<PAGE>   1







                                   EXHIBIT 13


<PAGE>   2
                               HABERSHAM BANCORP
                          CONSOLIDATED BALANCE SHEETS
                           December 31, 1995 and 1994

<TABLE>
<CAPTION>
                                                                 1995                     1994    
                                                             ------------             ------------
<S>                                                          <C>                      <C>         
ASSETS

Cash and due from banks                                      $  6,597,807             $  4,450,912
Federal funds sold                                              9,790,000                1,020,000 
Investment securities available                                                                   
  for sale, at market value  (cost of $40,034,650              40,313,309               28,529,679 
ASSETS  in 1995 and $30,065,049 in 1994) (Note 4)                                                       
                                                                                                  
Investment securities held to maturity, at cost                                                   
  (estimated market value of $17,676,919                                                          
  in 1995 and $21,092,769 in 1994) (Note 5)                    17,498,191               21,619,504 
                                                                                                  
Loans (Notes 6 and 14)                                        145,433,896              100,848,483 
  Less: Unearned income                                           (43,731)                 (45,338)
        Allowance for loan losses (Note 6)                     (2,335,788)              (1,744,335)
                                                             ------------             ------------
     Loans, net                                               143,054,377               99,058,810 
                                                             ------------             ------------
Premises and equipment, net (Note 7)                            4,595,040                2,947,889 
Interest receivable                                             2,015,240                1,346,942 
Goodwill and other intangible assets, net of                                                      
  accumulated amortization of                                                                     
  $103,277 in 1995 (Note 3)                                     3,396,564                          
Other assets                                                    2,325,448                2,353,248 
                                                             ------------             ------------
     TOTAL ASSETS                                            $229,585,976             $161,326,984
                                                             ============             ============
                                                                                                  
LIABILITIES                                                                                       
                                                                                                  
Deposits (Note 14)                                                                                
  Demand                                                     $ 23,128,946             $ 17,100,436
  Money market and NOW accounts                                37,183,366               33,653,457 
  Savings                                                       7,901,172                5,504,444 
  Time ($100,000 and over)                                     28,264,502               21,165,754 
  Other time                                                   98,607,343               64,191,404 
                                                             ------------             ------------
     Total Deposits                                           195,085,329              141,615,495 
Short-term borrowings (Note 8)                                  1,596,601                1,001,742 
Federal Home Loan Bank advances  (Note 8)                       3,700,000                1,500,000 
Accrued interest payable                                        2,377,378                1,000,104 
Other liabilities                                                 921,199                  359,056 
                                                             ------------             ------------
     TOTAL LIABILITIES                                        203,680,507              145,476,397 
                                                             ============              ===========

SHAREHOLDERS' EQUITY (Notes 10 and 11)                                                            
                                                                                                  
Common stock, $1.00 par value, authorized 10,000,000 shares                                       
  issued 2,403,974 shares in 1995 and                                                             
  1,750,000 shares in 1994                                      2,403,974                1,750,000 
Additional paid-in capital                                      8,837,624                2,446,028 
Retained earnings                                              14,932,035               13,110,034 
Unrealized gain (loss) on investment securities                                                   
  available for sale                                              207,637               (1,013,344)
Treasury stock, at cost                                          (475,801)                (442,131)
                                                             ------------             ------------
     SHAREHOLDERS' EQUITY - NET                                25,905,469               15,850,587 
                                                             ------------             ------------
     TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY              $229,585,976             $161,326,984
                                                             ============             ============
</TABLE>

See notes to consolidated financial statements.
<PAGE>   3

                               HABERSHAM BANCORP
                       CONSOLIDATED STATEMENTS OF INCOME
              For the years ended December 31, 1995, 1994 and 1993

<TABLE>
<CAPTION>
                                                            1995              1994             1993    
                                                        ------------      ------------      -----------
                                                                                        
<S>                                                     <C>                <C>              <C>              
INTEREST INCOME

Loans                                                    $12,901,162       $ 9,580,514      $10,043,542
Investments:                                                                                           
  U. S. Treasury and Government agencies                   2,044,608         1,531,470        1,031,171 
  States and political subdivisions                                                                    
   (exempt from Federal income tax)                        1,083,349         1,056,133        1,010,857 
  Other investment securities                                174,356           136,920          172,818 
Federal funds sold                                           352,521           129,640           71,705 
                                                        ------------      ------------      -----------
     TOTAL INTEREST INCOME                                16,555,996        12,434,677       12,330,093 
                                                        ------------      ------------      -----------
INTEREST EXPENSE                                                                                       
                                                                                                       
