Exhibit 13

A TRADITION OF
EXCELLENCE

Dear Fellow Shareholder:

At the beginning of 2002, we were very optimistic that our economy
would rebound, terrorism would subside, our business would prosper and our Company would be poised to take advantage of new opportunities. As the year progressed, unfortunately, we saw the economy continue to struggle, threats of terrorism on almost
every newscast, concerns over war in the Middle East escalate, and many well respected companies and industries experience unprecedented problems. Our Company is very fortunate to be located in a prospering area with real population growth and
economic expansion despite economic conditions in the U.S. in general. Unfortunately, the lackluster global, national and state economies ripple through our community to the extent that our citizens are less certain of their financial future today
than they have been in many years. That being said, the Board of Directors and employees of CCF Holding Company and its subsidiary Heritage Bank are very proud to present to you, our partners, a summary of our Companys financial performance
for 2002.

While the following pages will detail our financial performance, we would like to point out a few very bright spots that we hope you will agree are additional solid
building blocks put in place to construct a sound financial institution. The Company completed the year with $262 million in assets, which represented a 5.7% increase over the end of the previous year. Although this was a much slower growth rate
than the Company has experienced in the recent past, we believe it is a very healthy growth rate in this economy. While focusing on controlling our growth rate, we were able to increase the Companys net earnings to over $1.9 million, or 37.4%
over the previous year. We would also like to point out that this net income increase includes an increase in our provision for future loan losses of $392,000, a 59.2% increase over our provision for future loan losses at the end of 2001. This
brings our loan loss reserve, as a percentage of total loans outstanding, to 1.47% as of the end of 2002.

The Board of Directors and management team have been executing a plan
to build the solid framework for a commercial bank that is not only competitive in our markets, but also provides the long-term earnings performance to enhance the value of your investment over the long-term. It is our desire to have a Company that
will provide long-term earnings per share growth, a market demand for our common stock, and a modest cash dividend. The Company was able to achieve approximately 32% growth in earnings per share over the prior year and has averaged approximately 27%
annual earnings per share growth since 1999. We believe that our decision to split the stock three for two in December 2002 will provide more shares in the marketplace and, at the same time, keep the share price in a trading range that makes it more
affordable for smaller investors. We also believe that paying the $.05 per share dividend in January and April 2003 demonstrates our desire to provide some modest cash flow to our investors.

We are very proud of our outstanding group of bankers. Many of our team members are pictured on the cover of this report. Last year we showed you our banking centers and this year you can see most of the reasons we have
been able to grow our Company year after year. We will never lose sight of the fact that you have entrusted us with your investment, and our commitment to you each and every day is that we will work diligently to continue the Tradition of
Excellence, upon which we were founded.



|Very truly yours,                                             |  |  |                                                                     
|------------------------------------------------------------- |  |  | --------------------------------------------------------------------
|                                                              |  |  |                                                                     
|/s/ Leonard MorelandLeonard A.
MorelandPresidentHeritage Bank |  |  | /s/ David B. TurnerDavid B. TurnerPresident & CEOCCF Holding Company





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CCF HOLDING
COMPANY

ANNUAL REPORT



TABLE OF CONTENTS



|                                                  
|--------------------------------------------------
|Corporate Profile and Stock Market Information    
|                                                  
|Selected Financial and Other Data                 
|                                                  
|Managements Discussion and Analysis              
|                                                  
|Report of Independent Certified Public Accountants
|                                                  
|Consolidated Financial Statements                 
|                                                  
|Notes to Consolidated Financial Statements        



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CCF HOLDING COMPANY

Corporate Profile and Related
Information

CCF Holding Company (the Company) is a bank holding company incorporated under the laws of the State of Georgia. Heritage Bank (the Bank)
is a Georgia commercial bank that is a wholly owned subsidiary of the Company. Prior to September 1998, the Company was a savings and loan holding Company and the Bank was a federally chartered savings bank. The Company was organized in 1995 in
connection with the conversion of the Bank from a mutual to stock form of organization (the Conversion) in July 1995. The Bank, through it predecessors, commenced business in 1955.

The Bank operates five offices within its primary market area in Clayton, Fayette and Henry Counties, Georgia. The market area is part of the Atlanta, Georgia metropolitan statistical area. The Bank is subject to
examination and comprehensive regulation by the Georgia Department of Banking and Finance and the Federal Deposit Insurance Corporation (FDIC) and its deposits are federally insured by the Savings Association Insurance Fund
(SAIF) of the FDIC. The Bank 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 Company also is subject to state of Georgia
and federal regulation.

The Bank attracts deposits from the general public and uses such deposits primarily to invest in and originate commercial, residential and consumer loans
and, to a lesser extent, to invest in investment securities. The principal sources of funds for the Banks lending activities are deposits, FHLB borrowings, borrowings from correspondent banks and the amortization, repayment, and maturity of
loans and investment securities. Principal sources of income are interest on loans and investment securities and fees paid to the Bank for its services. The Banks principal expenses are interest paid on deposits and, to a lesser degree,
personnel related expenses.

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 following table reflects high and low prices paid in actual transactions, as reported by The
Nasdaq SmallCap Market, as well as dividend information. The quotations reflect inter-dealer prices, and may not include retail mark-up, mark-down, or commission.



|Period                |  | High(1) |       | Low(1) |   | DividendsDeclared |  | DividendsPaid |     
|--------------------- |  | ------- | ----- | ------ | - | ----------------- |  | ------------- | ----
|                      |  |         |       |        |   |                   |  |               |     
|2001      1st Quarter |  | $       | 8.29  |        | $ | 7.09              |  | $             | 0.00
|2001      2nd Quarter |  | 9.56    |       | 7.76   |   | 0.00              |  | 0.00          |     
|2001      3rd Quarter |  | 11.19   |       | 9.41   |   | 0.00              |  | 0.00          |     
|2001      4th Quarter |  | 14.52   |       | 10.33  |   | 0.00              |  | 0.00          |     
|                      |  |         |       |        |   |                   |  |               |     
|2002      1st Quarter |  | $       | 9.78  |        | $ | 8.67              |  | 0.00          |     
|2002      2nd Quarter |  | 10.17   |       | 9.24   |   | 0.00              |  | 0.00          |     
|2002      3rd Quarter |  | 9.57    |       | 8.60   |   | 0.00              |  | 0.00          |     
|2002      4th Quarter |  |         | 17.10 |        |   | 8.36              |  |               | 0.05

(1)Values adjusted to reflect the three for two stock split paid in the form of a dividend to shareholders of record on December 4, 2002.

(2)The Company declared the dividend on December 19, 2002, and paid the dividend on January 19,
2003.

2



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The number of shareholders of record as of December 31, 2002, was approximately 400, inclusive of the number of persons or entities who held stock in nominee
or street name. At December 31, 2002, there were 1,466,767 shares of common stock issued and outstanding. The Companys ability to pay dividends to shareholders is primarily dependent upon the dividends it receives from the Bank,
and to a lesser extent, the amount of cash on hand. The Bank may not declare or pay a cash dividend on any of its stock if the effect thereof would cause the Banks regulatory capital to be reduced below (1) the amount required for the
liquidation account established in connection with the Conversion (up to $6.6 million), or (2) the regulatory capital requirements. The Company declared a dividend of $.05 per share on December 19, 2002, and paid the dividend to shareholders on
January 19, 2003.

On November 21, 2002, the Company announced a three for two stock split payable in the form of a stock dividend on December 19, 2002, to shareholders of record
on December 4, 2002.

On February 1, 2002, the Company completed the sale, through its subsidiary, CCF Capital Trust I, of $4,000,000 of floating rate capital securities (the
Capital Securities) with a maturity date of March 31, 2032 and a liquidation value of $50,000 per Capital Security. Interest on the Capital Securities is to be paid on the last business day of each March, June, September, and December.
The Bank paid dividends to the Company for the purpose of funding the Companys payment obligations with respect to the outstanding junior subordinated debentures and the related Capital Securities. Pursuant to the terms of the debentures and
the Capital Securities, the Company has the right to defer the quarterly interest payments under the debentures issued in the transaction and the Capital Securities for up to 20 consecutive quarterly periods. However, during any period in which the
Company defers interest payments on the debentures, the Company may not pay a dividend or make any other payment or distribution on its common stock.

SELECTED FINANCIAL AND OTHER DATA

The selected financial and other data set forth below should be read in conjunction with the consolidated
financial statements, including the notes thereto, and Managements Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this report. The following selected financial data concerning the
Company for and as of the end of each of the years in the five year period ended December 31, 2002, are derived from the audited consolidated financial statements of the Company. The selected financial and operating data is qualified in its entirety
by the more detailed information and consolidated financial statements, including the notes thereto, included elsewhere in this report. The audited consolidated financial statements of the Company as of December 31, 2002 and 2001 and for each of the
years in the two year period ended December 31, 2002, and the report of Porter Keadle Moore, LLP, the Companys independent public accountants, thereon, are included elsewhere in this report. All share information and per share amounts have
been adjusted to reflect the three for two stock split effected on December 19, 2003.

3



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Financial Condition

|(Dollars in Thousands) |  | Year Ended December 31, |        
|---------------------- |  | ----------------------- | -------
|                       |  |                         |        
|                       |  | 2002                    |        
|                       |  |                         |        
|Total Amount of:       |  |                         |        
|                       |  |                         |        
|Assets                 |  | $                       | 261,993
|                       |  |                         |        
|Loans receivable, net  |  | 190,969                 |        
|                       |  |                         |        
|Investment securities  |  | 33,570                  |        
|                       |  |                         |        
|Deposits               |  | 231,787                 |        
|                       |  |                         |        
|FHLB advances          |  | 5,000                   |        
|                       |  |                         |        
|Liabilities            |  | 244,252                 |        
|                       |  |                         |        
|Shareholders equity   |  | 17,740                  |        
|                       |  |                         |        
|Other Data:            |  |                         |        
|                       |  |                         |        
|Net income             |  | $                       | 1,963  
|                       |  |                         |        
|Average assets         |  | 254,321                 |        
|                       |  |                         |        
|Average equity         |  | 16,797                  |        
|                       |  |                         |        
|Full service offices   |  | 5                       |        

Summary of Operations

|(Dollars in Thousands, exceptper share details)     |  | Year Ended December 31, |       
|--------------------------------------------------- |  | ----------------------- | ------
|                                                    |  |                         |       
|                                                    |  | 2002                    |       
|                                                    |  |                         |       
|                                                    |  |                         |       
|Total interest income                               |  | $                       | 16,256
|                                                    |  |                         |       
|Total interest expense                              |  | 6,205                   |       
|                                                    |  |                         |       
|                                                    |  |                         |       
|Net interest income                                 |  | 10,051                  |       
|                                                    |  |                         |       
|Provision for loan losses                           |  | 1,054                   |       
|                                                    |  |                         |       
|                                                    |  |                         |       
|Net interest income after provision for loan losses |  | 8,977                   |       
|                                                    |  |                         |       
|Other income                                        |  | 1,566                   |       
|                                                    |  |                         |       
|Other expenses                                      |  | 7,689                   |       
|                                                    |  |                         |       
|                                                    |  |                         |       
|Earnings before income taxes                        |  | 2,874                   |       
|                                                    |  |                         |       
|Income tax expense                                  |  | 911                     |       
|                                                    |  |                         |       
|                                                    |  |                         |       
|Net earnings                                        |  | $                       | 1,963 
|                                                    |  |                         |       

4



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Key Operating Ratios



|                                                                            |  | Year Ended December 31, |      
|--------------------------------------------------------------------------- |  | ----------------------- | -----
|                                                                            |  |                         |      
|Performance Ratios:(Dollars in Thousands,except per share details)          |  | 2002                    |      
|                                                                            |  |                         |      
|                                                                            |  |                         |      
|Return on average assets (net earnings divided by average total
assets)     |  | 0.77                    | %    
|                                                                            |  |                         |      
|Return on average equity (net earnings divided by average equity)           |  | 11.69                   | %    
|                                                                            |  |                         |      
|Average interest earning assets to average interest bearing
liabilities     |  | 109.90                  | %    
|                                                                            |  |                         |      
|Net interest rate spread                                                    |  | 3.98                    | %    
|                                                                            |  |                         |      
|Net yield on average interest-earnings assets                               |  | 4.24                    | %    
|                                                                            |  |                         |      
|Net interest income after provision for loan losses to total other expenses |  | 117.06                  | %    
|                                                                            |  |                         |      
|Basic earnings per share                                                    |  | $                       | 1.34 
|                                                                            |  |                         |      
|Diluted earnings per share                                                  |  | $                       | 1.26 
|                                                                            |  |                         |      
|Dividend payout (1)                                                         |  | 3.97                    | %    
|                                                                            |  |                         |      
|Capital Ratios                                                              |  |                         |      
|                                                                            |  |                         |      
|Book value per share                                                        |  | $                       | 12.09
|                                                                            |  |                         |      
|Average equity to average total assets                                      |  | 6.60                    | %    
|                                                                            |  |                         |      
|Equity-to-assets (End of Period)                                            |  | 6.77                    | %    
|                                                                            |  |                         |      
|Asset Quality Ratios                                                        |  |                         |      
|                                                                            |  |                         |      
|Non-performing loans as a percentage of total loans, net                    |  | 0.39                    | %    
|                                                                            |  |                         |      
|Non-performing loans as a percentage of total assets                        |  | 0.29                    | %    
|                                                                            |  |                         |      
|Allowance for loan losses to non-performing loans                           |  | 382                     | %    

______________

(1)Dividends declared per share divided by net earnings
per diluted share.

