TABLE>
<CAPTION>
                                                                      1996           1995
                                                                      ----           ----
<S>                                                               <C>             <C>       
         First mortgage loans, substantially secured
            by single family residential dwellings                $ 45,509,936    42,754,387
         Real estate construction loans                              7,056,182     2,777,026
         Other mortgage loans                                        2,698,314     1,719,961
         Consumer and other installment loans                        1,065,437       723,555
                                                                   -----------   -----------
                                                                    56,329,869    47,974,929

         Less:
            Undisbursed proceeds on loans in process                 3,789,924     1,937,278
            Unamortized loan origination fees, net                     500,080       432,460
            Allowance for loan losses                                  540,291       408,848
                                                                   -----------   -----------

                                                                  $ 51,499,574    45,196,343
                                                                   ===========    ==========
</TABLE>


                                                                   (Continued)

                                     - 29 -


<PAGE>
                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

     At September 30, 1996, the Company had outstanding commitments to originate
     adjustable  rate loans  totaling  $538,920  and fixed  rate loans  totaling
     $298,000 for varying terms.

     As of September 30, 1996 and 1995,  loan  participations  sold to,  without
     recourse, and serviced for others amounted to approximately  $8,320,000 and
     $7,060,000, respectively.

     The following is a summary of transactions in the allowance for loan losses
     for the years ended September 30, 1996, 1995, and 1994:
<TABLE>
<CAPTION>

                                                              1996         1995       1994
                                                              ----         ----       ----
<S>                                                       <C>             <C>        <C>    
         Balance at beginning of year                     $   408,848     430,103    360,538
         Provision for losses on loans                        129,831       5,040     68,665
         Loan charge-offs                                          -      (26,295)        -
         Loan recoveries                                        1,612          -        900
                                                             --------     -------    ------

         Balance at end of year                           $   540,291     408,848    430,103
                                                          ===========     =======    =======
</TABLE>

      As discussed  in note 1, the Company  adopted the  provisions  of SFAS No.
      114,  "Accounting  by Creditors  for  Impairment of a Loan," as amended by
      SFAS No. 118,  "Accounting  by Creditors for Impairment of a Loan - Income
      Recognition and  Disclosures,"  effective  October 1, 1995.  Prior periods
      have not been restated.

     Impaired  loans at September 30, 1996 totaled  $601,000,  all of which were
     classified as non-accrual  and valued based on the fair value of the loan's
     collateral,  or  loan  balance,  whichever  was  less.  Impaired  loans  at
     September 30, 1996 are summarized as follows:
<TABLE>
<CAPTION>

                                     Without           With impairment allowance
                              impairment allowance     -------------------------
                              --------------------      Loan       Allowance
                                   Loan amount         amount       amount
                                   -----------         ------       ------

<S>                                   <C>               <C>        <C>                                     
         Residential real estate      $601,000               -            -
                                       =======          =======    ========
</TABLE>

     The average  balance of  impaired  loans for the year ended  September  30,
     1996, was approximately $547,000 with interest income of $18,367 recognized
     during 1996 on such loans.

     Loans are made to officers, directors, and their associates in the ordinary
     course of business on  substantially  the same terms as those prevailing at
     the time for comparable transactions with other persons, and do not involve
     more than the normal  credit risk nor present other  unfavorable  features.
     The following is a summary of activity  during the year ended September 30,
     1996 with respect to such aggregate  loans to these  individuals  and their
     associates:

         Balance at beginning of year                         $   628,407
         New loans                                                114,644
         Principal repayments                                    (264,158)
                                                                  -------

         Balance at end of year                               $   478,893
                                                                  =======

                                                                   (Continued)

                                     - 30 -


<PAGE>


                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

     At September 30, 1996 and 1995, the Company had approximately  $601,000 and
     $175,000,  respectively, of nonaccrual loans. Interest income on nonaccrual
     loans in 1996, 1995, and 1994, which would have been reported on an accrual
     basis, amounted to approximately $18,000, $6,000, and $7,000, respectively.

     The Company is a party to financial instruments with off-balance sheet risk
     in the  normal  course  of  business  to meet  the  financing  needs of its
     customers.  These  financial  instruments  include  commitments  to  extend
     credit. These instruments  involve, to varying degrees,  elements of credit
     and  interest  rate  risk  in  excess  of  the  amount  recognized  in  the
     consolidated  financial  statements.  The  contract or notional  amounts of
     those  instruments  reflect  the extent of  involvement  the Company has in
     particular classes of financial instruments.

     The Company's  exposure to credit loss, in the event of  nonperformance  by
     the  customer  for  commitments  to  extend  credit is  represented  by the
     contractual or notional amount of those  instruments.  The Company uses the
     same credit policies in making  commitments and conditional  obligations as
     it does for recorded loans.

     A summary of the Company's  financial  instruments with  off-balance  sheet
     risk at September 30, 1996 is as follows:

     Financial instruments whose contract amounts
     represent credit risk -- commitments:

             Mortgage loans:
               Fixed rate                                      $   195,000
               Adjustable rate                                     398,920
             Construction loans:
               Fixed rate                                          103,000
               Adjustable rate                                     140,000
                                                                   -------
                  Total commitments                            $   836,920
                                                               ===========

      Commitments  to extend credit are agreements to lend to a customer as long
      as there is no violation of any condition  established  in the  agreement.
      Commitments  generally have fixed  expiration  dates or other  termination
      clauses and may require  payment of a fee.  Since some of the  commitments
      are  expected to expire  without  being drawn upon,  the total  commitment
      amounts do not necessarily represent future cash requirements. The Company
      evaluates each customer's  creditworthiness  on a case-by-case  basis. The
      amount of  collateral  obtained,  if deemed  necessary by the Company upon
      extension of credit,  is based on  management's  credit  evaluation of the
      borrower. Collateral consists primarily of residential real estate.