Time deposits, $100,000 and over                           1,272,056           947,826        1,027,779 
Other deposits                                             5,839,910         3,750,020        3,591,770 
Short-term and other borrowings                              286,507           103,086           58,058 
                                                        ------------      ------------      -----------
     TOTAL INTEREST EXPENSE                                7,398,473         4,800,932        4,677,607 
                                                        ------------      ------------      -----------
NET INTEREST INCOME                                        9,157,523         7,633,745        7,652,486 
Provision for loan losses (Note 6)                            98,043           208,096          249,765 
                                                        ------------      ------------      -----------
NET INTEREST INCOME AFTER PROVISION                                                                    
   FOR LOAN LOSSES                                         9,059,480         7,425,649        7,402,721 
                                                        ------------      ------------      -----------
NON-INTEREST INCOME                                                                                    
                                                                                                       
Service charges on deposit accounts                          536,891           430,211          426,088 
Other service charges and commissions                        207,287           232,887          224,532 
Securities gains, net                                         76,842            25,128                  
Other income                                                 550,269           518,889          267,207 
                                                        ------------      ------------      -----------
     TOTAL NON-INTEREST INCOME                             1,371,289         1,207,115          917,827 
                                                        ------------      ------------      -----------
NON-INTEREST EXPENSE                                                                                   
                                                                                                       
Salaries and employee benefits (Note 11)                   3,781,345         3,152,261        3,053,726 
Occupancy expenses                                           513,616           460,268          447,818 
Furniture and equipment expenses                             452,933           447,983          466,997 
Data processing                                              217,626           179,421          226,285 
Other operating expenses (Note 12)                         2,864,847         2,379,972        2,135,118 
                                                        ------------      ------------      -----------
     TOTAL NON-INTEREST EXPENSE                            7,830,367         6,619,905        6,329,944 
                                                        ------------      ------------      -----------
INCOME BEFORE INCOME TAXES AND CUMULATIVE                                                              
  EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE                 2,600,402         2,012,859        1,990,604 
Provision for income taxes (Note 9)                          579,390           354,474          345,886 
INCOME BEFORE CUMULATIVE EFFECT OF                      ------------      ------------      -----------
 CHANGE IN ACCOUNTING PRINCIPLE                            2,021,012         1,658,385        1,644,718 
                                                                                                       
Cumulative effect of change in                                                                         
 accounting principle (Note 9)                                                                  (87,000)
                                                        ------------      ------------      -----------
NET INCOME                                               $ 2,021,012       $ 1,658,385      $ 1,557,718
                                                        ============      ============      ===========

PER COMMON AND COMMON EQUIVALENT SHRARE:                                                               
 Income before cumulative effect of                                                                    
   change in accounting principle                        $       .99       $       .98      $       .98 
 Cumulative effect of change in accounting                                                             
   principle (Note 9)                                                                             (0.05)
                                                        ------------      ------------      -----------
 NET INCOME PER SHARE (Note 10)                          $       .99       $       .98      $       .93 
                                                        ------------      ------------      -----------
WEIGHTED AVERAGE NUMBER OF COMMON AND                                                                  
COMMON EQUIVALENT SHARES OUTSTANDING (Note 10)             2,032,567         1,689,795        1,672,065 
                                                        ============      ============      ===========
</TABLE>

See notes to consolidated financial statements.