5



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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF
OPERATIONS

Forward-Looking Statements

CCF Holding Company (the Company) may from
time to time make written or oral forward-looking statements, including statements contained in the Companys filings with the Securities and Exchange Commission, in its reports to shareholders and in other communications by the
Company, which are made in good faith by the Company pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

These
forward-looking statements involve risks and uncertainties, such as statements of the Companys plans, objectives, expectations, beliefs, feelings, anticipations, estimates, and intentions, that are subject to change based on various important
factors (some of which are beyond the Companys control). The following factors, among others, could cause the Companys financial performance to differ materially from the plans, objectives, expectations, estimates and intentions
expressed in forward-looking statements: the strength of the United States economy in general and the strength of the local economies in which the Company conducts operations; the effects of, and changes in, trade, monetary and fiscal policies and
laws, including interest rate policies of the Board of Governors of the Federal Reserve System, inflation, interest rate and market and monetary fluctuations; the adequacy of the Companys loan loss reserve; the timely development of and
acceptance of new products and services of the Company and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors products and services; the willingness of
potential customers to substitute competitors products and services for the Companys products and services; the success of the Company in gaining regulatory approval of its products and services, when required; the impact of changes in
financial services laws and regulations (including laws concerning taxes, banking, securities and insurance); technological changes; changes in consumers spending and saving habits; terrorism; war and the success of the Company at managing the
risks involved in the foregoing.

The Company cautions that these important factors are not exclusive. The Company does not undertake to update any forward-looking statement,
whether written or oral, that may be made from time to time by or on behalf of the Company.

Critical Accounting Policies

In preparing its financial statements, the Company has adopted various accounting policies that comply with accepted accounting principles generally accepted in the United States of America. Certain accounting policies
involve significant judgments and assumptions on the part of management that can have a material impact on the carrying value of assets and liabilities. Management considers such accounting policies to be critical accounting policies. The Company
believes the allowance for loan losses is a critical accounting policy that requires the most significant use of estimates and assumptions in the preparation of its consolidated financial statements.

The allowance for loan losses is based on managements judgment of an amount that is adequate to absorb inherent losses in the existing loan portfolio. The allowance for loan losses is established through a
provision for losses based on managements evaluation of several factors. The evaluation, which includes a review of all loans on which full collection may not be reasonably assumed, considers among other matters, economic conditions, the fair
market value or the estimated net realizable value of the underlying collateral, the financial condition of the borrowers, managements estimate of probable credit losses, historical loan loss experience, and other factors that warrant
recognition in providing for

6



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an adequate loan loss allowance.

Recent Developments

On March 19, 2003, the Company declared a $0.05 dividend to shareholders of record on April 4, 2003, with a payment date of April 21, 2003.

On December 19, 2002, the Company declared a $0.05 dividend to shareholders of record on January 2, 2003, with a payment date of January 19, 2003.

On November 19, 2002, the Company declared a three for two stock split paid in the form of a dividend to shareholders of record on December 4, 2002. Payment was made on December 19, 2002. All per share and share detail has been adjusted to
reflect the stock split.

On February 1, 2002, the Company completed the sale, through its subsidiary, CCF Capital Trust I, of $4,000,000 of Capital Securities with a maturity
date of March 31, 2032 and a liquidation value of $50,000 per Capital Security. Interest on the Capital Securities is to be paid on the last business day of each March, June, September, and December. The interest rate is reset quarterly at a rate
equal to the prime rate of interest as announced in the Money Rates section of the Eastern Edition ofThe Wall Street Journalplus 75 basis points. At December 31, 2002, the prime rate was 4.25% and as
a result the interest rate on the Capital Securities is 5.0%. The Company used the proceeds from this offering to reduce its debt and for general corporate purposes, including providing capital to the Bank. The securities issued have a 30-year
maturity and may be called at par on any interest payment date after the first five years, at the Companys option.

Business Strategy

The Banks business strategy is 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. Management of the Bank 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 the Banks product and customer base to become
a more diversified financial institution.

Regulatory Capital. In February 2002, CCF through private placement of the Capital Securities issued by its
subsidiary CCF Capital Trust I, a Delaware business trust, raised gross proceeds of $4 million, or net proceeds of $3.75 million. The securities issued are considered tier 1 capital for regulatory capital purposes and it is reported as a long term
debt obligation of the Company reflecting the issuance of subordinated debentures by the Company to CCF Capital Trust I in a like principal amount. The proceeds from the sale of the Capital Securities were used to retire $2.5 million of short-term
debt, which had been used by the Company to augment the capital of its bank subsidiary, and to infuse $900,000 of additional capital into the Bank. The remainder of the proceeds will be maintained in cash for future needs, including the Banks
future capital needs. Throughout 2002, the Company made quarterly interest payments under the terms of the Capital Securities. In addition, the Company established a $1.0 line of credit with a correspondent bank.

The Company and the Bank continue to manage their respective capital positions in order to support healthy growth. The Company ended the year 2002 with a total capital to risk weighted assets ratio of
9.75%. The Bank ended the year 2002 with a total capital to risk weighted assets rating of 11.31%. Capital levels at December 31, 2002 are considered well capitalized by regulatory standards.

7



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Reduction of Interest Rate Risk. The Bank manages its interest rate risk through the origination of adjustable-rate loans when
market conditions permit. The emphasis in the loan portfolio production continues to be to increase the volume of loans that reprice at least annually, in order to better match the repricing of the Banks liabilities.

Asset Quality. The Bank continues to maintain its asset quality through detailed underwriting and thorough analysis of loan requests. The Bank analyzes each loan request
from both a credit and a collateral approach. The credit analysis is performed first and if the request meets the credit guidelines of the Bank, the loan is then underwritten to the Banks collateral guidelines. The degree of credit analysis
performed is based both on the size of the request and the risk exposure. The loan portfolio is constantly reviewed and evaluated to measure the quality of the portfolio and to try and anticipate future problems. If a loan reaches 90 consecutive
days without payment in full of all scheduled payments, the Bank places the loan in a non-accrual or non-performing status. At December 31, 2002, the Banks ratio of non-performing loans to total loans was 0.39% and to total assets was 0.29%.
This compares to 0.03% and 0.02%, respectively at December 31, 2001. The increase in 2002 is due primarily to two commercial loans, totaling $480,601, being restructured. Management has analyzed these two loans and made special allocations in the
loan loss reserve to cover any collateral shortfalls should these loans fail to perform as agreed.

Product and Customer Base. The Bank increased the
size of its loan portfolio by approximately $6 million, from $188 million at December 31, 2001 to $194 million at December 31, 2002. The increase is attributed to a growth in commercial real estate lending of $7 million or 8%, construction lending
of $2 million or 4%, and commercial loans of $5 million or 37%, partially offset by a reduction in consumer lending primarily through indirect lending activities of $6 million or 21% and a reduction in residential mortgage loans outstanding of $2
million or 16%. The Bank continues to sell new residential mortgage originations to Fannie Mae. The Banks deposits increased by $15 million or 7%, from $217 million at December 31, 2001, to $232 million at December 31, 2002. This growth in
deposits was used to fund the loan growth. In addition, the Bank had FHLB borrowings outstanding as of December 31, 2002 of $5 million. It is expected that 2003 loan growth will continue to be steady in the Banks primary market areas as long
as long-term borrowing rates remain steady and economic conditions do not worsen. The Bank will seek to continue to expand its customer base through advertising, direct mail and one on one personal visits with prospective customers.

Management of the Bank believes that there are opportunities for growth within the Banks primary and adjacent market areas. The Bank 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. As discussed below, with this growth comes risk, and the Banks ability to manage this risk will directly impact
its financial condition and operating results in future periods.

Asset and Liability Management

Interest Rate Sensitivity. The ability to maximize net interest income is largely dependent on achieving a positive interest rate spread that can be sustained during fluctuations in prevailing interest rates. The Bank,
like many other financial institutions, is subject to interest rate risk resulting from the difference in the maturity of interest-bearing liabilities (including deposits) and interest-earning assets (including loans) and the volatility of interest
rates. Because time deposit accounts, given their longer terms to maturity, react more slowly to market interest rate movements than do many types of loans in the Banks portfolio, decreases in interest rates may have an adverse effect on the
Banks earnings. The Bank reduces this exposure by diversifying its deposit portfolio to include more deposits at primarily variable rates such as NOW and Money Market accounts.

The Banks net interest rate spread was 3.99% for the year ended December 31, 2002, and 3.65% for

8



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the year ended December 31, 2001. The results of the Companys cumulative interest sensitivity gap analysis indicate that a fluctuation in interest
rates would have only a slight impact on the Banks net interest rate spread and earnings, as the ratio of interest sensitive assets to interest sensitive liabilities in the one year time frame approximates one. The Bank is asset sensitive over
the short term, which will cause earnings to be higher during rate increases and lower during decreases. However, over a 12-month period net interest income should be minimally affected. In 2002, the Bank continued to experience Federal Reserve
interest rate reductions to a prime rate of 4.25%. The reductions continued to affect the Banks net interest income as the asset sensitivity outpaced liability repricing. It is expected that approximately six months must pass before all rate
reductions can be fully adjusted through both the asset and liability pricing. The interest rate reductions during 2002 brought short-term rates to such a low level that it was not possible to fully offset the reductions in the liability pricing
structure without threatening disintermediation of time deposits. Furthermore, transaction account rates were already at such low levels that downward adjustments could not be fully implemented. This caused repricing of the loan portfolio to exceed
the ability of the Bank to reprice the transaction account rates.

The Bank attempts to manage the interest rates it pays on deposits while maintaining a stable deposit base and
providing quality services to its customers. The Bank has continued to rely primarily on deposits to fund its loan growth. To the extent the Bank is unable to invest these funds in loans originated in the Banks market area, it will continue to
purchase municipal securities and other high quality investment securities. The decline in interest rates has also meant that yields on investment securities dropped to levels not experienced in the last forty years.

In an effort to manage interest rate risk and provide the Bank with some protection from the negative effect of changes in interest rates, the Bank instituted certain asset and liability management
measures, including the following: 1) reduced the maturities or terms of its loans and other assets to reprice 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) lengthened the maturities of interest-bearing liabilities by encouraging depositors to invest in longer term deposit products offered by the Bank; 3) increased the amount of less rate-sensitive deposits
by actively seeking demand deposit accounts; and 4) encouraged long-term depositors to maintain their accounts with the Bank through expanded customer products and services.