      In the origination of mortgage  loans,  the Company enters into adjustable
      interest rate  contracts  with caps and floors  written with the intent of
      managing its interest rate exposure.  Interest rate caps and floors enable
      customers and the Company to transfer,  modify,  or reduce their  interest
      rate risk. At September  30, 1996,  adjustable  rate  mortgage  loans with
      interest rate caps and floors amounted to approximately $28,069,247.

                                                                    (Continued)

                                     - 31 -


<PAGE>
                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(5)   Accrued Interest and Dividends Receivable
      -----------------------------------------

      At September 30, 1996 and 1995, accrued interest and dividends  receivable
consisted of the following:

                                                             1996       1995
                                                             ----       ----

         Loans                                           $   257,252    236,410
         Investment securities                               180,100    217,410
         Mortgage-backed securities                           73,720     71,028
                                                            --------   --------

                                                         $   511,072    524,848
                                                         ===========    =======

(6)   Premises and Equipment
      ----------------------

      A summary of premises and  equipment at September  30, 1996 and 1995 is as
follows:

                                                 1996          1995
                                                 ----          ----

         Land                               $    248,273        238,273
         Landscaping                              32,258         32,258
         Office buildings                      1,043,487      1,025,979
         Furniture and equipment                 805,338        558,533
         Construction in progress                 91,856             -
                                               ---------     ---------
                                               2,221,212      1,855,043

         Less accumulated depreciation         1,101,584        989,227
                                              ----------     ----------

                                            $  1,119,628        865,816
                                               =========     ==========

(7)   Required Investment
      ------------------- 

     Investment  in stock of a Federal  Home Loan Bank is required of  federally
     insured financial  institutions who utilize their services. No ready market
     exists for the stock and it has no quoted market value.  In accordance with
     SFAS No. 115, the investment is carried at cost.

(8)   Deposits

      At September 30, 1996 and 1995, deposits consisted of the following:
<TABLE>
<CAPTION>
                                                            1996                                    1995
                                          ------------------------------------   -----------------------------------------
                                                                     Weighted                                     Weighted     
                                                                      average                                     average
                                                           Range     interest                       Range         interest
                                          Amount         of rates      rate          Amount        of rates         rate   
                                          ------         --------      ----          ------        --------         ----   

<S>                                   <C>               <C>            <C>        <C>              <C>              <C>  
      Noninterest-bearing demand                                                                             
        deposits                      $ 3,139,469           -    %      -  %      $ 1,735,302          -    %        -  %
      Passbook savings accounts        11,659,255          2.03        2.03        12,020,750         2.75          2.75
      Negotiable order of withdrawal                                                                         
        accounts                       10,954,623       1.67-2.99      2.12        10,679,838      2.25-2.50        2.69
      Certificates of deposit          36,068,327       2.03-6.46      5.49        36,695,625      2.75-8.45        5.74
                                       ----------                                  ----------                    
                                                                                                             
                                      $61,821,674                      3.96%      $61,131,515                       4.08%
                                       ==========                      ====       ===========                       ====
</TABLE>
                                               
                                                    
                                                                    (Continued)
                                                                  
                                     - 32 -


<PAGE>



                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

      A summary  of  certificates  of  deposit  by  scheduled  maturities  as of
September 30, 1996 follows:

        Maturing in:          
          Less than one year                            $   26,248,425
          1-2 years                                          5,979,152
          2-3 years                                          1,240,686
          3-4 years                                          1,427,293
          4-5 years                                          1,172,771
                                                        --------------

                                                        $   36,068,327
                                                        ==============

      At September 30, 1996,  the Company had  approximately  $5,375,000 in time
deposits that were greater than or equal to $100,000.

      Interest expense on deposits for the years ended September 30, 1996, 1995,
and 1994 is summarized as follows:
<TABLE>
<CAPTION>
                                                          1996        1995         1994
                                                          ----        ----         ----
<S>                                                  <C>             <C>         <C>    
      Passbook savings accounts                      $    274,209      366,507     390,626
      Negotiable order of withdrawal accounts             235,225      271,371     308,002
      Certificates of deposit                           2,000,916    1,840,991   1,546,132
                                                        ---------    ---------   ---------

                                                     $  2,510,350    2,478,869   2,244,760
                                                        =========    =========   =========
</TABLE>

(9)   Income Taxes
      ------------

     As discussed in note 1, the Company  adopted SFAS No. 109,  "Accounting for
     Income  Taxes,"  and  recorded  the  cumulative  effect  of the  change  in
     accounting  for income taxes of $206,452 as of October 1, 1993.  Prior year
     financial statements have not been restated to apply the provisions of SFAS
     No. 109.

     The  components  of income tax expense for the years  ended  September  30,
     1996, 1995, and 1994 are as follows:
<TABLE>
<CAPTION>

                                                         1996        1995       1994
                                                         ----        ----       ----
<S>                                                  <C>            <C>         <C>    
        Current expense - Federal                    $  451,183     288,216     410,819
        Deferred tax (benefit) expense - Federal       (272,239)      8,365     (70,235)
        Deferred tax (benefit) expense - State          (36,444)     (3,581)     22,416
                                                     ----------     --------    -------

                                                     $  142,500     293,000     363,000
                                                     ==========     =======     =======
</TABLE>

      The  Company  has not  incurred  current  state  income  taxes  due to net
operating loss and credit carryforwards for state income tax purposes.