<PAGE>   4

                               HABERSHAM BANCORP
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the years ended December 31, 1995, 1994 and 1993
<TABLE>
<CAPTION>
                                                                           1995           1994          1993
                                                                      ------------- -------------- -------------
<S>                                                                   <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                            $ 2,021,012    $ 1,658,385    $ 1,557,718
  Adjustments to reconcile net income to net
    cash provided by operating activities:
       Provision for loan losses                                           98,043        208,096        249,765
       Provision for other real estate                                    217,000        120,000         19,988
       Depreciation                                                       497,804        509,334        540,635
      Amortization of intangible assets                                   108,251
       Cumulative effect of change in
          accounting principle                                                                           87,000
       Loss on sale of premises and equipment                                              1,040
       Gain on sale of securities                                         (76,842)       (25,128)
       Gain on sale of other real estate                                                (103,830)
       Changes in assets and liabilities net of effects
        of purchase of Security Bancorp, Inc.
         (Increase) decrease in interest receivable                      (668,298)       (10,368)        66,226
         (Increase) decrease in other assets                               31,592       (182,201)        46,355
         Increase (decrease) in interest payable                        1,377,276         49,054       (206,707)
         Increase (decrease) in other liabilities                        (474,021)       218,545       (111,820)
                                                                      -----------    -----------    -----------
  Net cash provided by operating activities                             3,131,817      2,442,927      2,249,160 
                                                                      -----------    -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Investment securities available for sale
       Proceeds from maturity                                           4,396,036      6,440,949      9,299,503
       Proceeds from sales                                              7,263,903      4,212,461
       Purchases                                                      (10,894,483)   (17,232,821)   (18,394,548)
  Investment securities held to maturity                                               
       Proceeds from maturity                                           4,524,864      2,522,864
       Purchases                                                       (5,381,720)    (5,981,582)
  Net decrease (increase) in loans                                    (12,372,090)     3,045,041      1,214,619
  Purchases of premises and equipment                                    (248,155)      (143,525)      (430,546)
  Proceeds from sale of premises and equipment                                            47,767
  Proceeds from sale of other real estate                                 226,269        163,633        228,449
  Cash and cash equivalents acquired upon acquisition
   of Security Bancorp, Inc., net of cash payments                      3,219,000                             
                                                                      -----------    -----------    -----------
  Net cash used in investing activities                                (9,266,376)    (6,925,213)    (8,082,523)
                                                                      -----------    -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net increase in deposits                                             14,197,882      3,156,495      4,008,441       
  Net increase (decrease) in short-term borrowings                        594,859       (257,682)       190,875       
  Proceeds from Federal Home Loan Bank advances, net                    2,200,000     (1,000,000)     2,500,000       
  Proceeds from sale of treasury stock                                    257,724        117,484         86,047       
  Cash dividends                                                         (199,011)      (133,060)      (132,520)      
                                                                      -----------    -----------    -----------   
                                                                                                  
  Net cash provided by financing activities                            17,051,454      1,883,237      6,652,843        
                                                                      -----------    -----------    -----------      
Increase (decrease) in cash and cash equivalents                       10,916,895     (2,599,049)       819,480        
                                                                                                                    
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                          5,470,912      8,069,961      7,250,481        
                                                                      -----------    -----------    -----------      
CASH AND CASH EQUIVALENTS AT END OF YEAR                              $16,387,807    $ 5,470,912    $ 8,069,961  
                                                                      ===========    ===========    ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid during the year for:
    Interest                                                          $ 6,208,061    $ 4,659,814    $ 4,884,605
    Income taxes                                                          634,000        367,089        343,697

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITY:
  Other real estate acquired through loan
    foreclosures                                                      $   280,277    $   290,495
  Loans granted to facilitate the sale of
    other real estate                                                      16,000        125,204    $   600,100
  Unrealized gain (loss) on investment
    securities available for sale, net of tax effect                    1,220,981     (1,338,528)       325,184

</TABLE>

See notes to consolidated financial statements.



<PAGE>   5
<TABLE>
<CAPTION>
HABERSHAM BANCORP
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
For the years ended December 31, 1995, 1994 and 1993

                                                                                                           UNREALIZED
                                                                                                           GAIN (LOSS)
                                                                                                          ON INVESTMENT
                                                                                ADDITIONAL                  SECURITIES 
                                                                      COMMON     PAID IN      RETAINED      AVAILABLE    TREASURY
                                                                       STOCK     CAPITAL      EARNINGS       FOR SALE     STOCK
<S>                                                                 <C>         <C>          <C>           <C>          <C>
Balance at December 31, 1992                                        $1,750,000  $2,425,000   $10,159,511                $(624,634)
Net income                                                                                     1,557,718
Cash dividends, $.08 per share                                                                  (132,520)
Sale of 11,650 shares of Treasury Stock                                                                                    86,047
Unrealized gain on investment securities available for sale                                                    325,184            
                                                                    ----------  ----------   -----------   -----------  ---------
Balance at December 31, 1993                                         1,750,000   2,425,000    11,584,709       325,184   (538,587)
Net income                                                                                     1,658,385
Cash dividends, $.08 per share                                                                  (133,060)
Sale of 16,740 shares of Treasury Stock                                             21,028                                        
Unrealized loss on investment
  securities available for sale                                                                             (1,338,528)           
                                                                    ----------  ----------   -----------   -----------  ---------
Balance at December 31, 1994                                         1,750,000   2,446,028    13,110,034    (1,013,344)  (442,131)
Net income                                                                                     2,021,012
Cash dividends, $.10 per share                                                                  (199,011)
Sale of 38,000 shares of Treasury Stock                                             28,904                                228,820 
Acquisition of Security Bancorp, Inc.
  including 41,447 share of Treasury Stock (Note 3)                    653,974   6,362,692                               (262,490)
Unrealized gain on investment
  securities available for sale                                                                              1,220,981              
                                                                    ----------  ----------   -----------   -----------  ---------  
Balance at December 31, 1995                                        $2,403,974  $8,837,624   $14,932,035   $   207,637  $(475,801)
                                                                    ==========  ==========   ===========   ===========  =========
</TABLE>