9



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Average Balance Sheets. The following table sets forth certain information relating to the Company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.



|                                                                    |  | Year Ended December 31, |        
|------------------------------------------------------------------- |  | ----------------------- | -------
|                                                                    |  |                         |        
|                                                                    |  | 2002                    |        
|                                                                    |  |                         |        
|                                                                    |  | AverageBalance(1)       |        
|                                                                    |  |                         |        
|                                                                    |  | (Dollars in Thousands)  |        
|                                                                    |  |                         |        
|Assets                                                              |  |                         |        
|                                                                    |  |                         |        
|Interest-earning assets:                                            |  |                         |        
|                                                                    |  |                         |        
|Loans (including loan fees)(2)                                      |  | $                       | 193,157
|Taxable investment securities                                       |  | 24,374                  |        
|Nontaxable investment securities                                    |  | 3,682                   |        
|FHLB Stock                                                          |  | 847                     |        
|Federal Funds Sold                                                  |  | 11,375                  |        
|Interest-earning deposits in other financial institutions           |  | 3,073                   |        
|                                                                    |  |                         |        
|Total interest-earning assets                                       |  | 236,508                 |        
|Other noninterestearning assets                                    |  | 17,813                  |        
|                                                                    |  |                         |        
|Total assets                                                        |  | $                       | 254,321
|                                                                    |  |                         |        
|                                                                    |  |                         |        
|Liabilities and shareholders equity:                               |  |                         |        
|                                                                    |  |                         |        
|Interest-bearing liabilities:                                       |  |                         |        
|Demand deposits                                                     |  | $                       | 77,084 
|Regular savings                                                     |  | 6,849                   |        
|Time deposits                                                       |  | 118,156                 |        
|FHLB advances                                                       |  | 6,615                   |        
|Line of Credit                                                      |  | 212                     |        
|Note Payable                                                        |  | 3,660                   |        
|Securities sold under agreements to repurchase                      |  | 2,635                   |        
|                                                                    |  |                         |        
|Total interest-bearing liabilities                                  |  | 215,211                 |        
|Non-interest bearing deposits                                       |  | 20,344                  |        
|Other noninterest bearing liabilities                               |  | 1,969                   |        
|                                                                    |  |                         |        
|Shareholders equity                                                |  | 16,797                  |        
|                                                                    |  |                         |        
|Total liabilities and shareholders equity                          |  | $                       | 254,321
|                                                                    |  |                         |        
|Excess of interest-earning assets over interest-bearing liabilities |  | $                       | 21,297 
|                                                                    |  |                         |        
|Ratio of interest-earning assets to interest bearing liabilities    |  | 109.90                  | %      
|Net interest income                                                 |  |                         |        
|                                                                    |  |                         |        
|Net interest spread (3)                                             |  |                         |        
|                                                                    |  |                         |        
|Net yield on average interest-earning assets (4)                    |  |                         |        
|                                                                    |  |                         |        

(1)Average balances are derived from average daily balances.

(2)Average balances include nonaccrual loans.

(3)Net interest spread represents the difference between the average yield on interest-earnings 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.

10



---

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 Company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.



|                                                          |  | Year Ended December 31,2002 compared to 2001 |       | Year Ended December 31,2001 compared to 2000 |  
|--------------------------------------------------------- |  | -------------------------------------------- | ----- | -------------------------------------------- | -
|                                                          |  |                                              |       |                                              |  
|                                                          |  | Changes due to                               |      
|                                                          |  |                                              |      
|                                                          |  | Volume                                       |       | Rate/Yield                                   |  
|                                                          |  |                                              |       |                                              |  
|                                                          |  | (Dollars in Thousands)                       |      
|Interest income:                                          |  |                                              |       |                                              |  
|Loans                                                     |  | $                                            | 1,029 |                                              | $
|Taxable investment securities                             |  | (190                                         | )     | (380                                         | )
|Nontaxable investment securities                          |  | 15                                           |       | 1                                            |  
|FHLB stock                                                |  | (1                                           | )     | (13                                          | )
|Federal Funds Sold                                        |  | 61                                           |       | (176                                         | )
|Interest-earning deposits in other financial institutions |  | (32                                          | )     | (103                                         | )
|                                                          |  |                                              |       |                                              |  
|                                                          |  |                                              |       |                                              |  
|Total interest income                                     |  | $                                            | 882   |                                              | $
|                                                          |  |                                              |       |                                              |  
|                                                          |  |                                              |       |                                              |  
|Interest expense:                                         |  |                                              |       |                                              |  
|                                                          |  |                                              |       |                                              |  
|Demand deposits                                           |  | $                                            | 127   |                                              | $
|Regular savings                                           |  | 8                                            |       | (29                                          | )
|Time deposits                                             |  | (376                                         | )     | (2,490                                       | )
|FHLB advances                                             |  | 138                                          |       | 0                                            |  
|Line of credit                                            |  | (125                                         | )     | (50                                          | )
|Notes payable                                             |  | 195                                          |       | 0                                            |  
|Securities sold under agreements to repurchase            |  | (1                                           | )     | (36                                          | )
|                                                          |  |                                              |       |                                              |  
|                                                          |  |                                              |       |                                              |  
|Total interest expense                                    |  | (34                                          | )     | (3,509                                       | )
|                                                          |  |                                              |       |                                              |  
|                                                          |  |                                              |       |                                              |  
|Net interest income                                       |  | $                                            | 916   |                                              | $
|                                                          |  |                                              |       |                                              |  

Comparison of Financial Condition at December 31, 2002 and December 31, 2001

Total assets increased $14.2 million, or
5.7%, to $262.0 million in fiscal 2002 compared to $247.8 million in fiscal 2001, with growth primarily in lending activities, funded by increased deposits. The Company used borrowings of $4.0 million from an offering of Capital Securities through
CCF Capital Trust I to support capital needs of the Bank and the related growth of the assets. Shareholders equity increased by approximately $1.9 million, or 12.0%, to $17.7 million at December 31, 2002, from $15.8 million at December 31,
2001. The increase was attributable to net income of approximately $1.96 million and an increase of net unrealized holding gains on investment and mortgage backed securities available for sale of approximately $77,000. 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 shareholders equity in accordance with Statement of Financial Accounting Standards (SFAS) No.
115. Because the Companys portfolio of securities is classified as available for sale, volatility in the fair value of such securities could continue during periods of changing market interest rates.

11



---

Comparison of Operating Results For The Fiscal Years Ended December 31, 2002 and December 31, 2001

Net Income. The Companys net income increased by $533,000, or 37.3%, to $1.96 million in 2002 from $1.43 million in 2001. The increase was primarily due to the $967,000 or 10.6% increase
in net interest income from $9.08 million in 2001 to $10.05 million in 2002. Additionally, a decrease of other expenses by 2.4% to $7.69 million in 2002 from $7.88 million in 2001 contributed to the increase in net income. The decrease in other
expenses is primarily due to a one-time pre-tax charge of $492,450 associated with acceleration of the repayment of the loan associated with Companys ESOP and MSBP benefit plans in 2001. The increase in net interest income is primarily due to
the decrease in interest expense paid on deposit accounts outpacing decreases in interest earning assets during 2002. Typically deposit account interest rates require longer adjustment periods when rate reductions are required. The effects of the
Federal Reserve Bank rate reductions in 2001 were not fully realized until approximately mid-year 2002.

Net Interest Income. Net interest income
(before provision for loan losses) increased $967,000, or 10.6%, to $10.05 million in 2002 from $9.08 million in 2001. This increase was primarily due to a decrease in interest expense on deposits of $3.68 million.

Provision For Loan Losses. The Bank increased the provision for loan losses from $662,000 at December 31, 2001 to $1.05 million at December 31, 2002. The increase was due to
managements assessment of the risk inherent in the portfolio and the assessment of the risk relative to the changes in the size of the portfolio as well as external forces such as economic conditions. The Banks allowance for loan losses
increased from $2.1 million at December 31, 2001, to $2.8 million at December 31, 2002. The reserve as a percentage of total outstanding loans was at 1.47% at year-end 2002, as compared to 1.14% at year-end 2001. The Bank periodically evaluates the
adequacy of the allowance for loan losses based on a review of all significant loans, with particular emphasis on impaired, non-performing, past due and other loans that management believes require special attention. The Bank also utilized an
independent loan review process in assessing the overall adequacy of the allowance for loan losses. Management believes that the allowance for loan losses is adequate. Management will continue to monitor and adjust the allowance as necessary in
future periods based on growth in the loan portfolio, loss experience, condition of borrowers, and continued monitoring of local economic conditions, as well as, any other external factors. If the size of the loan portfolio continues to increase and
the relative proportion in the portfolio of commercial and construction loans increases, it is expected that the provision for loan losses will increase in order to maintain the allowance for loan losses at an adequate level.

The following table sets forth the allocation of the allowance for loan losses by loan category and the percent of loans in each loan category to total loans for the periods indicated.



|                                        |  | At December 31, 2002   |       | At December 31, 2001                          |       
|--------------------------------------- |  | ---------------------- | ----- | --------------------------------------------- | ------
|                                        |  |                        |       |                                               |       
|                                        |  | AllocatedAllowance     |       | Percent ofLoans in eachCategory
toTotal Loans |       
|                                        |  |                        |       |                                               |       
|                                        |  | (Dollars in Thousands) |      
|Balance at end of period applicable to: |  |                        |       |                                               |       
|Permanent residential mortgage          |  | $                      | 48    |                                               | 5.94  
|Construction Acquisition & Development  |  | 922                    |       | 27.46                                         | %     
|Commercial and commercial real estate   |  | 1,604                  |       | 55.29                                         | %     
|Consumer and other                      |  | 280                    |       | 11.31                                         | %     
|                                        |  |                        |       |                                               |       
|Total                                   |  | $                      | 2,854 |                                               | 100.00
|                                        |  |                        |       |                                               |       

12



---

Other Income. Other income increased by $16,000, or 1.0%, to $1.6 million in 2002 from $1.5 million in 2001. The major component
of the increase was a one-time gain of $413,000 in 2001 realized from the insurance proceeds resulting from the fire loss at the Banks Forest Park office, which occurred in June 2000. In 2002, increases in service charges on deposit accounts
amounted to $175,000 or 23.7% over 2001, from $735,000 in 2001 to $910,000 in 2002. Other operating income increased $208,000 from $354,000 in 2001, to $563,000 in 2002. This was due primarily to an increase in income from bank owned life insurance
of $140,000 or 190.8% from $73,000 in 2001 to $213,000 in 2002. Additionally, income from investment services increased $33,000 from $146,000 in 2001 to $179,000 in 2002.

Other Expenses. Other expenses decreased from $7.9 million in 2001 to $7.7 million in 2002, representing a 2.7% decrease. Included in this decrease is a decrease of $290,000 in salaries and benefits. Salaries and
benefits in 2001 included $492,000 associated with acceleration of the principal repayments on the Companys ESOP and MSBP benefits plans. Occupancy expenses and other expenses increased $80,000 or 2.4% from $3.2 million in 2001 to $3.3 million
in 2002.

Income Tax Expense. Income tax expense as a percent of income before taxes was 31.7% in 2001 and 2002.

Liquidity. The Bank is required to maintain minimum levels of liquid assets as defined by the State of Georgia and FDIC regulations. The Banks short-term liquidity at
December 31, 2002, was 17.47%, which was above the Banks goal of 15%. The Bank continues to search for deposits and other means of meeting its loan demand. The Bank adjusts its liquidity level as appropriate to meet its asset/liability
objectives. The primary sources 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 Bank has
the ability to borrow from the FHLB and other correspondent banks. These commitments totaled $35.5 million at December 31, 2002 with $5.0 million in outstanding balances. Scheduled 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 Bank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 accounting principles generally accepted in the United States of America, 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 Banks assets
and liabilities are critical to the maintenance of acceptable performance levels.

Other Important Events. The Bank closed its Morrow, Georgia office in
July 2001. The inability to grow deposits and income in the Morrow office location was the primary factor in this decision. The existing deposits of the Morrow office have been consolidated into the Forest Park and Jonesboro branches in Clayton
County.

13



---

The Bank completed construction of its second branch location in Fayette County, Georgia in November 2001. This location, Towne Center, is an out parcel of a
major retail shopping center located in an area of residential housing and retail shopping.

In December 2001, the Company settled with the insurance provider resulting in the
pretax gain amount of $413,000 related to the property loss due to fire at the Forest Park office. The Company renovated an existing building and constructed a drive-thru facility on the same site during the third quarter of 2001.

In February 2002, the Bank sold the property owned on Georgia Highway 155 in Stockbridge, originally acquired for a future branch location. The Bank had concerns that zoning and infrastructure
issues would unduly delay our intended use of the property.

The Bank sold property it owned on Georgia Highway 20/81
in McDonough to a group of investors in December 2002. The investors have included in their plan the construction of a branch for the Bank. The Company has entered into a long-term lease agreement for this purpose and expects to occupy the branch
facility in late summer 2003.

14



---









REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of DirectorsCCF Holding Company

We have audited the accompanying consolidated balance sheets
of CCF Holding Company and subsidiaries as of December 31, 2002 and 2001 and the related consolidated statements of earnings, comprehensive income, shareholders equity, and cash flows for the years then ended. 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion,
the consolidated financial statements referred to above present fairly, in all material respects, the financial position of CCF Holding Company and subsidiaries as of December 31, 2002 and 2001, and the results of their operations and their cash
flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.