                                                                    (Continued)

                                     - 33 -


<PAGE>
                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

      Income tax expense of the Company for the years ended  September 30, 1996,
1995,  and 1994  differed  from the amounts  computed by applying the  statutory
Federal  income tax rate of 34% to income  before  income  taxes and  cumulative
effect of change in accounting principle as follows:
<TABLE>
<CAPTION>
                                                         1996        1995       1994
                                                         ----        ----       ----

<S>                                                  <C>            <C>         <C>    
        Tax expense at statutory rate                $  209,384     304,826     340,159
        Increase (decrease) in tax expense
          resulting from:
            State income taxes, net of Federal
              tax benefit                               (24,053)     (2,363)     14,795
            Municipal investments                        (3,792)         -           -
            Other, net                                  (39,039)     (9,463)      8,046
                                                       --------    --------    --------

                                                     $  142,500     293,000     363,000
                                                        =======     =======     =======
</TABLE>

      The tax effects of  temporary  differences  that give rise to  significant
portions of the deferred tax assets and  deferred tax  liabilities  at September
30, 1996 and 1995 are presented below:
<TABLE>
<CAPTION>

                                                                       1996         1995
                                                                       ----         ----

        Deferred tax assets:
<S>                                                                <C>            <C>   
          State tax credit carryforwards                           $    51,121      42,744
          Savings Association Insurance Fund assessment payable        149,963        -
          Employee Stock Ownership Plan accrual                         38,261        -
          Management stock bonus plan                                   14,179        -
          Other                                                          9,420       7,807
                                                                      --------    --------
                 Total gross deferred tax assets                       262,944      50,551

          Less valuation allowance                                        -           -
                                                                      --------    --------
                 Net deferred tax assets                               262,944      50,551
                                                                      --------    --------
        Deferred tax liabilities:
          Loans receivable, due to allowance for loan losses            67,357     114,137
          Deferred loan fees                                           194,926     243,966
          Unrealized holding gains on securities available
            for sale                                                    26,300      13,247
          Premises and equipment, primarily due to
            differences in depreciation                                 19,660      21,282
          Federal Home Loan Bank stock dividends                       146,165     146,165
          Prepaid expenses                                              15,072      13,920
                                                                      --------    --------
                 Total gross deferred tax liabilities                  469,480     552,717
                                                                       -------     -------

                 Net deferred tax liabilities                      $   206,536     502,166
                                                                       =======     =======
</TABLE>


                                                                    (Continued)

                                     - 34 -


<PAGE>



                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

     There was no  valuation  allowance  for deferred tax assets as of September
     30, 1996 and 1995. In assessing the  realizability  of deferred tax assets,
     management  considers  whether it is more likely than not that some portion
     or all of the  deferred  tax  assets  will not be  realized.  The  ultimate
     realization  of deferred tax assets is  dependent  upon the  generation  of
     future taxable income during the periods in which the temporary differences
     resulting  in  the  deferred  tax  assets  become  deductible.   Management
     considers the  scheduled  reversal of deferred tax  liabilities,  projected
     future  taxable  income,   and  tax  planning   strategies  in  making  the
     assessment.   Based  upon  the  level  of  historical  taxable  income  and
     projections  for future  taxable  income over the periods which the related
     temporary differences are deductible, management believes it is more likely
     than  not the  Company  will  realize  the  benefits  of  these  deductible
     differences.

     At  September  30,  1996,  the Company has state gross  receipts tax credit
     carryforwards of approximately $77,455 which are available to reduce future
     state income taxes, if any, through 2000.

     Prior to January 1, 1996,  the Company  was  permitted  under the  Internal
     Revenue Code ("Code") a special bad debt deduction  related to additions to
     tax bad debt reserves  established for the purpose of absorbing losses. The
     provisions of the Code  permitted the Company to deduct from taxable income
     an allowance  for bad debts based on the greater of a percentage of taxable
     income before such deduction or actual loss experience.  Retained  earnings
     at September 30, 1996 include approximately  $602,000 for which no deferred
     Federal income tax liability has been recognized.  The amounts represent an
     allocation  of  income  for bad  debt  deductions  for tax  purposes  only.
     Reduction  of amounts so  allocated  for  purposes  other than tax bad debt
     losses or adjustments  arising from carryback of net operating losses would
     create  income for tax  purposes  only,  which would be subject to the then
     current corporate income tax rate.

     On August  20,  1996,  President  Clinton  signed  legislation  which  will
     eliminate the  percentage of taxable  income bad debt  deduction for thrift
     institutions  for tax years  beginning  after  December 31, 1995.  This new
     legislation also requires a thrift to generally recapture the excess of its
     current tax  reserves  over its 1987 base year  reserves,  whereas the base
     year  reserves  are frozen from  taxation.  As the  Company has  previously
     provided deferred taxes on this amount, no additional  financial  statement
     tax expense should result from this new legislation.

(10)  Federal Home Loan Bank Advances
      -------------------------------

     Federal Home Loan Bank  advances at September 30, 1996 consist of unsecured
     term loans with  principal  payable at maturity  and  interest  due monthly
     based on floating daily interest rates, as follows:

            6.05% maturing June 26, 1997                   $      500,000
            6.05% maturing July 17, 1997                          500,000
            6.05% maturing August 15, 1997                        500,000
            6.05% maturing September 19, 1997                   1,000,000
                                                                ---------

                                                            $   2,500,000
                                                            =============

                                                                   (Continued)

                                     - 35 -


<PAGE>

                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(11)  Preferred Stock
      ---------------
  
      The Company is authorized to issue 1,000,000 shares of no par value serial
      preferred  stock.  At September 30, 1996,  there were no shares issued and
      outstanding.  The Board of Directors of the Company is authorized to issue
      serial  preferred stock and to fix and state voting powers,  designations,
      preferences,   or  other   special   rights   of  such   shares   and  the
      qualifications,   limitations,   and  restrictions  thereof,   subject  to
      regulatory approval but without stockholder approval.