See notes to consolidated financial statements.





<PAGE>   6




                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              For the years ended December 31, 1995, 1994 and 1993


1.  ORGANIZATION AND BASIS OF PRESENTATION

The consolidated financial statements of Habersham Bancorp (the "Company")
include the financial statements of Habersham Bank ("Habersham Bank"), 
Security State Bank ("Security Bank") (collectively the "Banks") and The
Advantage Group, Inc. which are wholly-owned subsidiaries of the Company.  All
intercompany transactions have been eliminated.

The Company operates two banks in rural and suburban communities in Habersham
and Cherokee counties in Georgia.  The Company's primary source of revenue is
providing loans to businesses and  individuals in their market area.

Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. 
Actual results could differ from those estimates.

New Legislation
On January 25, 1996, the State of Georgia Legislature passed legislation
allowing banks to establish three branches during the period July 1, 1996 to
June 30, 1998 in counties in Georgia in which a bank presently does not have a
branch.  If a bank is part of a bank holding company, all holding company bank
affiliates will be treated as one, and the holding company group will be
limited to opening three de novo branches in three new counties.  Effective
July 1, 1998 the legislation would allow a bank to branch anywhere in Georgia,
subject to regulatory approval. The bill must be signed by the Governor of
Georgia before the legislation will become effective.  The legislation is not
expected to have an adverse effect on the results of operations of the Company.

Interest Rate Risk
The Company's assets and liabilities are generally monetary in nature and
interest rates have an impact on the Company's performance.  The Company
decreases the effect of interest rates on its performance by striving to match
maturities and interest sensitivity between loans, investment securities,
deposits and other borrowings.  However, a significant change in interest rates
could have an effect on the Company's results of operations.
<PAGE>   7



2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting and reporting policies of the Company conform with generally
accepted accounting principles and with general practice within the banking
industry.  The following is a summary of the more significant accounting
policies:

Cash and Cash Equivalents
For purposes of the Statements of Cash Flows, cash and cash equivalents include
cash on hand, amounts due from banks and federal funds sold.

Investment Securities Available for Sale
At December 31, 1993, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and
Equity Securities."  Accordingly, the Company classified certain  investments
as available for sale. In December 1995, in accordance with the "Guide to the
Implementation of SFAS No. 115, the Company reclassified certain held to
maturity investments with an unamortized cost of $5,569,161 and a market value
of $5,848,273 to available for sale.  The reclassification resulted in an
unrealized gain of approximately $279,112.

Investment securities available for sale are carried at  market value. The
related unrealized gain (loss), net of tax, is included as a separate component
of shareholders' equity. Gains and losses from dispositions are based on the
net proceeds and the adjusted carrying amounts of the securities sold, using
the specific identification method.

Investment Securities Held to Maturity
Investment securities held to maturity are stated at cost, adjusted for
amortization of premiums and accretion of discounts which are recognized as
adjustments to interest income based on the interest method. The Company has
the intent and ability to hold these investment securities to maturity.

Allowance for Loan Losses
The allowance for loan losses is maintained at a level estimated to be adequate
to provide for potential losses in the loan portfolio. Management estimates the
adequacy of the allowance based upon reviews of individual loans, recent loss
experience, current economic conditions, the risk characteristics of the
various categories of loans and other pertinent factors.  Loans deemed
uncollectible are charged to the allowance.  Provisions for loan losses and
recoveries on loans previously charged off are added to the allowance.