/s/ Porter Keadle Moore, LLP

Atlanta,GeorgiaFebruary 14, 2003

15



---

CCF HOLDING COMPANY AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2002 and 2001



|                                                                                                                                                     |  | 2002        |             | 2001        |            
|---------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------- | ----------- | ----------- | -----------
|                                                                                                                                                     |  |             |             |             |            
|                                                                                                                                                     |  |             |             |             |            
|Assets                                                                                                                                               |  |             |             |             |            
|                                                                                                                                                     |  |             |             |             |            
|Cash and due from banks, including reserve requirements of $100,000 and
$1,757,000                                                                   |  | $           | 7,181,709   |             |            
|Interest-bearing deposits in other financial
institutions                                                                                            |  | 7,396,251   |             | 262,282     |            
|Federal funds sold                                                                                                                                   |  | 8,120,227   |             | 5,210,000   |            
|                                                                                                                                                     |  |             |             |             |            
|                                                                                                                                                     |  |             |             |             |            
|Cash and cash equivalents                                                                                                                            |  | 22,698,187  |             | 11,998,893  |            
|                                                                                                                                                     |  |             |             |             |            
|Investment securities available-for-sale                                                                                                             |  | 33,569,843  |             | 37,357,827  |            
|Federal Home Loan Bank stock, at cost                                                                                                                |  | 750,000     |             | 880,000     |            
|Loans, net                                                                                                                                           |  | 190,968,808 |             | 185,655,858 |            
|Premises and equipment, net                                                                                                                          |  | 6,858,478   |             | 7,517,211   |            
|Accrued interest receivable                                                                                                                          |  | 1,127,988   |             | 1,374,672   |            
|Cash surrender value of life insurance                                                                                                               |  | 4,341,591   |             | 1,475,608   |            
|Other assets                                                                                                                                         |  | 1,677,695   |             | 1,540,415   |            
|                                                                                                                                                     |  |             |             |             |            
|                                                                                                                                                     |  |             |             |             |            
|                                                                                                                                                     |  | $           | 261,992,590 |             | 247,800,484
|                                                                                                                                                     |  |             |             |             |            
|                                                                                                                                                     |  |             |             |             |            
|Liabilities and Shareholders
Equity                                                                                                                 |  |             |             |             |            
|                                                                                                                                                     |  |             |             |             |            
|Deposits:                                                                                                                                            |  |             |             |             |            
|Noninterest-bearing demand deposits                                                                                                                  |  | $           | 23,609,262  |             | 18,085,791 
|Interest-bearing demand deposits                                                                                                                     |  | 83,893,015  |             | 73,860,275  |            
|Savings accounts                                                                                                                                     |  | 6,937,688   |             | 6,462,333   |            
|Time deposits less than $100,000                                                                                                                     |  | 88,921,841  |             | 91,407,010  |            
|Time deposits greater than $100,000                                                                                                                  |  | 28,425,650  |             | 27,438,706  |            
|                                                                                                                                                     |  |             |             |             |            
|                                                                                                                                                     |  |             |             |             |            
|Total deposits                                                                                                                                       |  | 231,787,456 |             | 217,254,115 |            
|                                                                                                                                                     |  |             |             |             |            
|Securities sold under agreements to repurchase                                                                                                       |  | 2,084,604   |             | 2,415,542   |            
|Federal Home Loan Bank advances                                                                                                                      |  | 5,000,000   |             | 8,000,000   |            
|Line of credit                                                                                                                                       |  |            |             | 2,500,000   |            
|Notes payable                                                                                                                                        |  | 4,000,000   |             |            |            
|Other liabilities                                                                                                                                    |  | 1,380,300   |             | 1,817,630   |            
|                                                                                                                                                     |  |             |             |             |            
|                                                                                                                                                     |  |             |             |             |            
|Total liabilities                                                                                                                                    |  | 244,252,360 |             | 231,987,287 |            
|                                                                                                                                                     |  |             |             |             |            
|                                                                                                                                                     |  |             |             |             |            
|Commitments                                                                                                                                          |  |             |             |             |            
|Shareholders equity:                                                                                                                                |  |             |             |             |            
|Preferred stock, no par value; 1,000,000 shares authorized; none issued and
outstanding                                                              |  |            |             |            |            
|Common stock, $.10 par value, 4,000,000 shares
authorized; 1,466,767 issued and outstanding in 2002; 1,468,808 shares issued and outstanding in 2001 |  | 146,677     |             | 146,881     |            
|Additional paid-in capital                                                                                                                           |  | 9,005,946   |             | 9,045,065   |            
|Retained earnings                                                                                                                                    |  | 8,260,523   |             | 6,371,172   |            
|Accumulated other comprehensive income                                                                                                               |  | 327,084     |             | 250,079     |            
|                                                                                                                                                     |  |             |             |             |            
|                                                                                                                                                     |  |             |             |             |            
|Total shareholders equity                                                                                                                           |  | 17,740,230  |             | 15,813,197  |            
|                                                                                                                                                     |  |             |             |             |            
|                                                                                                                                                     |  |             |             |             |            
|                                                                                                                                                     |  | $           | 261,992,590 |             |            
|                                                                                                                                                     |  |             |             |             |            

See accompanying notes to consolidated financial
statements.



16



---

CCF HOLDING COMPANY AND SUBSIDIARIES

Consolidated Statements of Earnings

For the Years Ended December 31, 2002 and 2001



|                                                                                 |  | 2002       |            | 2001       |          
|-------------------------------------------------------------------------------- |  | ---------- | ---------- | ---------- | ---------
|                                                                                 |  |            |            |            |          
|Interest and dividend income:                                                    |  |            |            |            |          
|Interest and fees on loans                                                       |  | $          | 14,744,978 |            |          
|Interest bearing deposits in other financial institutions and federal funds
sold |  | 233,561    |            | 543,102    |          
|Interest and dividends on taxable investment securities                          |  | 1,091,528  |            | 1,615,891  |          
|Interest on nontaxable investment securities                                     |  | 185,765    |            | 170,004    |          
|                                                                                 |  |            |            |            |          
|                                                                                 |  |            |            |            |          
|Total interest income                                                            |  | 16,255,832 |            | 18,831,940 |          
|                                                                                 |  |            |            |            |          
|                                                                                 |  |            |            |            |          
|Interest expense:                                                                |  |            |            |            |          
|Deposit accounts                                                                 |  | 5,811,887  |            | 9,497,179  |          
|Other borrowings                                                                 |  | 392,838    |            | 250,606    |          
|                                                                                 |  |            |            |            |          
|                                                                                 |  |            |            |            |          
|Total interest expense                                                           |  | 6,204,725  |            | 9,747,785  |          
|                                                                                 |  |            |            |            |          
|                                                                                 |  |            |            |            |          
|Net interest income                                                              |  | 10,051,107 |            | 9,084,155  |          
|                                                                                 |  |            |            |            |          
|Provision for loan losses                                                        |  | 1,053,750  |            | 662,451    |          
|                                                                                 |  |            |            |            |          
|                                                                                 |  |            |            |            |          
|Net interest income after provision for loan losses                              |  | 8,997,357  |            | 8,421,704  |          
|                                                                                 |  |            |            |            |          
|                                                                                 |  |            |            |            |          
|Other operating income:                                                          |  |            |            |            |          
|Service charges on deposit accounts                                              |  | 909,596    |            | 734,997    |          
|Net gain on sale of investment securities                                        |  | 33,947     |            | 47,297     |          
|Gain on disposal of fixed assets                                                 |  | 59,482     |            | 413,145    |          
|Other                                                                            |  | 562,640    |            | 354,049    |          
|                                                                                 |  |            |            |            |          
|                                                                                 |  |            |            |            |          
|Total other operating income                                                     |  | 1,565,665  |            | 1,549,488  |          
|                                                                                 |  |            |            |            |          
|                                                                                 |  |            |            |            |          
|Other operating expenses:                                                        |  |            |            |            |          
|Salaries and employee benefits                                                   |  | 4,363,103  |            | 4,653,286  |          
|Occupancy                                                                        |  | 1,622,045  |            | 1,518,882  |          
|Other                                                                            |  | 1,704,114  |            | 1,706,572  |          
|                                                                                 |  |            |            |            |          
|                                                                                 |  |            |            |            |          
|Total other operating expenses                                                   |  | 7,689,262  |            | 7,878,740  |          
|                                                                                 |  |            |            |            |          
|                                                                                 |  |            |            |            |          
|Earnings before income taxes                                                     |  | 2,873,760  |            | 2,092,452  |          
|                                                                                 |  |            |            |            |          
|Income tax expense                                                               |  | 911,070    |            | 663,157    |          
|                                                                                 |  |            |            |            |          
|                                                                                 |  |            |            |            |          
|Net earnings                                                                     |  | $          | 1,962,690  |            | 1,429,295
|                                                                                 |  |            |            |            |          
|                                                                                 |  |            |            |            |          
|Basic earnings per share                                                         |  | $          | 1.34       |            | .98      
|                                                                                 |  |            |            |            |          
|Diluted earnings per share                                                       |  | $          | 1.26       |            |          
|                                                                                 |  |            |            |            |          

See accompanying notes to consolidated financial
statements.



17



---

CCF HOLDING COMPANY AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the Years Ended December 31, 2002 and 2001



|                                                                                           |  | 2002    |           | 2001     |          
|------------------------------------------------------------------------------------------ |  | ------- | --------- | -------- | ---------
|                                                                                           |  |         |           |          |          
|                                                                                           |  |         |           |          |          
|Net earnings                                                                               |  | $       | 1,962,690 |          | 1,429,295
|                                                                                           |  |         |           |          |          
|                                                                                           |  |         |           |          |          
|Other comprehensive income:                                                                |  |         |           |          |          
|Unrealized holding gains on investment securities available-for-sale                       |  | 152,417 |           | 414,583  |          
|Associated taxes                                                                           |  | (53,346 | )         | (145,104 | )        
|                                                                                           |  |         |           |          |          
|Reclassification adjustment for gains on sales of investment securities
available-for-sale |  | (33,947 | )         | (47,297  | )        
|Associated taxes                                                                           |  | 11,881  |           | 16,554   |          
|                                                                                           |  |         |           |          |          
|                                                                                           |  |         |           |          |          
|Total other comprehensive income, net of tax                                               |  | 77,005  |           | 238,736  |          
|                                                                                           |  |         |           |          |          
|                                                                                           |  |         |           |          |          
|Total comprehensive income                                                                 |  | $       | 2,039,695 |          | 1,668,031
|                                                                                           |  |         |           |          |          

See accompanying notes to consolidated financial
statements.



18



---

CCF HOLDING COMPANY AND SUBSIDIARIES

Consolidated Statements of Shareholders Equity

For the Years Ended December 31, 2002 and 2001



|                                                                         |  | Common Stock |           | AdditionalPaid-inCapital |         | RetainedEarnings |           | UnearnedESOP |           | UnearnedCompensation |          | Treasury Stock |          | AccumulatedOtherComprehensiveIncome |       |        |  
|------------------------------------------------------------------------ |  | ------------ | --------- | ------------------------ | ------- | ---------------- | --------- | ------------ | --------- | -------------------- | -------- | -------------- | -------- | ----------------------------------- | ----- | ------ | -
|                                                                         |  |              |           |                          |         |                  |           |              |           |                      |          |               
|                                                                         |  | Shares       |           | Amount                   |         |                  |           |              |           | Shares               |          | Amount         |          |                                     | Total |       
|                                                                         |  |              |           |                          |         |                  |           |              |           |                      |          |                |          |                                     |       |        |  
|Balance, December 31, 2000                                               |  | 1,477,767    |           | $                        | 147,777 |                  | 9,042,284 |              | 4,941,877 |                      | (324,000 | )              | (153,144 | )                                   | 5,423 |        | $
|                                                                         |  |              |           |                          |         |                  |           |              |           |                      |          |                |          |                                     |       |        |  
|Net earnings                                                             |  |             |           |                         |         |                 |           | 1,429,295    |           |                     |          |               |          |                                    |       |       |  
|Retirement of common stock                                               |  | (3,536       | )         | (354                     | )       | (27,348          | )         |             |           |                     |          |               |          |                                    |       |       |  
|Retirement of treasury stock                                             |  | (5,423       | )         | (542                     | )       | (35,189          | )         |             |           |                     |          |               |          | (5,423                              | )     | 35,731 |  
|ESOP shares allocated                                                    |  |             |           |                         |         | 65,318           |           |             |           | 324,000              |          |               |          |                                    |       |       |  
|Earned compensation under management stock bonus plan                    |  |             |           |                         |         |                 |           |             |           |                     |          | 153,144        |          |                                    |       |       |  
|Unrealized gains on investment Securities available-for-sale, net of
tax |  |             |           |                         |         |                 |           |             |           |                     |          |               |          |                                    |       |       |  
|                                                                         |  |              |           |                          |         |                  |           |              |           |                      |          |                |          |                                     |       |        |  
|                                                                         |  |              |           |                          |         |                  |           |              |           |                      |          |                |          |                                     |       |        |  
|Balance, December 31, 2001                                               |  | 1,468,808    |           | 146,881                  |         | 9,045,065        |           | 6,371,172    |           |                     |          |               |          |                                    |       |       |  
|                                                                         |  |              |           |                          |         |                  |           |              |           |                      |          |                |          |                                     |       |        |  
|Net earnings                                                             |  |             |           |                         |         |                 |           | 1,962,690    |           |                     |          |               |          |                                    |       |       |  
|Cash paid in lieu of fractional shares                                   |  | (58          | )         | (6                       | )       | (1,326           | )         |             |           |                     |          |               |          |                                    |       |       |  
|Retirement of common stock                                               |  | (2,733       | )         | (273                     | )       | (42,717          | )         |             |           |                     |          |               |          |                                    |       |       |  
|Exercised stock options                                                  |  | 750          |           | 75                       |         | 4,924            |           |             |           |                     |          |               |          |                                    |       |       |  
|Cash dividend declared ($.05)                                            |  |             |           |                         |         |                 |           | (73,339      | )         |                     |          |               |          |                                    |       |       |  
|                                                                         |  |              |           |                          |         |                  |           |              |           |                      |          |                |          |                                     |       |        |  
|Unrealized gains on investment Securities available-for-sale, net of tax |  |             |           |                         |         |                 |           |             |           |                     |          |               |          |                                    |       |       |  
|                                                                         |  |              |           |                          |         |                  |           |              |           |                      |          |                |          |                                     |       |        |  
|                                                                         |  |              |           |                          |         |                  |           |              |           |                      |          |                |          |                                     |       |        |  
|Balance, December 31, 2002                                               |  |              | 1,466,767 |                          | $       | 146,677          |           |              | 9,005,946 |                      |          | 8,260,523      |          |                                     |      |        |  
|                                                                         |  |              |           |                          |         |                  |           |              |           |                      |          |                |          |                                     |       |        |  

See accompanying notes to consolidated financial
statements.