(12)  Employee Benefit Plans
      ----------------------

     (a) 401(k) Profit Sharing Plan
         --------------------------

         During  fiscal  1995,  the  Company  adopted  a  tax-qualified  defined
         contribution  profit  sharing  plan (the "Plan") for the benefit of its
         employees. All full-time employees become eligible to participate under
         the  Plan  after  completing  one  year of  service.  Under  the  Plan,
         employees  may   voluntarily   elect  to  defer  up  to  15%  of  their
         compensation,  not  to  exceed  applicable  limits.  The  first  5%  of
         employees'  savings were matched during 1995 by a Company  contribution
         of $2.00 for each $1.00 of employee contribution.  Effective October 1,
         1995, such Company  contributions were $1.00 for each $1.00 of employee
         contribution.  Such  matching  contributions  begin to vest after three
         years at a rate of 20% per year with full  vesting  after seven  years.
         Additionally,  the  Company  may  contribute  an  annual  discretionary
         contribution  to the Plan based upon a number of  factors,  such as the
         Company's retained earnings,  profits, regulatory capital, and employee
         performance.

         Contributions  by the Company to the Plan during 1996 and 1995  totaled
         $29,116 and $60,247, respectively.

     (b) Pension Plan
         ------------

         The Company  maintained a  noncontributory  pension plan which  covered
         substantially all full-time employees of the Company. The benefits were
         based on years of service  and the  employee's  five  highest  years of
         compensation. The Company's philosophy was to fund annually the maximum
         amount allowable as a deduction for Federal income tax purposes. During
         fiscal  1995,  the  Board of  Directors  of the  Company  approved  the
         termination of the defined benefit  pension plan and the  establishment
         of the 401(k) plan. The defined  benefit  pension plan went through the
         process of termination and settlement  during 1995, and the plan assets
         for those  participants  who were  still  active  employees  at time of
         termination were distributed primarily through deposits into individual
         retirement plan accounts,  with the remainder transferred to the 401(k)
         plan, or paid in cash. These  distributions  occurred March 1, 1995. In
         conjunction  with the  termination,  the  Company  reversed  previously
         accrued  pension  cost  totaling  $84,000,  which was  recognized  as a
         reduction in salaries and employee benefits expense in 1995.

                                                                   (Continued)

                                     - 36 -


<PAGE>



                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

         Pension cost for 1994 was as follows:

             Service cost for benefits earned                   $   68,984
             Interest cost on projected benefit obligations         30,288
             Actual return on plan assets                          (20,794)
             Net amortization and deferral                         (37,622)
                                                                    ------

                      Net pension expense                       $   40,856
                                                                    ======

         No pension  expense was recorded during 1996 or 1995 as a result of the
Company's termination of the Plan.

     (c)  Employee Stock Ownership Plan
          -----------------------------

          During 1995, the Company also  established an employee stock ownership
          plan  (the  "ESOP"),   for  the  exclusive  benefit  of  participating
          employees, who have completed one year of service with the Company and
          have attained age 21.

          The ESOP is funded by  periodic  contributions  made by the Company in
          cash or common stock.  Benefits to participants  may be paid either in
          shares of the Company's common stock or in cash. The ESOP was approved
          to borrow  funds  from the  Company to acquire up to 10% of the common
          stock of the Company. During 1995, the ESOP borrowed $720,000 from the
          Company to acquire  72,000  shares of Company  common stock at $10 per
          share. The loan is secured by the shares purchased and earnings of the
          ESOP  assets,  and is at an interest  rate equal to a published  prime
          rate,  adjusted  quarterly.  The loan is to be repaid  over a ten-year
          period  at  $72,000  per  year.  The  shares  purchased  are held in a
          suspense  account for  allocation  among  participants  as the loan is
          repaid.

          At September 30, 1996,  18,000 ESOP shares have been  allocated to the
          participating  employees.  For  purposes of  computing  net income per
          share,  the remaining  54,000  unallocated  shares are not  considered
          outstanding  until they are  committed-to-be-released  for allocation.
          The Company is  recognizing  as  compensation  expense the fair market
          value of the Company's common stock, adjusted at least quarterly, over
          a ten-year period using the straight-line method. Compensation expense
          recognized  during  1996 and 1995 by the Company  totaled  $83,434 and
          $18,000, respectively.

     (d)  Stock Option Plan
          -----------------

          In January 1996, the Company approved a stock option plan (the "Option
          Plan") whereby 119,025  authorized shares are reserved for issuance by
          the  Company  upon  exercise  of stock  options  granted to  officers,
          directors,  and  employees of the Company  from time to time.  Options
          constitute  both  incentive  stock  options  and  nonincentive   stock
          options.  Options awarded to officers and directors are exercisable at
          a rate of 20% annually with the first 20%  exercisable on the one-year
          anniversary of the date of grant. Any shares subject to an award which
          expires  or is  terminated  unexercised  will again be  available  for
          issuance.  The  Option  Plan has a term of ten  years,  unless  sooner
          terminated.  The exercise  price for the purchase of shares subject to
          an incentive stock option may not be less than 100 percent of the fair
          market  value of the common stock on the date of grant of such option.
          The exercise price per share for  nonincentive  stock options shall be
          the price as determined by an option committee,  but not less than the
          fair market value of the common stock on the date of grant.