<PAGE>   8


Other Real Estate Owned
Other real estate owned includes real estate acquired through foreclosure. 
Other real estate owned is carried at the lower of its recorded amount at date
of foreclosure or estimated fair value less costs to sell.  Any expense
incurred in connection with holding such real estate or resulting from any
writedowns subsequent to foreclosure is included in other non-interest expense.

Premises and Equipment
Premises and equipment are stated at cost less accumulated depreciation. 
Depreciation is computed using primarily the straight-line method over the
estimated useful lives of the assets.

Goodwill and Other Intangibles
Goodwill represents the excess of acquisition costs over the fair value of net
assets of businesses acquired and is amortized on a straight- line basis over
25 years.  Other intangibles consist of an amount assigned to core deposits
representing the difference between fair value at date of acquisition and
recorded amounts which is amortized on a straight-line basis over 5 years. 
Carrying values of goodwill and the other intangibles are periodically reviewed
to assess recoverability based on expectation of undiscounted cash flows and
operating income for the related business unit.  Impairments would be
recognized in operating results if a permanent diminution in value was
expected.  The Company also evaluates the amortization periods of intangible
assets to determine whether events or circumstances warrant revised estimates
of useful lives.  The Company believes that no material impairment of goodwill
or other intangibles exists at December 31, 1995.

Interest Income on Loans
Interest on loans is generally recorded over the term of the loan based on the
unpaid principal balance.  Accrual of interest is discontinued when either
principal or interest becomes 90 days past due, or when in management's
opinion, collectibility of such interest is doubtful.

Loan Origination Fees and Costs
Loan origination fees and certain direct origination costs are capitalized and
recognized as an adjustment of the yield on the related loan based on the
interest method.

Loan Sales
When loans are sold, the recorded investment in the loans is allocated between
the portion of the loans sold and the portion retained based on the relative
fair values.  The difference between the fair value and the allocated cost
portion of the loan sold is recorded as a gain or loss. The difference between
the recorded amount and fair value of the portion of the loan retained is
recorded as a premium  and amortized to interest income, using a method which
approximates the interest method, over the expected lives of the loans.


<PAGE>   9

Income Taxes
Provisions for income taxes are based upon amounts reported in the statements
of income (after exclusion of non-taxable income such as interest on state and
municipal securities) and include deferred taxes on temporary differences
between financial statement and tax bases of assets and liabilities using
enacted tax rates in effect for the year in which the differences are expected
to reverse.

Earnings Per Share
Earnings per share are computed based on the weighted average number of common
and common equivalent shares outstanding during the year.

Reclassifications
Certain reclassifications have been made to the 1994 and 1993 financial
statements to conform to the 1995 presentation.

New Accounting Pronouncements

In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121,  "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" ("SFAS 121").
SFAS 121 addresses issues surrounding the measurement and recognition of losses
when the value of certain assets has been deemed to be permanently impaired. 
The Company plans to adopt SFAS 121 in 1996 and believes that there will be no
material effect on its financial position or results of operations from
adopting SFAS 121.

In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123, "Accounting for Stock Based
Compensation" ("SFAS 123").  SFAS 123 establishes a method of accounting for
stock compensation plans based on the fair value of employee stock options and
similar equity instruments.  Adoption of a fair value method of accounting is
not required and the Company plans to continue accounting for stock based
compensation using the Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees" method which is based on the intrinsic value of
equity instruments.  In this case SFAS 123 requires disclosure of pro forma net
income and earnings per share as if a fair value method included in SFAS 123
had been used to measure compensation cost and the Company will provide this
information beginning in 1996.





<PAGE>   10



3.  ACQUISITION

Effective June 30, 1995, the Company consummated its acquisition of Security
Bancorp, Inc. ("Security") by agreeing to exchange 612,516 shares of its common
stock and cash of $1,990,269 for the outstanding shares of Security's common
stock in a merger of Security with and into the Company.  The Company had
previously acquired 5% of the outstanding shares of Security.  The total
purchase price, including expenses, is expected to total approximately
$9,257,000. The fair value of the assets acquired totaled $49,468,281 and
liabilities assumed totaled $40,211,187.   The merger was accounted for as a
purchase and the operations of Security were included  in the Company's
operations after June 30, 1995.  Intangible assets  consisting of a premium on
core deposits of $416,000 and goodwill of $3,084,000 were recorded in
connection with the merger and are being amortized over a five and twenty-five
year period, respectively.  The following represents pro forma income statement
information for the years ended December 31, 1995 and 1994 assuming the  merger
occurred on January 1, 1995 and 1994, respectively, (in thousands, except per
share amounts):