19



---

CCF HOLDING COMPANY AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2002 and 2001



|                                                                                     |  | 2002        |            | 2001        |           
|------------------------------------------------------------------------------------ |  | ----------- | ---------- | ----------- | ----------
|                                                                                     |  |             |            |             |           
|Cash flows from operating activities:                                                |  |             |            |             |           
|Net earnings                                                                         |  | $           | 1,962,690  |             | 1,429,295 
|Adjustments to reconcile net earnings to net cash provided by operating
activities:  |  |             |            |             |           
|Provision for loan losses                                                            |  | 1,053,750   |            | 662,451     |           
|Depreciation, amortization and accretion                                             |  | 783,670     |            | 410,202     |           
|Deferred income tax benefit                                                          |  | (383,867    | )          | (70,345     | )         
|Allocations related to ESOP and MSBP benefits                                        |  |            |            | 542,462     |           
|Net gain on sale of investment securities available-for-sale                         |  | (33,947     | )          | (47,297     | )         
|Net gain on disposal sale of premises and equipment                                  |  | (59,482     | )          | (413,145    | )         
|Increase in cash surrender value of life insurance                                   |  | (213,319    | )          | (73,360     | )         
|Change in accrued interest receivable                                                |  | 246,684     |            | 334,194     |           
|Change in other assets                                                               |  | (23,072     | )          | (36,217     | )         
|Change in other liabilities                                                          |  | (510,669    | )          | (245,292    | )         
|                                                                                     |  |             |            |             |           
|Net cash provided by operating activities                                            |  | 2,822,438   |            | 2,492,948   |           
|                                                                                     |  |             |            |             |           
|Cash flows from investing activities:                                                |  |             |            |             |           
|Proceeds from maturities and called investment securities available-for-sale         |  | 30,871,688  |            | 43,060,919  |           
|Proceeds from sales of investment securities available-for-sale                      |  | 2,043,990   |            | 6,771,890   |           
|Purchases of investment securities available-for-sale                                |  | (29,101,551 | )          | (50,196,765 | )         
|Sale of FHLB stock                                                                   |  | 130,000     |            |            |           
|Net increase in loans                                                                |  | (6,366,700  | )          | (14,979,856 | )         
|Proceeds from sale of foreclosed property                                            |  | 228,195     |            | 213,928     |           
|Purchases of premises and equipment                                                  |  | (371,030    | )          | (1,721,390  | )         
|Proceeds from sale of equipment                                                      |  | 431,848     |            |            |           
|Purchase of life insurance policies                                                  |  | (2,652,664  | )          |            |           
|Proceeds from insurance policies related to the destruction of
premises              |  |            |            | 483,813     |           
|                                                                                     |  |             |            |             |           
|Net cash used in investing activities                                                |  | (4,786,224  | )          | (16,293,969 | )         
|                                                                                     |  |             |            |             |           
|Cash flows from financing activities:                                                |  |             |            |             |           
|Net increase in deposits                                                             |  | 14,533,341  |            | 8,839,040   |           
|Change in securities sold under agreements to repurchase                             |  | (330,938    | )          | 589,054     |           
|Federal Home Loan Bank advances                                                      |  | 5,000,000   |            | 8,000,000   |           
|Repayment of Federal Home Loan Bank advances                                         |  | (8,000,000  | )          |            |           
|Repayment of line of credit                                                          |  | (2,500,000  | )          |            |           
|Proceeds from issuance of trust preferred securities                                 |  | 4,000,000   |            |             |           
|Dividends paid                                                                       |  |            |            | (74,406     | )         
|Exercise of stock options                                                            |  | 4,999       |            |            |           
|Retirement of common stock                                                           |  | (44,322     | )          | (27,702     | )         
|                                                                                     |  |             |            |             |           
|Net cash provided by financing activities                                            |  | 12,663,080  |            | 17,325,986  |           
|                                                                                     |  |             |            |             |           
|Increase in cash and cash equivalents                                                |  | 10,699,294  |            | 3,451,473   |           
|                                                                                     |  |             |            |             |           
|Cash and cash equivalents at beginning of period                                     |  | 11,998,893  |            | 8,547,420   |           
|                                                                                     |  |             |            |             |           
|Cash and cash equivalents at end of period                                           |  | $           | 22,698,187 |             | 11,998,893
|                                                                                     |  |             |            |             |           
|Supplemental disclosures for cash flow information and noncash financing
activities: |  |             |            |             |           
|Interest paid                                                                        |  | $           | 6,358,991  |             | 9,934,778 
|                                                                                     |  |             |            |             |           
|Income taxes paid                                                                    |  | $           | 1,237,217  |             | 746,000   
|                                                                                     |  |             |            |             |           
|Changes in dividends payable                                                         |  | $           | 73,339     |             | 74,406    
|                                                                                     |  |             |            |             |           

See accompanying notes to consolidated financial
statements.

20



---

CCF HOLDING COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(1)Summary of Significant Accounting Policies

Organization

CCF Holding Company (the Company) is incorporated in the state of Georgia as a state chartered bank holding company whose business is conducted by its wholly
owned bank subsidiary, Heritage Bank (the Bank). The Company and the Bank are primarily regulated by the State of Georgia Department of Banking and Finance (the GDBF) and the Federal Deposit Insurance Corporation (the
FDIC) and are subject to periodic examinations by these regulatory authorities.

The Bank provides a full range of banking services to individual
and corporate customers through its main office in Jonesboro, Georgia and four Georgia branch offices located in Clayton, Fayette and Henry Counties. The Bank primarily competes with other financial institutions in its market area, which it
considers to be South Metropolitan Atlanta.

Basis of Presentation

The consolidated financial statements include the accounts of the Company and the Bank. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain 2001 amounts have been
reclassified to conform to the 2002 presentation.

The accounting principles followed by the Company and the methods of applying these principles, conform
with accounting principles generally accepted in the United States of America (GAAP) and with general practices within the banking industry. In preparing financial statements in conformity with GAAP, management is required to make
estimates and assumptions that affect the reported amounts in the financial statements. Actual results could differ significantly from those estimates. Material estimates common to the banking industry that are particularly susceptible to
significant change in the near term include, but are not limited to, the determination of the allowance for loan losses and the valuation of real estate acquired in connection with or in lieu of foreclosure on loans.

Cash and Cash Equivalents

For purposes of the consolidated statements of cash
flows, the Company considers amounts due from banks, interest-bearing deposits in other financial institutions and federal funds sold to be cash equivalents.

Investment Securities

The Company classifies its securities in one of three categories: trading, available-for-sale, or held-to-maturity. Trading
securities are bought and held principally for sale in the near term. Held-to-maturity securities are those securities for which the Company has the ability and intent to hold until maturity. All other securities not included in trading or
held-to-maturity are classified as available-for-sale. The Companys current investment policy prohibits trading activity.

Held-to-maturity securities
are recorded at cost, adjusted for the amortization or accretion of premiums or discounts. Transfers of securities between categories are recorded at fair value at the date of transfer. Unrealized holding gains or losses associated with transfers of
securities from held-to-maturity to available-for-sale are recorded as a separate component of shareholders equity.

Available-for-sale securities
consist of investment securities not classified as trading securities or held-to-maturity securities and are recorded at fair value. Unrealized holding gains and losses on securities available-for-sale are excluded from earnings and are reported as
a separate component of shareholders equity until realized.

A decline in the market value of any available-for-sale or held-to-maturity investment
below cost that is deemed other than temporary is charged to earnings and establishes a new cost basis for the security.

Premiums and discounts are amortized
or accreted over the life of the related security as an adjustment to the yield. Realized gains and losses for securities classified as available-for-sale and held-to-maturity are included in earnings and are derived using the specific
identification method for determining the cost of securities sold.

Federal Home Loan Bank Stock

Investment in Federal Home Loan Bank stock is required of federally insured financial institutions that utilize their services. No ready market exists for the stock and it has no quoted market value.

21



---

CCF HOLDING COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements, continued

(1)Summary of Significant Accounting Policies, continued

Loans and Allowance for
Loan Losses

Loans that management has the intent and ability to hold for the foreseeable future or until maturity are reported at the principal amount
outstanding, net of the allowance for loan losses and any deferred fees or costs on originated loans. Interest on all loans is calculated using the simple interest method on the daily balance of the principal amount outstanding.

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 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.

A loan is
considered impaired when, based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreement will not be collected. Impaired loans are 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 at the fair value of the collateral of the loan if the loan is collateral dependent. Interest income from impaired loans is
recognized using a cash basis method of accounting.

Allowance for Loan Losses

The allowance for loan losses is established through a provision for loan losses charged to expense. Loans are charged against the allowance for loan losses when management believes that the collection of principal is
unlikely. The Bank has established a loan grading system whose classifications are consistent with those used by the Banks regulators. Management utilizes this system to evaluate the adequacy of its allowance for loan losses. Allocations of
loss are calculated based on expected loss ratios for each loan classification. These ratios have been determined considering the Banks historical loss rates and losses experienced by its peer group. For individually significant loans deemed
to be impaired, a specific allowance is established based on the expected collectibility considering the borrowers cash flow and the adequacy of the collateral coverage. The results of the Banks evaluation are compared to the recorded
allowance for loan losses and significant deviations are adjusted by increasing or decreasing the provision for loan losses. Additionally, management utilizes the services of an independent third party loan reviewer to validate its internal grading
system and to provide additional analysis in determining the adequacy of the allowance.

Management believes 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 allowance for loan losses. Such agencies may require the Bank to recognize additions to the allowance based on their judgment of information available to them at the time of their examination.

Premises and Equipment

Premises and equipment are stated at cost less
accumulated depreciation. Major additions and improvements are charged to the asset accounts while maintenance and repairs that do not improve or extend the useful lives of the assets are expensed. When assets are retired or otherwise disposed, the
cost and related accumulated depreciation are removed from the accounts, and any gain or loss is reflected in earnings for the period. Depreciation is recorded on a straight-line basis over the following estimated useful lives of the related assets:



|Building and improvements | 5 - 40 years
|------------------------- | ------------
|Furniture and equipment   | 2 - 10 years

Securities Sold Under Agreements To Repurchase

Securities sold under agreements to repurchase are secured borrowings
from customers, are treated as financing activities, and are carried at the amounts at which the securities will be subsequently reacquired as specified in the respective agreements.

22



---

CCF HOLDING COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements, continued

(1)Summary of Significant Accounting Policies, continued

Income Taxes

Deferred tax assets and liabilities are recorded for the future tax consequences attributable to 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 the assets and liabilities are expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income tax expense in the period that includes the enactment date.

In the event the future tax
consequences of differences between the financial reporting bases and the tax bases of the Companys assets and liabilities result in deferred tax assets, an evaluation of the probability of being able to realize the future benefits indicated
by such asset is required. A valuation allowance is provided for the portion of the deferred tax asset when it is more likely than not that some portion or all of the deferred tax asset will not be realized. In assessing the realizability of the
deferred tax assets, management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies.