                                                                    (Continued)

                                     - 37 -


<PAGE>
                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

         Information relating to stock options during fiscal 1996 is as follows:
<TABLE>
<CAPTION>

                                                                                Number     Option
                                                                                of shares  price      Total
                                                                                ---------  ------     -----

<S>                                                                             <C>       <C>       <C>  
             Shares under option at Plan inception                                 -      $  -          -
             Granted - January 23, 1996                                          77,363    12.375    957,367
             Exercised                                                             -         -          -
             Canceled                                                              -         -          -
                                                                                 -------  --------  --------
             Shares under option at September 30, 1996                           77,363   $ 12.375   957,367
                                                                                 ======   ========   =======
             Shares exercisable at September 30, 1996                                -
                                                                                 ======
             Shares available for grant at September 30, 1996                    41,662
                                                                                 ======
</TABLE>

     (e) Management Stock Bonus Plan
         ---------------------------

         In January  1996,  the Company  adopted a  Management  Stock Bonus Plan
         ("MSBP").  Under the terms of the MSBP, a total of 47,610 shares of the
         Company's  common stock are available for the granting of awards during
         a period of up to ten years. In January 1996, certain key employees and
         directors  were  awarded  a  total  of  30,942  shares  in the  form of
         restricted  stock,  payable  as the  recipient's  interest  in the MSBP
         vests. At September 30, 1996, none of these shares have vested.  Twenty
         percent  of such  awards  will be vested on  January  23,  1997 and 20%
         annually thereafter.

         The Company contributed $578,464 to the MSBP to purchase Company shares
         in the open market.  Unearned  compensation  of $371,304 for the 30,942
         shares  granted  was  recorded  at the date of the  award  based on the
         market value of the Company's stock. The unearned  compensation,  which
         is shown as a separate  component  of  stockholders'  equity,  is being
         amortized over the five-year vesting period.  Compensation  expense was
         $37,591 for the year ended  September  30, 1996.  The  remainder of the
         shares  purchased  and  available  for  future  grants is  recorded  as
         treasury  stock.  Dividends paid on the MSBP shares granted are held in
         arrears and may be distributed  upon the vesting of the shares awarded.
         Dividends  payable on the MSBP  shares  granted at  September  30, 1996
         totaled $6,188.

(13)  Fair Values of Financial Instruments
      ------------------------------------

      SFAS No. 107,  "Disclosures  About Fair Value of  Financial  Instruments,"
      requires disclosure of fair value information about financial instruments,
      whether  or  not  recognized  in  the  balance  sheet,  for  which  it  is
      practicable  to estimate  that value.  In cases where quoted market prices
      are not available,  fair values are based on estimates using present value
      or other valuation techniques. Those techniques are significantly affected
      by the  assumptions  used,  including  the discount  rate and estimates of
      future cash flows. In that regard, the derived fair value estimates cannot
      be substantiated by comparison to independent  markets and, in many cases,
      could not be realized in immediate  settlement  of the  instrument.  These
      estimates are subjective in nature and involve  uncertainties  and matters
      of  significant  judgment  and,  therefore,   cannot  be  determined  with
      precision.   Changes  in  assumptions  would   significantly   affect  the
      estimates.  SFAS No. 107 excludes  certain  financial  instruments and all
      nonfinancial instruments from its disclosure requirements.

                                                                   (Continued)

                                     - 38 -


<PAGE>

                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

      Fair  value  estimates  are based on  existing  on- and  off-balance-sheet
      financial  instruments and other recorded  assets and liabilities  without
      attempting to estimate the fair value of anticipated  future business.  In
      addition, tax ramifications related to the realization of unrealized gains
      and losses can have a significant  effect on fair value estimates and have
      not been  considered in any of the estimates.  Accordingly,  the aggregate
      fair value amounts  presented do not represent the underlying value of the
      Company.

          The  following  methods  and  assumptions  were used by the Company in
          estimating its fair value  disclosures  for financial  instruments and
          certain other assets and liabilities:

          Cash and due from  banks:  The  carrying  amounts of cash and due from
          banks approximate those assets' fair values.

          Interest-bearing   deposits  in  other  financial  institutions:   The
          carrying  amounts  of  interest-bearing  deposits  in other  financial
          institutions  approximate  their  fair  value,  due to the  short-term
          nature of these instruments.

          Investment and mortgage-backed  securities: Fair values for investment
          and  mortgage-backed  securities  are based on quoted  market  prices,
          where  available.  If quoted  market  prices are not  available,  fair
          values are based on quoted market prices of comparable instruments.

          Federal  Home Loan Bank stock:  The  carrying  amount is  considered a
          reasonable estimate of fair value.

          Loans receivable:  For variable-rate loans that reprice frequently and
          with no  significant  change in credit risk,  fair values are based on
          carrying  values.  The fair values for all other  loans are  estimated
          based upon a  discounted  cash flow  analysis,  using  interest  rates
          currently  being  offered for loans with similar terms to borrowers of
          similar credit quality.

          Accrued  interest  and  dividends  receivable:   The  carrying  amount
          approximates  fair  value,  due  to the  short-term  nature  of  these
          receivables.

          Off-balance-sheet   instruments:   Fair   values  for  the   Company's
          off-balance-sheet  instruments  are based on a comparison  with terms,
          including interest rate and commitment period currently  prevailing to
          enter into similar  agreements,  taking into account credit standings.
          The fair values of off-balance-sheet instruments at September 30, 1996
          were not material.

          Deposits:  Fair  values for  fixed-rate  certificates  of deposit  are
          estimated using a discounted cash flow analysis that applies  interest
          rates  currently  being  offered  on  deposits  of  similar  terms  of
          maturity.  The carrying  amounts of all other  deposits,  due to their
          short-term nature, approximate their fair values.

          Federal Home Loan Bank advances:  The carrying  amounts of the Federal
          Home Loan Bank advances  approximate their fair values as the advances
          reprice daily based on a floating interest rate.