<TABLE>
<CAPTION>
                                            Twelve Months Ended
                                                December 31,
                                            -------------------
                                               1995     1994
                                            --------  ---------
     <S>                                     <C>      <C>
     Total revenues                          $20,074  $17,439
     Net income                                2,089    1,838
     Net income per common share                 .89      .80
</TABLE>

The pro forma financial information presented above does not purport to be
indicative of either the results of operations that would have occurred had the
acquisition taken place on the indicated dates or of future consolidated
results of operations.


<PAGE>   11


4.  INVESTMENT SECURITIES AVAILABLE FOR SALE

Amortized cost, estimated market values and gross unrealized gains and losses
of investment securities available for sale are as follows:


<TABLE>
<CAPTION>
                                                                Estimated
                             Amortized    Gross   Unrealized     Market
                                Cost      Gains     Losses       Value
     <S>                   <C>          <C>      <C>          <C>
     December 31, 1995:
     U.S. Treasuries ..... $ 3,799,645  $ 18,758 $    6,824   $ 3,811,579
     U.S. Government
     agencies ............  26,892,449   186,712 $  336,809    26,742,352
     States and political
     subdivisions ........   8,592,556   468,980      2,119     9,059,417
     Other Investments ...     750,000               50,039       699,961
                           -----------   -------  ---------    ---------- 
     Total ............... $40,034,650  $674,450 $  395,791   $40,313,309
                           ===========  ======== ==========   ===========

     December 31, 1994:
     U.S. Treasuries ..... $ 5,833,003           $  161,323   $ 5,671,680
     U.S. Government
     agencies ............  18,399,626  $     47  1,378,571    17,021,102
     States and political
     subdivisions ........   5,082,420   124,952     15,203     5,192,169
     Other Investments ...     750,000              105,272       644,728
                           -----------  -------- ----------   -----------
     Total ............... $30,065,049  $124,999 $1,660,369   $28,529,679
                           ===========  ======== ==========   ===========
</TABLE>


During 1995 and 1994, there were realized gains of $114,153 and $37,664 and
realized losses of $37,311 and $12,536, respectively, from sales of securities.
During 1993, there were no sales of securities.

The amortized cost and estimated market values of securities available for sale
at December 31, 1995, by contractual maturity, are shown as follows. Expected
maturities will differ from contractual maturities because borrowers may have
the right to call or prepay obligations with or without call or prepayment
penalties. Callable securities and mortgage-backed securities are included in
the year of their final original maturity. Equity investments are included in
the due after ten years category.

<PAGE>   12
<TABLE>
<CAPTION>
                                                              Estimated
                                             Amortized Cost  Market Value
     <S>                                      <C>           <C>
     Due in one year or less................. $ 5,885,748   $ 5,893,310
     Due after one year through five years...  20,085,677    20,173,616
     Due after five years through ten years..   5,158,591     5,281,237
     Due after ten years.....................   8,904,634     8,965,146

     Total................................... $40,034,650   $40,313,309
</TABLE>


Securities available for sale with a market value of approximately $13,347,675
were pledged as collateral at December 31, 1995 for public deposits and other
deposits, as required by law.

5.  INVESTMENT SECURITIES HELD TO MATURITY

Amortized cost, estimated market values and gross unrealized gains and losses
of investment securities held to maturity are as follows:


<TABLE>
<CAPTION>

                               Amortized    Gross    Unrealized    Market
                                 Cost       Gains      Losses      Value
     <S>                       <C>          <C>       <C>       <C>
     December 31, 1995:

     Treasuries.............. $   199,634  $    398             $   200,032
     U.S. Government
     agencies................   3,407,647    26,438   $ 36,477    3,397,608
     States and political
     subdivisions............  12,545,318   215,852     27,483   12,733,687
     Other investments.......   1,345,592                         1,345,592
                              -----------  --------   --------  -----------
     Total................... $17,498,191  $242,688   $ 63,960  $17,676,919
                              ===========  ========   ========  ===========



     December 31,1994:

     U.S. Treasuries......... $   198,698             $  3,760  $   194,938
     U.S. Government
     agencies................   5,724,080  $  8,215    344,909    5,387,386
     States and political                           
     subdivisions............  13,176,349   158,482    344,763   12,990,068
     Other investments.......   2,520,377                         2,520,377
                              -----------  --------   --------  -----------
     Total................... $21,619,504  $166,697   $693,432  $21,092,769
                              ===========  ========   ========  ===========
</TABLE>


The amortized cost and estimated market values of securities held to maturity
at December 31, 1995, by contractual maturity, are shown below.  Expected
maturities will differ from contractual maturities because borrowers may have
the right to call or prepay obligations with or without call or prepayment
penalties.  Callable securities and mortgage-backed securities are included in
the year of their final original maturity.  Equity investments are included in
the due after ten years category.

<PAGE>   13


<TABLE>
<CAPTION>
                                                              Estimated
                                             Amortized Cost  Market Value

     <S>                                      <C>           <C>
     Due in one year or less................. $ 2,405,305   $ 2,415,967
     Due after one year through five years...   9,057,292     9,152,110
     Due after five years through ten years..   4,707,066     4,759,530
     Due after ten years.....................   1,328,528     1,349,312
                                              -----------   -----------
     Total................................... $17,498,191   $17,676,919
                                              ===========   ===========
</TABLE>


Securities held to maturity with market value of approximately $6,776,678 were
pledged as collateral at December 31, 1995 for public deposits and other
deposits, as required by law.

6.   LOANS

At December 31, 1995 and 1994, loans are summarized as follows:

<TABLE>
<CAPTION>


                                                   1995          1994
     <S>                                      <C>           <C>
     Real Estate:
     Construction.........................    $ 16,512,884  $  5,564,753
      Other...............................      96,361,817    68,992,708
      Commercial..........................      17,579,029    13,170,219
     Installment..........................      14,613,500    12,637,913
     Other................................         366,666       482,890
                                              ------------  ------------
        Total.............................    $145,433,896  $100,848,483
                                              ============  ============
</TABLE>

Changes in the allowance for loan losses are as follows:


<TABLE>
<CAPTION>
                                         1995        1994        1993
     <S>                              <C>         <C>         <C>
     Balance, January 1.............. $1,744,335  $1,601,902  $1,703,592
     Acquired in acquisition ........    628,371
     Provision for loan losses.......     98,043     208,096     249,765
     Loans charged off...............   (175,834)   (125,144)  (376,427)
     Recoveries......................     40,873      59,481      24,972
                                      ----------  ----------  ----------
     Balance, December 31............ $2,335,788  $1,744,335  $1,601,902
                                      ==========  ==========  ==========
</TABLE>

The Company adopted Statements of Financial Accounting Standards Nos. 114 & 118
(the "Statements") as of January 1, 1995.  The Company considers a loan to be
impaired when it is probable that it will be unable to collect all amounts due
according to the terms of the loan agreement.  The Company measures impairment
of a loan on a loan by loan basis for real estate, commercial and agricultural
loans.  Installment and other consumer loans are considered smaller balance,
homogeneous loans.  Amounts of impaired loans that are not probable of
collection are charged off immediately.  The Company had impaired loans
of  



<PAGE>   14

$568,822 and $1,022,683 as of January 1, 1995 and December 31, 1995,
respectively, which included all of its nonaccrual loans. The average amount of
impaired loans during 1995 and 1994 was $1,015,818 and $992,621, respectively. 
No allowance was necessary for such loans under the provision of such
Statements.  The interest income recognized on such loans was $57,416 in 1995
and $ 132,884 in 1994, which approximated the amount of interest received on
the cash basis.

Restructured loans not considered impaired totaled $1,227,411 at December 31,
1995 and $1,318,790 at December 31, 1994.  Interest income that would have been
recorded on such restructured loans in accordance with their original terms
totaled $111,796 in 1995 and $87,073 in 1994, compared with amounts recognized
of $106,599 in 1995 and $81,816 in 1994.