Stock Compensation Plans

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



|                           |  |             |  | 2002 |           | 2001 |          
|-------------------------- |  | ----------- |  | ---- | --------- | ---- | ---------
|                           |  |             |  |      |           |      |          
|Net earnings               |  | As reported |  | $    | 1,962,690 |      | 1,429,295
|                           |  | Proforma    |  | $    | 1,889,294 |      | 1,281,182
|                           |  |             |  |      |           |      |          
|Basic earnings per share   |  | As reported |  | $    | 1.34      |      | .98      
|                           |  | Proforma    |  | $    | 1.29      |      | .83      
|                           |  |             |  |      |           |      |          
|Diluted earnings per share |  | As reported |  | $    | 1.26      |      | .94      
|                           |  | Proforma    |  | $    | 1.21      |      | .79      

The weighted average fair value of options
granted was $5.12 and $6.36 for the years ended December 31, 2002 and 2001, respectively, based on estimates as of the date of grant using the Black Scholes pricing model. The following weighted average assumptions were used for grants in 2002 and
2001, respectively: dividend yield of .003% and 0.0%, a risk free interest rate of 3.5% and 4.8%, expected volatility of 23% and 32%, respectively, and an expected life of seven years. The difference between the net earnings as reported and proforma
is the expense associated with the grants which would have been earned in the period. This expense was calculated based on the number of options vested during the period multiplied by the fair value at the time of grant net of tax effect.

Comprehensive Income

GAAP generally requires that
recognized revenues, expenses, gains and losses be included in net earnings. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the equity
section of the consolidated balance sheets, such items along with net earnings, are components of comprehensive income. The Company presents comprehensive income in a separate consolidated statement of comprehensive income.

23



---

CCF HOLDING COMPANY AND SUBSIDIARIESNotes to Consolidated Financial Statements, continued

(1)Summary of Significant Accounting Policies,
continued

Net Earnings Per Share

During 2002, the
Company announced a three for two stock split effected in the form of a stock dividend for shareholders of record on December 4, 2002. All share and per share amounts included in the financial statements and accompanying notes have been restated to
reflect the change in the number of shares outstanding as of the beginning of the earliest period presented.

Basic earnings per share are based on the
weighted average number of common shares outstanding during the period while the effects of potential shares outstanding during the period are included in diluted earnings per share. The reconciliation of the amounts used in the computation of both
basic earnings per share and diluted earnings per share for each period is presented as follows:



|For the year ended December 31, 2002 |  | NetEarnings |           | CommonShares |           | Per ShareAmount |  
|------------------------------------ |  | ----------- | --------- | ------------ | --------- | --------------- | -
|                                     |  |             |           |              |           |                 |  
|                                     |  |             |           |              |           |                 |  
|Basic earnings per share             |  | $           | 1,962,690 |              | 1,467,371 |                 | $
|                                     |  |             |           |              |           |                 |  
|Effect of stock options              |  |            |           | 96,417       |           | (.08            | )
|                                     |  |             |           |              |           |                 |  
|Diluted earnings per share           |  | $           | 1,962,690 |              | 1,563,788 |                 | $
|                                     |  |             |           |              |           |                 |  



|For the year ended December 31, 2001 |  | NetEarnings |           | CommonShares |           | Per ShareAmount |  
|------------------------------------ |  | ----------- | --------- | ------------ | --------- | --------------- | -
|                                     |  |             |           |              |           |                 |  
|                                     |  |             |           |              |           |                 |  
|Basic earnings per share             |  | $           | 1,429,295 |              | 1,464,761 |                 | $
|                                     |  |             |           |              |           |                 |  
|Effect of stock options              |  |            |           | 48,297       |           | (.04            | )
|                                     |  |             |           |              |           |                 |  
|                                     |  |             |           |              |           |                 |  
|Diluted earnings per share           |  | $           | 1,429,295 |              | 1,513,158 |                 | $
|                                     |  |             |           |              |           |                 |  

(2)Investment Securities Available-for-Sale

At December 31,
2002 and 2001, investment securities available-for-sale consisted of the following:



|                                                     |  | December 31, 2002 |           
|---------------------------------------------------- |  | ----------------- | ----------
|                                                     |  |                   |           
|                                                     |  | AmortizedCost     |           
|                                                     |  |                   |           
|U.S. Treasury and U.S. Government agency obligations |  | $                 | 28,044,730
|Municipal securities                                 |  | 3,556,263         |           
|Mortgage-backed securities                           |  | 1,465,643         |           
|                                                     |  |                   |           
|                                                     |  | $                 | 33,066,636
|                                                     |  |                   |           



|                                                     |  | December 31, 2001 |           
|---------------------------------------------------- |  | ----------------- | ----------
|                                                     |  |                   |           
|                                                     |  | AmortizedCost     |           
|                                                     |  |                   |           
|U.S. Treasury and U.S. Government agency obligations |  | $                 | 33,369,382
|Municipal securities                                 |  | 3,561,126         |           
|Mortgage-backed securities                           |  | 42,582            |           
|                                                     |  |                   |           
|                                                     |  | $                 | 36,973,090
|                                                     |  |                   |           

24



---

CCF HOLDING COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements, continued

(2)Investment Securities Available-for-Sale, continued

For the years ended December 31, 2002 and 2001, the Company sold investment securities
available-for-sale for $2,043,990 and $6,771,890, respectively, with the following gross gains and losses recognized:



|             |  | 2002 |        | 2001   |       
|------------ |  | ---- | ------ | ------ | ------
|             |  |      |        |        |       
|             |  |      |        |        |       
|Gross gains  |  | $    | 33,947 |        | 50,457
|Gross losses |  |     |        | (3,160 | )     
|             |  |      |        |        |       
|             |  |      |        |        |       
|Net gain     |  | $    | 33,947 |        |       
|             |  |      |        |        |       

The amortized cost and fair values of securities
available-for-sale at December 31, 2002, 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.



|                                      |  | AmortizedCost |            | FairValue |           
|------------------------------------- |  | ------------- | ---------- | --------- | ----------
|                                      |  |               |            |           |           
|                                      |  |               |            |           |           
|Due within one year                   |  | $             | 18,016,351 |           | 18,080,924
|Due after one year through five years |  | 9,691,274     |            | 9,896,945 |           
|Due after five years                  |  | 3,893,368     |            | 4,108,022 |           
|Mortgage-backed securities            |  | 1,465,643     |            | 1,483,952 |           
|                                      |  |               |            |           |           
|                                      |  |               |            |           |           
|                                      |  | $             | 33,066,636 |           |           
|                                      |  |               |            |           |           

Investment securities with approximate aggregate
carrying amounts of $23,385,000 and $22,035,000 at December 31, 2002 and December 31, 2001, respectively, were pledged to secure public deposits and repurchase agreements.

(3)Loans

Major classifications of
loans at December 31, 2002 and 2001 are presented below:



|                               |  | 2002 |             | 2001 |             | 
|------------------------------ |  | ---- | ----------- | ---- | ----------- | 
|                               |  |      |             |      |             | 
|                               |  |      |             |      |             | 
|Commercial real estate         |  | $    | 89,009,212  |      | 81,944,539  | 
|Commercial                     |  |      | 18,356,555  |      | 13,376,677  | 
|Real estate - mortgage         |  |      | 11,528,958  |      | 13,680,528  | 
|Real estate - construction     |  |      | 53,322,147  |      | 51,336,737  | 
|Installment and other consumer |  |      | 21,972,117  |      | 27,946,493  | 
|                               |  |      |             |      |             | 
|                               |  |      |             |      |             | 
|Total loans                    |  |      | 194,188,989 |      | 188,284,974 | 
|Less: Unearned fees            |  |      | 366,431     |      | 479,752     | 
|Allowance for loan losses      |  |      | 2,853,750   |      | 2,149,364   | 
|                               |  |      |             |      |             | 
|Total loans, net               |  | $    | 190,968,808 |      | 185,655,858 | 
|                               |  |      |             |      |             | 
|                               |  |      |             |      |             | 

The Company extends credit to customers throughout its market area, which includes the Georgia counties of
Clayton, Fayette and Henry. Most of the Banks loans are collateralized 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. As of December 31, 2002, loans outstanding totaling approximately $21,495,000 were pledged as collateral to the FHLB for outstanding borrowings.

25



---

CCF HOLDING COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements, continued

(3)Loans, continued

An analysis of the activity in the allowance for loan losses is presented below:



|                               |  | 2002       |           | 2001     |          
|------------------------------ |  | ---------- | --------- | -------- | ---------
|                               |  |            |           |          |          
|                               |  |            |           |          |          
|Balance at beginning of period |  | $          | 2,149,364 |          | 1,708,172
|Provision for losses on loans  |  | 1,053,750  |           | 662,451  |          
|Loan charge-offs               |  | (1,018,009 | )         | (272,941 | )        
|Loan recoveries                |  | 668,645    |           | 51,682   |          
|                               |  |            |           |          |          
|                               |  |            |           |          |          
|Balance at end of period       |  | $          | 2,853,750 |          | 2,149,364
|                               |  |            |           |          |          

As of December 31, 2002 and 2001, the Bank serviced
loans for others with approximate outstanding balances of $29,369,000 and $29,214,000, respectively.

(4)Premises and Equipment

A summary of premises and
equipment at December 31, 2002 and 2001 is as follows:



|                               |  | 2002       |           | 2001       |          
|------------------------------ |  | ---------- | --------- | ---------- | ---------
|                               |  |            |           |            |          
|                               |  |            |           |            |          
|Land                           |  | $          | 1,670,272 |            | 1,970,667
|Buildings and improvements     |  | 4,504,274  |           | 4,614,042  |          
|Furniture and equipment        |  | 3,854,971  |           | 3,529,662  |          
|Construction in progress       |  | 104,632    |           | 47,749     |          
|Leasehold improvements         |  | 136,654    |           | 136,654    |          
|                               |  |            |           |            |          
|                               |  |            |           |            |          
|                               |  | 10,270,803 |           | 10,298,774 |          
|                               |  |            |           |            |          
|Less: Accumulated depreciation |  | 3,412,325  |           | 2,781,563  |          
|                               |  |            |           |            |          
|                               |  |            |           |            |          
|                               |  | $          | 6,858,478 |            | 7,517,211
|                               |  |            |           |            |          

Depreciation expense for the years ended December
31, 2002 and 2001 was approximately $657,000 and $622,000, respectively. During 2000, the Company incurred significant damage to its Forest Park Branch and, as a result, in 2001 the Company received $828,083 in insurance proceeds and retired the
related assets with a recorded basis of $199,290.

(5)Deposits

At December 31, 2002, the scheduled maturities of time deposits are as follows:



|2003 |  | $          | 80,597,846  | 
|---- |  | ---------- | ----------- | 
|2004 |  | 19,646,034 |            
|2005 |  | 7,420,789  |            
|2006 |  | 793,787    |            
|2007 |  | 8,889,035  |            
|     |  |            |            
|     |  |            |            
|     |  | $          | 117,347,491 | 
|     |  |            |             | 

26



---

CCF HOLDING COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements, continued

(6)Income Taxes

The components of income tax expense are as follows:



|                 |  | 2002     |           | 2001    |        
|---------------- |  | -------- | --------- | ------- | -------
|                 |  |          |           |         |        
|                 |  |          |           |         |        
|Current expense  |  | $        | 1,294,937 |         | 733,502
|Deferred benefit |  | (383,867 | )         | (70,345 | )      
|                 |  |          |           |         |        
|                 |  | $        | 911,070   |         | 663,157
|                 |  |          |           |         |        

The differences between income tax expense and the
amount computed by applying the statutory federal income tax rate to earnings before taxes for the years ended December 31, 2002 and 2001 are as follows:



|                                                   |  | 2002    |         | 2001    |        
|-------------------------------------------------- |  | ------- | ------- | ------- | -------
|                                                   |  |         |         |         |        
|                                                   |  |         |         |         |        
|Pretax income at statutory rate                    |  | $       | 977,078 |         | 711,433
|Add (deduct):                                      |  |         |         |         |        
|State income taxes, net of federal effect          |  |        |         | 20,963  |        
|Tax exempt interest                                |  | (63,160 | )       | (57,801 | )      
|Increase in cash surrender value of life insurance |  | (80,172 | )       | (24,942 | )      
|Other                                              |  | 77,324  |         | 13,504  |        
|                                                   |  |         |         |         |        
|                                                   |  |         |         |         |        
|                                                   |  | $       | 911,070 |         | 663,157
|                                                   |  |         |         |         |        