                                                                    (Continued)

                                     - 39 -


<PAGE>



                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

      The estimated  fair value of the  Company's  financial  instruments  as of
September 30, 1996 are as follows:
<TABLE>
<CAPTION>
                                                                    Carrying     Fair
                                                                      value      value
                                                                      -----      -----
                                                                       (In thousands)

      Assets:
<S>                                                                <C>           <C>  
         Cash and due from banks                                   $   2,133      2,133
         Interest-bearing deposits in other financial institutions       513        513
         Investment and mortgage-backed securities                    23,685     23,378
         Federal Home Loan Bank stock                                  1,013      1,013
         Loans receivable, net                                        51,500     52,548
         Accrued interest receivable                                     511        511

      Liabilities:
         Deposits:
          Noninterest-bearing demand deposits                          3,139      3,139
          Interest-bearing demand and savings                         22,614     22,614
          Certificates of deposit                                     36,068     36,145
         Federal Home Loan Bank advances                               2,500      2,500
</TABLE>


                                                                   (Continued)

                                     - 40 -


<PAGE>

                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

(14)  Parent Company Financial Information
      ------------------------------------

      The following  represents  condensed financial  information of the Parent.
The Parent's investment in the Association is reported on an equity basis.

                            Condensed Balance Sheets

                           September 30, 1996 and 1995
<TABLE>
<CAPTION>

                                Assets                                1996           1995
                                ------                                ----           ----

<S>                                                               <C>             <C>    
         Investment securities available for sale, at fair value  $  1,170,125       690,000
         Note receivable from Association                            1,064,136     4,601,428
         Investment in of Association, at equity                    12,214,811    12,069,380
         Land                                                           10,000            -
         Other assets                                                  101,372            -
                                                                    ----------    ----------

                  Total assets                                    $ 14,560,444    17,360,808
                                                                    ==========    ==========

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

         Liabilities:
            Deferred income taxes                                 $    146,103        17,145
            Federal income taxes (receivable) payable                  (25,563)       21,905
                                                                    ----------    ----------
                                                                       120,540        39,050
                                                                    ----------    ----------

         Stockholders' equity:
            Common stock                                               119,025       119,025
            Additional paid-in capital                              10,971,714    10,964,983
            Retained earnings                                        6,809,054     6,935,879
            Unearned ESOP shares                                      (630,000)     (720,000)
            Unearned compensation                                     (371,304)           -
            Treasury stock, at cost, 206,918 shares                 (2,502,009)           -
            Net unrealized holding gains on investment
              securities available for sale                             43,424        21,871
                                                                    ----------    ----------
                  Total stockholders' equity                        14,439,094    17,321,758
                                                                    ----------    ----------

                  Total liabilities and stockholders' equity     $  14,560,444    17,360,808
                                                                    ==========    ==========
</TABLE>


                                                                    (Continued)

                                     - 41 -


<PAGE>



                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

                         Condensed Statements of Income
                         ------------------------------

          For the Year ended September 30, 1996 and for the Period from
          March 23, 1995 (date of incorporation) to September 30, 1995
<TABLE>
<CAPTION>

                                                                     1996            1995
                                                                     ----            ----

<S>                                                             <C>                <C>   
Interest income from Association                                $   203,450          63,974
Other operating income                                                9,775              -
Other operating expenses                                            (14,647)             -
Income tax expense                                                  (62,047)        (21,905)
                                                                   --------        --------
         Income before equity in undistributed
            income of Association                                   136,531          42,069

Equity in undistributed income of Association                       336,805         561,479
                                                                    -------         -------

         Net income                                             $   473,336         603,548
                                                                    =======         =======
</TABLE>


                                                                   (Continued)

                                     - 42 -


<PAGE>



                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

                       Condensed Statements of Cash Flows
                       ----------------------------------

          For the Year ended September 30, 1996 and for the Period from
          March 23, 1995 (date of incorporation) to September 30, 1995
<TABLE>
<CAPTION>
                                                                      1996           1995
                                                                      ----           ----

Cash flows from operating activities:
<S>                                                             <C>              <C>    
   Net income                                                   $     473,336        603,548
   Adjustment to reconcile net income to net cash
     (used in) provided by operations:
       Equity in undistributed income of Association                 (336,805)      (561,479)
       Increase in other assets                                      (101,372)            -
       Federal income taxes (receivable) payable                      (47,468)        21,905
                                                                   ----------    -----------
         Net cash (used in) provided by operating activities          (12,309)        63,974
                                                                   ---------     -----------

Cash flows from investing activities:
   Purchase of investment security                                   (138,240)      (644,550)
   Purchase of land                                                   (10,000)            -
   Acquisition of Association                                              -      (5,182,004)
   Net change in loan to Association                                3,537,292     (4,601,428)
                                                                    ---------     ----------
         Net cash provided by (used in) investing activities        3,389,052    (10,427,982)
                                                                    ---------     ----------

Cash flows from financing activity:
   Proceeds from sale of common stock, net of issuance costs               -      10,364,008
   Treasury stock purchased                                        (2,299,490)            -
   Dividends paid                                                    (600,161)            -
   Contribution to management stock bonus plan                       (578,464)            -
   ESOP shares allocated                                              101,372             -
                                                                   ----------    -----------
         Net cash used in financing activities                     (3,376,743)    10,364,008
                                                                    ---------     ----------

         Increase in cash and cash equivalents                             -              -

Cash and cash equivalents at beginning of period                           -              -
                                                                    ---------     ----------

Cash and cash equivalents at end of year                           $       -              -
                                                                    =========     ==========
</TABLE>

                                                                    (Continued)

                                     - 43 -


<PAGE>



                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

     On July 11, 1995, the Parent completed an initial public offering of common
     stock  and  raised  $10,364,008  in  proceeds,  net of  issuance  costs  of
     $818,492.   For  purposes  of  presenting   net  income  per  share,   only
     postconversion net income is considered.


     At the time of  conversion,  the  Association  established  a  "liquidation
     account" in an amount equal to the regulatory capital of the Association as
     shown on its latest statement of financial condition contained in the final
     prospectus used in connection with the conversion.  The liquidation account
     will be maintained  for the benefit of  depositors,  as of the  eligibility
     record date, June 30, 1993, or supplemental  eligibility record date, March
     31, 1995, who continue to maintain their deposits in the Association  after
     conversion.  In the event of a  complete  liquidation  (and only in such an
     event),  each eligible  depositor will be entitled to receive a liquidation
     distribution from the liquidation  account, in the proportionate  amount of
     the then  current  adjusted  balance  for  deposits  then held,  before any
     liquidation  distribution  may be made with  respect  to the  stockholders.
     Except  for the  repurchase  of  stock  and  payment  of  dividends  by the
     Association, the existence of the liquidation account will not restrict the
     use or application of regulatory capital.

     The amount of dividends paid to the Parent from the  Association is limited
     by various  regulatory  agencies.  Under the  regulations  of the Office of
     Thrift  Supervision  ("OTS"),  the  Association  is  not  permitted  to pay
     dividends on its stock after the conversion if its regulatory capital would
     thereby  be  reduced   below  (i)  the  amount   then   required   for  the
     aforementioned  liquidation  account or (ii) the  Association's  regulatory
     capital  requirements.  In  addition,  for a period  of three  years  after
     conversion,  the  Association  may not  without  prior  approval of the OTS
     declare  or pay a cash  dividend  on or  repurchase  any of the stock in an
     amount in excess of 50% of the greater of (1) the  Association's net income
     for the fiscal year in which the dividend is declared or the  repurchase is
     made or (2) the  average of the  Association's  net income for the  current
     fiscal year and no more than two of the immediately preceding fiscal years.
     As a result of these  regulatory  limitations,  at September 30, 1996,  the
     Parent's  investment in the Association was  substantially  restricted from
     transfer by the Association to the Parent in the form of cash dividends.

(15) Regulatory Matters
     ------------------

     The  Company is  required  to  maintain  noninterest-bearing  cash  reserve
     balances.  The aggregate  average cash reserve balances to be maintained at
     September 30, 1996 to satisfy the regulatory requirement was $195,000.

     The  Association  is  subject to various  regulatory  capital  requirements
     administered  by the  federal  banking  agencies.  Failure to meet  minimum
     capital  requirements  can  initiate  certain  mandatory  --  and  possibly
     additional  discretionary  -- actions by regulators  that,  if  undertaken,
     could  have  a  direct  material  effect  on  the  Association's  financial
     statements.  Under capital adequacy guidelines and the regulatory framework
     for prompt  corrective  action,  the Association must meet specific capital
     guidelines that involve quantitative  measures of the Association's assets,
     liabilities,  and  certain  off-balance-sheet  items  as  calculated  under
     regulatory  accounting  practices.  The  Association's  capital amounts and
     classification are also subject to qualitative  judgments by the regulators
     about components, risk weightings, and other factors.

                                                                    (Continued)

                                     - 44 -


<PAGE>
                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

     Quantitative  measures established by regulation to ensure capital adequacy
     require the  Association to maintain  minimum amounts and ratios (set forth
     in the  table  below)  of  total  and Tier I  capital  (as  defined  in the
     regulations) to  risk-weighted  assets (as defined),  and of Tier I capital
     (as defined) to average  assets (as defined).  Management  believes,  as of
     September  30,  1996,  that the  Association  meets  all  capital  adequacy
     requirements to which it is subject.

     As of September 30, 1996, the most recent  notification  from the Office of
     Thrift  Supervision  categorized the Association as well capitalized  under
     the regulatory framework for prompt corrective action. To be categorized as
     well capitalized,  the Association must maintain minimum total risk- based,
     Tier I  risk-based,  and Tier I  leverage  ratios as set forth in the table
     below.  There are no  conditions  or events  since that  notification  that
     management believes have changed the Association's capital category.

     The  Association's  actual capital amounts and ratios are also presented in
     the table below.
<TABLE>
<CAPTION>
                                                                                             Minimum to be well
                                                                  Minimum for                capitalized under
                                                                    capital                  prompt corrective
                                             Actual             adequacy purposes            action provisions
                                   -------------------   -------------------------------  ----------------------------
                                 Amount   Ratio        Amount        Ratio                    Amount      Ratio
                                 ------   -----        ------        -----                    ------      -----
<S>                           <C>            <C> <C>            <C>                         <C>         <C>
As of September 30, 1996:
  Total capital - risk-based                             
  (to risk-weighted assets)  $  12,951,093   38% $   2,755,360  greater than or equal to 8% $3,444,200  greater than or equal to 10%
  Tier I capital - risk-based                               
  (to risk-weighted assets)     12,412,619   36      1,377,680  greater than or equal to 4   2,066,520  greater than or equal to 6
  Tier I capital - leverage
  (to average  assets)          12,412,619   16      3,136,880  greater than or equal to 4   3,921,100  greater than or equal to 5

As of September 30, 1995:
  Total capital - risk-based
  (to risk-weighted assets)     12,471,662   39      2,530,320  greater than or equal to 8   3,162,900  greater than or equal to 10
  Tier I capital - risk-based
  (to risk-weighted assets)     12,075,814   38      1,265,160  greater than or equal to 4   1,897,740  greater than or equal to 6
  Tier I capital - leverage
  (to average assets)           12,075,814   15      3,165,708  greater than or equal to 4   3,957,135  greater than or equal to 5
</TABLE>


(16)    Commitments and Contingencies
        -----------------------------

     (a) Employment Agreements
         ---------------------

         The Company entered into an employment agreement with its president and
         chief executive officer on January 26, 1995. As renewed, the employment
         agreement  is for a term of four years with a base salary of  $100,000.
         The  agreement  may be  terminated  by the Company for "just  cause" as
         defined in the agreement. If the Company terminates without just cause,
         the  president  will be entitled to a  continuation  of salary from the
         date of termination  through the remaining  term of the agreement.  The
         employment  agreement contains a provision stating that in the event of
         involuntary termination of employment in connection with, or within one
         year after, any change in control of the Company, the president will be
         paid a  lump-sum  equal to 2.99  times  his  "base"  salary  (five-year
         average).  The  agreement  may be  renewed  annually  by the  Board  of
         Directors upon a determination of satisfactory  performance  within the
         Board's sole discretion.