The tax effects of temporary differences that give
rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2002 and 2001, are presented below:



|                                                                 |  | 2002      |           | 2001    |         
|---------------------------------------------------------------- |  | --------- | --------- | ------- | --------
|                                                                 |  |           |           |         |         
|Deferred tax assets:                                             |  |           |           |         |         
|Allowance for loan losses                                        |  | $         | 1,094,986 |         | 774,921 
|Deferred Compensation                                            |  | 56,005    |           |        |         
|State tax credit carryforwards                                   |  |          |           | 62,205  |         
|Other                                                            |  | 12,832    |           | 52,326  |         
|                                                                 |  |           |           |         |         
|                                                                 |  |           |           |         |         
|Total gross deferred tax assets                                  |  | 1,163,823 |           | 889,452 |         
|                                                                 |  |           |           |         |         
|                                                                 |  |           |           |         |         
|Deferred tax liabilities:                                        |  |           |           |         |         
|Deferred loan fees                                               |  | 243,167   |           | 336,097 |         
|Net unrealized gains on investment securities available-for-sale |  | 176,122   |           | 134,658 |         
|Premises and equipment                                           |  | 304,970   |           | 311,824 |         
|Federal Home Loan Bank stock dividends                           |  | 147,095   |           | 147,095 |         
|Other                                                            |  | 58,227    |           | 67,939  |         
|                                                                 |  |           |           |         |         
|                                                                 |  |           |           |         |         
|Total gross deferred tax liabilities                             |  | 929,581   |           | 997,613 |         
|                                                                 |  |           |           |         |         
|                                                                 |  |           |           |         |         
|Net deferred tax assets (liabilities)                            |  | $         | 234,242   |         | (108,161
|                                                                 |  |           |           |         |         

27



---

CCF HOLDING COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements, continued

(6)Income Taxes, continued

Prior to January 1, 1996, the Company was permitted under the Internal Revenue Code (the 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 December 31, 2000 include approximately $675,000 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 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 current corporate income tax rate.

(7)Federal Home Loan Bank Advances and Lines of Credit

At December 31, 2002, the Bank had $21,000,000 available under a
$26,000,000 secured line of credit with the Federal Home Loan Bank (FHLB) of Atlanta. Under the terms of the loan agreement, the FHLB will extend funding to the Bank up to 10% of the Banks assets based on the total assets reported
for the most recent quarter. The available amount is also subject to the availability of qualifying collateral. The total available line noted was based on the Banks total assets as of December 31, 2002. At December 31, 2001, the Bank had
$2,000,000 available under a $10,000,000 secured line of credit with the FHLB.

The following advances were outstanding at December 31, 2002 and 2001 and
require quarterly interest payments:



|            | December 31, 2002 |       |               |       |             |           |          | 
|----------- | ----------------- | ----- | ------------- | ----- | ----------- | --------- | -------- | 
|            | Advance           |       | InterestBasis |       | CurrentRate |           | Maturity | 
|            |                   |       |               |       |             |           |          | 
|            |                   |       |               |       |             |           |          | 
|$ 5,000,000 |                   | Fixed |               | 2.71% |             | July 2004 |         
|            |                   |       |               |       |             |           |          | 



|December 31, 2001 |  |               |  |                 |  |               | 
|----------------- |  | ------------- |  | --------------- |  | ------------- | 
|Advance           |  | InterestBasis |  | CurrentRate     |  | Maturity      | 
|                  |  |               |  |                 |  |               | 
|                  |  |               |  |                 |  |               | 
|$ 5,000,000       |  | Fixed         |  | 2.18%           |  | November 2002 | 
|$ 3,000,000       |  | Variable      |  | FHLB Daily Rate |  | December 2002 | 

At December 31, 2002 and 2001, the facility was collateralized by $6,414,000 and $8,198,000, respectively, of the Banks outstanding 1 to 4 family first mortgage loan portfolio.

The Bank also had unused lines of credit for overnight borrowing of $8,500,000 and $5,000,000 at December 31, 2002 and 2001, respectively.

During 2002, the Company entered into an additional line of credit agreementwith a correspondent bank totaling $1,000,000. Under the new agreement, the line
accrues interest at prime minus 100 basis points and matures January 30, 2004. The facility is collateralized by the stock of the Bank.The line of credit also includes certain covenants including requirements to maintain defined
levels of tangible net worth, net income and capital. Additionally, the note includes limitations on the Companys leveraging and dividend payments. As of December 31, 2002, management believes the Company is in compliance with stated
covenants.

Additionally, during 2001 the Company entered into a modification agreement of its existing line of credit. The line was increased from $2,500,000
to $3,500,000, of which $2,500,000 was outstanding as of December 31, 2001. Under the agreement, the line accrued interest at prime minus 25 basis points and matured March 31, 2002. The facility was collateralized by the stock of the Bank. This line
was repaid during 2002 with funds provided by the Trust Preferred Securities.

28



---

CCF HOLDING COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements, continued

(8)Notes Payable

In 2002, the Company issued $4,000,000 of Trust Preferred Securities (the Securities) through a wholly owned subsidiary
of the Company, CCF Capital Trust I. The Trust Preferred Securities pay quarterly dividends based on a rate of prime plus 75 basis points. At December 31, 2002, the prime rate was 4.25%. The Securities cannot be redeemed for a period of five years
from the date of issuance and have a final maturity of 30 years from the date of issuance. Dividends are cumulative and deferrable for a period not to exceed five years. The Securities also qualify as Tier I capital, with certain limitations, and
amounts not qualified for Tier I capital are included in Tier II capital.

(9)Preferred Stock

The Company is
authorized to issue 1,000,000 shares of no par value preferred stock. At December 31, 2002 and 2001, there were no shares issued and outstanding. The Board of Directors of the Company is authorized to issue 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 shareholder approval.

(10)Employee Benefit Plans

401(k) Profit Sharing PlanThe Company has a tax-qualified defined contribution profit sharing plan (the Plan) for the benefit of its employees. All
full-time employees become eligible to participate in 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. Company contributions
were $1.00 for each $1.00 of employee contribution up to 5% of the employees compensation. Such matching contributions begin to vest after the first year at a rate of 20% per year with full vesting after five 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 the
years ended December 31, 2002 and 2001 totaled approximately $105,000 and $82,000, respectively.

Employee Stock Ownership PlanThe company also has 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. 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 87,120 shares of Company common stock at approximately $8 per share.

In February 2001, the Company accelerated the principal payments associated with
its internally leveraged ESOP. The Company recorded a one time pretax charge of approximately $389,000 in connection with this transaction. The acceleration of payments to the ESOP did not alter the vesting period of the plan participants.

Stock Option Plan

In January 1996, the Company approved a
stock option plan (the OptionPlan) whereby 205,228 authorized shares of common stock were 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 non-qualified 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 are terminated unexercised will again be available for issuance. The Option Plan has a term of ten years, unless terminated earlier. The exercise price
per share for nonqualified and incentive 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.

29



---

CCF HOLDING COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements, continued

(10)Employee Benefit Plans, continued

In December 2000, the Company approved a stock option plan (the 2000 Option
Plan) whereby 119,250 shares of common stock (either authorized shares or shares purchased in the market) are available to be granted to officers, directors, and employees of the Company from time to time. Options constitute both incentive
stock options and non-qualified stock options. Terms of the 2000 Option Plan are similar to that of the Option Plan with the exception that options granted are immediately vested and that a minimum of six months must elapse between the date of the
grant of an option and the date of the sale of the common stock received through the exercise of the option. At December 31, 2002, there were 78,860 shares available under the Option Plan and the 2000 Option Plan.

Stock option activity is as follows:



|                                           |  | 2002    |       | 2001    |      
|------------------------------------------ |  | ------- | ----- | ------- | -----
|                                           |  |         |       |         |      
|Options outstanding at beginning of period |  | 231,291 |       | 187,116 |      
|Options granted                            |  | 17,175  |       | 44,175  |      
|Options exercised                          |  | (750    | )     |        |      
|Options canceled                           |  | (1,049  | )     |        |      
|                                           |  |         |       |         |      
|                                           |  |         |       |         |      
|Options outstanding at end of period       |  | 246,667 |       | 231,291 |      
|                                           |  |         |       |         |      
|                                           |  |         |       |         |      
|Options exercisable at end of period       |  | 217,508 |       | 132,104 |      
|                                           |  |         |       |         |      
|                                           |  |         |       |         |      
|Weighted-average option prices per share:  |  |         |       |         |      
|Options granted during the period          |  | $       | 17.10 |         | 11.17
|                                           |  |         |       |         |      
|Options canceled during the period         |  | $       | 14.49 |         |     
|                                           |  |         |       |         |      
|Options exercised during the period        |  | $       | 6.67  |         |     
|                                           |  |         |       |         |      
|Options outstanding at end of period       |  | $       | 8.81  |         | 10.13
|                                           |  |         |       |         |      

A summary of options and warrants outstanding as of
December 31, 2002 is presented below:



|OptionsOutstanding |  | Range ofPrice perShare |   | WeightedAveragePricePer Share |  | YearsRemaining |  | OptionsCurrentlyExercisable |  | WeightedAveragePricePer Share | 
|------------------ |  | ---------------------- | - | ----------------------------- |  | -------------- |  | --------------------------- |  | ----------------------------- | 
|                   |  |                        |   |                               |  |                |  |                             |  |                               | 
|185,464            |  | $  6.67                |  | 9.50                          |  | $  7.12        |  | 5                           |  | 168,275                       | 
|29,850             |  | 10.14                  |  | 13.21                         |  | 11.85          |  | 7                           |  | 17,880                        | 
|31,353             |  | 14.49                  |  | 17.10                         |  | 15.92          |  | 10                          |  | 31,353                        | 
|                   |  |                        |   |                               |  |                |  |                             |  |                               | 
|                   |  |                        |   |                               |  |                |  |                             |  |                               | 
|246,667            |  | $  6.67                |  | 17.10                         |  | $  8.81        |  | 6                           |  | 217,508                       | 
|                   |  |                        |   |                               |  |                |  |                             |  |                               | 

Management Stock Bonus PlanIn January 1996, the Company adopted a Management Stock Bonus Plan (the MSBP). Under the terms of the MSBP, a total of 57,608 shares of the Companys common stock is available for the granting awards during a
period of up to ten years. The market value of the common stock at the date of award is included as a reduction of shareholders equity in the consolidated balance sheets and is recorded as compensation expense using the straight-line method
over the vesting period of the awards. The awards vest pro rata over five years at each anniversary of the award. The Company recognized expense associated with the MSBP of $86,034 for the year ended December 31, 2001.

In February 2001, the Company accelerated the principal payments associated with its internally leveraged MSBP Plan of 1995. The Company recorded compensation expense of
approximately $153,000 in connection with this transaction. The acceleration of payments to the MSBP did not alter the vesting period of the plan participants.

30



---

CCF HOLDING COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements, continued

(10)Employee Benefit Plans, continued

Life Insurance
PoliciesThe Company adopted a defined contribution post retirement benefit plan to provide retirement benefits to certain of the Companys executive officers and to provide death benefits for the
designated beneficiaries. Under this plan, single-premium, split-dollar, whole-life insurance contracts were purchased on certain executive officers. The increase in the cash surrender value of the contracts, less the Banks cost of funds,
constitutes the Companys contribution to the plan each year. In the event the insurance contracts fail to produce positive returns, the Company has no obligations to contribute to the plan. For the years ended December 31, 2002 and 2001, the
Company incurred expenses of $95,523 and $25,150, respectively, in connection with this plan.

(11)Commitments

The Company is a party to financial instruments with
off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include standby letters of credit and 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.

Standby letters of credit are conditional commitments issued by the Company guaranteeing the performance of a customer to a third
party. These guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company
holds collateral supporting these commitments, as deemed necessary.

The Companys exposure to credit loss, in the event of nonperformance by the
customer for commitments to extend credit and standby letters of 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.

The following summarizes commitments as of December 31, 2002 and 2001:



|                                                                    |  | ApproximateContract Amount |       
|------------------------------------------------------------------- |  | -------------------------- | ------
|                                                                    |  |                            |       
|                                                                    |  | 2002                       |       
|                                                                    |  |                            |       
|                                                                    |  | (in thousands)             |       
|Financial instruments whose contract amounts represent credit risk: |  |                            |       
|Commitments to extend credit                                        |  | $                          | 23,696
|Standby letters of credit                                           |  | $                          | 950   

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.