                                                                    (Continued)

                                           - 45 -


<PAGE>


                      CCF HOLDING COMPANY AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

         The  Company  entered  into an  employment  agreement  with  its  Chief
         Administrative  Officer on July 15, 1996. The  employment  agreement is
         for a term of two years with a base  salary of $80,000.  The  agreement
         may be  terminated  by the Company  for "just  cause" as defined in the
         agreement.  If the Company  terminates without just cause, this officer
         will  be  entitled  to a  continuation  of  salary  from  the  date  of
         termination through the remaining term of the agreement. The employment
         agreement contains a provision stating that in the event of involuntary
         termination of employment in connection with, or within one year after,
         any change in control of the  Company,  the officer will be paid a lump
         sum equal to 2.99  times his "base  salary"  (five-year  average).  The
         agreement  may be renewed  annually  by the Board of  Directors  upon a
         determination  of  satisfactory  performance  within the  Board's  sole
         discretion.

(17)  Savings Association Insurance Fund Assessment
      ---------------------------------------------

      On September 30, 1996, the Deposit  Insurance Funds Act of 1996 was passed
      which,  among other  provisions,  empowered the Federal Deposit  Insurance
      Corporation  to  impose  a  special  assessment  on  Savings   Association
      Insurance Fund ("SAIF")  assessable  deposits of depository  institutions.
      This special  assessment,  which is based on  SAIF-assessable  deposits at
      March  31,  1995,  is  intended  to  recapitalize  the SAIF.  The  special
      assessment is 65.7 basis points per $100 of insured deposits. Based on the
      Company's  level of insured  deposits held on March 31, 1995,  the Company
      has recorded a charge  against  earnings for its accrual of the assessment
      totaling $397,568 at September 30, 1996.

(18)  Subsequent Events
      -----------------
   
     On December 9, 1996, the Company's board of directors  approved a change in
     the Company's year-end from September 30 to December 31.

     During the first  quarter of fiscal 1997,  the Company  acquired  tracts of
     land in both Fayetteville,  Georgia and McDonough,  Georgia for the purpose
     of  constructing  future branch sites.  The combined  purchase price of the
     properties totaled approximately $600,000.

                                      - 46 -






<PAGE>


                             CCF HOLDING COMPANY

                              101 N. Main Street
                           Jonesboro, Georgia 30236

                                (770) 478-8881

             CLAYTON COUNTY FEDERAL SAVINGS AND LOAN ASSOCIATION

Forest Park Branch Office          Main Office             Morrow Branch Office
     822 Main Street            101 N. Main Street        2236 Lake Harbin Road

   Forest Park, Georgia         Jonesboro, Georgia           Morrow, Georgia

                  Board of Directors of CCF Holding Company
                                     and

             Clayton County Federal Savings and Loan Association

            John B. Lee, Jr.                          Edwin S. Kemp, Jr.
            Chairman of the Board                     Attorney at Law
            Public Relations Consultant to Spartan
            Lincoln-Mercury, Inc. and Loewen Group    David B. Turner
            International, Inc.                       President and Chief 
                                                        Executive Officer

            Joe B. Mundy                              Charles S. Tucker
            Retired (Former circuit court clerk)      Retired (former county 
                                                        agent for University
                                                        of Georgia)

            Leonard A. Moreland
            Executive Vice President*

-------------------------
* Director of Association only

                 Executive Officers of CCF Holding Company and
              Clayton County Federal Savings and Loan Association

                 David B. Turner                      Leonard A. Moreland
          President and Chief Executive Officer      Executive Vice President

                 Thomas L. Sawyer                       Edith W. Stevens
         Vice President and Chief Financial Officer  Vice President and Chief 
                                                        Operating Officer

                Richard P. Florin                        Charles S. Tucker
               Senior Vice President                  Secretary and Treasurer

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

Corporate Counsel                       Independent Auditors           
Edwin S. Kemp, Jr., Esquire             KPMG Peat Marwick LLP
101 North Main Street                   303 Peachtree Street, N.W.
Suite 203                               Suite 2000
Jonesboro, Georgia  30236               Atlanta, Georgia  30308
                                        
Special Counsel                         Transfer Agent and Registrar
Malizia, Spidi, Sloane & Fisch, P.C.    Registrar & Transfer Company
One Franklin Square                     10 Commerce Drive
1301 K Street, N.W., Suite 700 East     Cranford, New Jersey  07016
Washington, D.C. 20005                  (908) 272-8511

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

The Company's Annual Report for the year ended September 30, 1996 on Form 10-KSB
is available without charge upon written request.  For a copy of the Form 10-KSB
or any  other  investor  information,  please  write or call  David  B.  Turner,
President  and Chief  Executive  Officer at the  Company's  Office in Jonesboro,
Georgia.  The Annual Meeting of Stockholders will be held on January 23, 1997 at
4:30 p.m. at the office of the Company.



                                     -47-