The
Company has entered into contracts with certain members of management which stipulate a term and annual base salary. The contracts include provisions to terminate the agreements for just cause which is defined in the contracts. If such
members of management are relieved of their position without just cause, the employee is entitled to a continuation of salary from the termination date through the remaining term of the agreement. Certain of these employment agreements contain a
provision stating that in the event of any change in control of the Company which results in involuntary termination of employment within one year, the officer will be paid a lump sum distribution equal to 2.99 times the individuals base
compensation.

31



---

CCF HOLDING COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements, continued

(12)Fair Values of Financial Instruments

SFAS No. 107, Disclosure 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.

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 cash equivalents

The carrying amounts of cash and cash equivalents approximate fair values.

Investment securities available-for-sale

Fair values for investment securities available-for-sale are based on quoted market prices.

Federal Home Loan Bank stock

The carrying amount is considered a reasonable estimate of fair value.

Loans

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.

Cash surrender value of life insurance policies.

Fair value
for life insurance cash surrender value is based on cash surrender values indicated by the insurance companies.

Deposits

Fair values for fixed-rate time deposits 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.

Securities sold under agreements to
repurchase

Fair value approximates the carrying value of such liabilities due to their short-term nature.

Federal Home Loan Bank advances

The carrying amounts of the Federal Home Loan Bank
advances approximate their fair values as the advances are based on a floating interest rate or represent short term maturities.

Line of credit and notes
payable

Advances on the line of credit and outstanding notes payable bear interest on a floating basis, and as such, the carrying amount approximates fair
value.

Commitments to extend credit, standby letters of credit

Off-balance sheet instruments (commitments to extend credit and standby letters of credit) are generally short-term and at variable interest rates. Therefore, both the carrying value and estimated fair value associated with these instruments
are immaterial.

32



---

CCF HOLDING COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements, continued

(12)Fair Values of Financial Instruments, continued

The carrying amount and estimated fair value
of the Companys financial instruments as of December 31, 2002 and December 31, 2001 are as follows:



|                                                |  | December 31, 2002 |         | December 31, 2001 |        
|----------------------------------------------- |  | ----------------- | ------- | ----------------- | -------
|                                                |  |                   |         |                   |        
|                                                |  | CarryingValue     |         | FairValue         |        
|                                                |  |                   |         |                   |        
|                                                |  | (in thousands)    |        
|Assets:                                         |  |                   |         |                   |        
|Cash and cash equivalents                       |  | $                 | 22,698  |                   | 22,698 
|Investment securities available-for-sale        |  | $                 | 33,570  |                   | 33,570 
|Loans, net                                      |  | $                 | 190,969 |                   | 200,557
|Federal Home Loan Bank stock                    |  | $                 | 750     |                   | 750    
|Cash surrender value of life insurance policies |  | $                 | 4,342   |                   | 4,342  
|                                                |  |                   |         |                   |        
|Liabilities:                                    |  |                   |         |                   |        
|Deposits                                        |  | $                 | 231,787 |                   | 233,313
|Securities sold under agreements to repurchase  |  | $                 | 2,085   |                   | 2,085  
|Federal Home Loan Bank advances                 |  | $                 | 5,000   |                   | 5,000  
|Note payable                                    |  | $                 | 4,000   |                   | 4,000  
|Line of credit                                  |  | $                 |        |                   |       

(13)Related Party Transactions

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. The following is a summary of activity during the year
ended December 31, 2002 with respect to such aggregate loans to these individuals and their associates:



|Related party loan balances at beginning of year |  | $          | 1,236,922 | 
|------------------------------------------------ |  | ---------- | --------- | 
|New loans                                        |  | 1,194,180  |          
|Principal repayments                             |  | (1,361,527 | )        
|                                                 |  |            |          
|Related party loan balances at end of year       |  | $          | 1,069,575 | 
|                                                 |  |            |           | 

Deposits from related parties totaled approximately
$669,000 and $1,174,000, at December 31, 2002 and 2001, respectively.

33



---

CCF HOLDING COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements, continued

(14)Parent Company Financial Information

The following represents condensed financial information
of the holding company:

Condensed Balance Sheets

December 31, 2002
and 2001



|                                     |  | 2002       |            | 2001       |           
|------------------------------------ |  | ---------- | ---------- | ---------- | ----------
|                                     |  |            |            |            |           
|Assets                               |  |            |            |            |           
|Cash                                 |  | $          | 496,374    |            | 180,430   
|Investment in subsidiaries           |  | 20,878,423 |            | 18,134,099 |           
|Other assets                         |  | 572,656    |            | 76,225     |           
|                                     |  |            |            |            |           
|                                     |  | $          | 21,947,453 |            | 18,390,754
|                                     |  |            |            |            |           
|                                     |  |            |            |            |           
|Liabilities and Shareholders Equity |  |            |            |            |           
|                                     |  |            |            |            |           
|Line of credit                       |  | $          |           |            | 2,500,000 
|Notes payable                        |  | 4,000,000  |            |           |           
|Dividends payable                    |  | 73,339     |            |           |           
|Other liabilities                    |  | 133,884    |            | 77,557     |           
|                                     |  |            |            |            |           
|                                     |  |            |            |            |           
|Total liabilities                    |  | 4,207,223  |            | 2,577,557  |           
|                                     |  |            |            |            |           
|Total shareholders equity           |  | 17,740,230 |            | 15,813,197 |           
|                                     |  |            |            |            |           
|                                     |  |            |            |            |           
|                                     |  | $          | 21,947,453 |            | 18,390,754
|                                     |  |            |            |            |           

Condensed Statements of Earnings

For the Years Ended December 31, 2002 and 2001



|                                                                        |  | 2002      |           | 2001      |  
|----------------------------------------------------------------------- |  | --------- | --------- | --------- | -
|                                                                        |  |           |           |           |  
|                                                                        |  |           |           |           |  
|Dividends from subsidiaries                                             |  | $         | 400,000   |           | 
|Interest income from subsidiaries                                       |  |          |           | 7,474     |  
|Interest expense                                                        |  | (205,263  | )         | (163,931  | )
|Other operating expenses                                                |  | (108,930  | )         | (636,931  | )
|Income tax benefit                                                      |  | 109,565   |           | 260,650   |  
|                                                                        |  |           |           |           |  
|                                                                        |  |           |           |           |  
|Earnings (loss) before equity in undistributed earnings of subsidiaries |  | 195,372   |           | (532,785  | )
|                                                                        |  |           |           |           |  
|Equity in undistributed earnings of subsidiaries                        |  | 1,767,318 |           | 1,962,080 |  
|                                                                        |  |           |           |           |  
|                                                                        |  |           |           |           |  
|Net earnings                                                            |  | $         | 1,962,690 |           |  
|                                                                        |  |           |           |           |  

34



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CCF HOLDING COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements, continued

(14)Parent Company Financial
Information, continued

Condensed Statements of Cash Flows

For
the Years Ended December 31, 2002 and 2001

|                                                                                          |  | 2002       |   | 2001       |  
|----------------------------------------------------------------------------------------- |  | ---------- | - | ---------- | -
|                                                                                          |  |            |   |            |  
|Cash flows from operating activities:                                                     |  |            |   |            |  
|Net earnings                                                                              |  | $1,962,690 |   | 1,429,295  |  
|Adjustment to reconcile net earnings to net cash (used) provided by operating
activities: |  |            |   |            |  
|Equity in undistributed earnings of subsidiaries                                          |  | (1,767,318 | ) | (1,962,080 | )
|Compensation expense related to MSBP                                                      |  |           |   | 153,143    |  
|ESOP shares allocated                                                                     |  |           |   | 389,318    |  
|Increase (decrease) in other assets / other liabilities                                   |  | (440,105   | ) | 46,269     |  
|                                                                                          |  |            |   |            |  
|                                                                                          |  |            |   |            |  
|Net cash (used) provided by operating activities                                          |  | (244,733   | ) | 55,945     |  
|                                                                                          |  |            |   |            |  
|                                                                                          |  |            |   |            |  
|Cash flows used by investing activities consisting of capital infusion in
subsidiaries    |  | (900,000   | ) |           |  
|                                                                                          |  |            |   |            |  
|                                                                                          |  |            |   |            |  
|Cash flows from financing activities:                                                     |  |            |   |            |  
|Dividends paid                                                                            |  |           |   | (74,406    | )
|Exercise of stock options                                                                 |  | 4,999      |   |           |  
|Retirement of common stock                                                                |  | (44,322    | ) | (27,702    | )
|Repayment of line of credit                                                               |  | (2,500,000 | ) |           |  
|Proceeds from issuance of trust preferred securities                                      |  | 4,000,000  |   |           |  
|                                                                                          |  |            |   |            |  
|                                                                                          |  |            |   |            |  
|Net cash provided by (used) financing activities                                          |  | 1,460,677  |   | (102,108   | )
|                                                                                          |  |            |   |            |  
|                                                                                          |  |            |   |            |  
|Change in cash and cash equivalents                                                       |  | 315,944    |   | (46,163    | )
|                                                                                          |  |            |   |            |  
|Cash and cash equivalents at beginning of period                                          |  | 180,430    |   | 226,593    |  
|                                                                                          |  |            |   |            |  
|                                                                                          |  |            |   |            |  
|Cash and cash equivalents at end of period                                                |  | $496,374   |   | 180,430    |  
|                                                                                          |  |            |   |            |  

(15)Regulatory Matters

Dividends paid by the Bank are the primary source of funds available to
the Company. Banking regulations limit the amount of dividends that may be paid without prior approval of the regulatory authorities. These restrictions are based on the level of regulatory classified assets, the prior years net earnings, and
the ratio of equity capital to total assets. At December 31, 2002, the Bank could pay approximately $884,000 in dividends without obtaining prior regulatory approval.

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

35



---

CCF HOLDING COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements, continued

(15)Regulatory Matters,
continued

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and
ratios of total and Tier I capital to risk-weighted assets, and of Tier I capital to average assets. Management believes, as of December 31, 2002, that the Company and the Bank meet all capital adequacy requirements to which they are subject.

As of December 31, 2002, the most recent notification from the Federal Deposit Insurance Corporation categorized the Bank as well capitalized under the
regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the table below. There are no conditions or
events since that notification that management believes have changed the Banks capital category.

The actual capital amounts and ratios at December 31,
2002 and 2001, are presented in the table below (in thousands):

|                                                     |  | Actual |        | For CapitalAdequacy Purposes |      | To Be WellCapitalized UnderPrompt
CorrectiveAction Provisions |       
|---------------------------------------------------- |  | ------ | ------ | ---------------------------- | ---- | ------------------------------------------------------------- | ------
|                                                     |  |        |        |                              |      |                                                               |       
|                                                     |  | Amount |        | Ratio                        |      | Amount                                                        |       
|                                                     |  |        |        |                              |      |                                                               |       
|As of December 31, 2002:                             |  |        |        |                              |      |                                                               |       
|Total capital - risk-based(to risk-weighted assets)  |  |        |        |                              |      |                                                               |       
|Bank                                                 |  | $      | 23,083 |                              | 11.3 | %                                                             | 16,323
|Consolidated                                         |  | $      | 23,945 |                              | 11.7 | %                                                             | 16,345
|Tier I capital  risk-based(to risk-weighted
assets) |  |        |        |                              |      |                                                               |       
|Bank                                                 |  | $      | 20,532 |                              | 10.0 | %                                                             | 8,161 
|Consolidated                                         |  | $      | 21,394 |                              | 10.5 | %                                                             | 8,172 
|Tier I capital  leverage(to average assets)         |  |        |        |                              |      |                                                               |       
|Bank                                                 |  | $      | 20,532 |                              | 7.7  | %                                                             | 10,644
|Consolidated                                         |  | $      | 21,394 |                              | 8.4  | %                                                             | 10,173
|As of December 31, 2001:                             |  |        |        |                              |      |                                                               |       
|Total capital - risk-based(to risk-weighted assets)  |  |        |        |                              |      |                                                               |       
|Bank                                                 |  | $      | 19,785 |                              | 10.4 | %                                                             | 15,294
|Consolidated                                         |  | $      | 17,464 |                              | 9.1  | %                                                             | 15,300
|Tier I capital  risk-based(to risk-weighted
assets) |  |        |        |                              |      |                                                               |       
|Bank                                                 |  | $      | 17,636 |                              | 9.2  | %                                                             | 7,647 
|Consolidated                                         |  | $      | 15,315 |                              | 8.0  | %                                                             | 7,650 
|Tier I capital  leverage(to average assets)         |  |        |        |                              |      |                                                               |       
|Bank                                                 |  | $      | 17,636 |                              | 7.2  | %                                                             | 9,784 
|Consolidated                                         |  | $      | 15,315 |                              | 6.3  | %                                                             | 9,691 

36