The Company is a party to financial instruments with off-balance-sheet risk in
the normal course of its lending activities to meet the financing needs of its
customers.  These financial instruments include commitments to extend credit
and standby letters of credit.  The Company's exposure to credit loss in the
event of non-performance by the other party to the financial instrument for
commitments to extend credit and standby letters of credit is represented by
the contractual amount of those instruments.  The Company uses the same credit
policies in making these commitments as it does for on-balance-sheet
instruments and evaluates each customer's creditworthiness on a case-by-case
basis. At December 31, 1995 and 1994, the Company had outstanding loan
commitments of $27,619,000 and $10,614,313, respectively, and standby letters
of credit of $1,145,000 and $4,580,341, respectively. The amount of collateral
obtained, if deemed necessary, for these financial instruments by the Company,
upon extension of credit, is based on management's credit evaluation of the
customer.  Collateral held, if any, varies but may include inventory,
equipment, real estate, or other property.  As of December 31, 1995 and 1994,
Habersham Bank's loans to customers for agribusiness purposes in the poultry
industry were approximately $24 million and $22 million, respectively.  As of
December 31, 1995, Security State Bank's loans for residential construction
purposes totaled approximately $15.5 million. The accounting loss the Company
would incur if any party to the financial instrument failed completely to
perform according to the terms of the contract and the collateral, if any,
proved to be of no value is equal to the face amount of the financial
instrument.




<PAGE>   15




7.   PREMISES AND EQUIPMENT

     Premises and equipment are summarized as follows:


<TABLE>
<CAPTION>

                                        1995          1994

     <S>                             <C>           <C>
     Land..........................  $  496,655    $  233,750
     Buildings.....................   4,371,077     2,956,097
     Furniture and equipment.......   3,657,486     2,799,730
                                     ----------    ----------
       Total.......................   8,525,218     5,989,577
     Less accumulated depreciation    3,930,178     3,041,688
                                     ----------    ----------
     Premises and equipment, net...  $4,595,040    $2,947,889
                                     ==========    ==========

</TABLE>


The Company has entered into lease agreements for equipment through 2000.
Approximate minimum rentals under noncancellable operating leases are as
follows:


<TABLE>
Caption>
                            <S>          <C>
                            1996         94,545
                            1997         72,839
                            1998         18,730
                            1999          4,359
                            2000          1,090
</TABLE>



Rental expense was approximately $41,389 in 1995, $38,050 in 1994 and $34,821
in 1993.

8.   SHORT-TERM AND OTHER BORROWINGS

Short-term borrowings of $1,596,601 and $1,001,742 at December 31, 1995 and
1994, respectively, consist of customers' deposits of withholding taxes held
for the U. S. Treasury on a note option basis and bear interest at 1/4 of 1%
less than the federal funds rate.

Federal Home Loan Bank advances include a $1,500,000 advance with an adjustable
rate using three months LIBOR minus eleven basis points with a maturity date of
July 15, 1996 received in 1994 and a $2,200,000 advance with an adjustable rate
using three months LIBOR plus eight basis points with a maturity date of
January 24, 1997 received in 1995.

The average interest rates for such advances during 1995 and 1994 were 5.84%
and 4.13%, respectively.


<PAGE>   16



9.   INCOME TAXES

Effective January 1, 1993, the Company adopted SFAS No. 109, "Accounting for
Income Taxes."  Previously, the Company had accounted for its income tax
expense in accordance with Accounting Principles Board Opinion No. 11.  SFAS
No. 109 requires the Company to provide deferred income taxes based on
temporary differences between financial statement and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
temporary differences are expected to reverse. The cumulative effect of the
adoption of this pronouncement on the Company's financial statements was to
decrease net income by $87,000 ($.26 per share) for the year ended December 31,
1993.


The provision for income taxes for the years ended December 31, 1995, 1994 and
1993 are as follows:


<TABLE>
<CAPTION>
                                     1995       1994        1993
     <S>                           <C>        <C>         <C>
     Current....................   $738,053   $445,818    $302,036
     Deferred...................   (158,663)   (91,344)     43,850
       Total....................   $579,390   $354,474    $345,886
</TABLE>

At December 31, 1995 and 1994  the significant components of the Company's net
deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>

Deferred Tax Assets:                        1995        1994
<S>                                       <C>       <C>
     Unrealized loss on investment
       securities available for sale                $  522,000
     Allowance for possible loan losses   $591,499     424,000
     Allowance for other real estate        74,800
     Deferred Loan Fees                    110,769      57,000
     Other                                  38,772      28,000
                                          --------  ----------
                                           815,840   1,031,000
                                          --------  ----------
Deferred Tax Liabilities:
     Unrealized gain on investment
       securities available for sale       (97,510)
     Accumulated Depreciation             (106,085)    (52,000)
     Other                                 (25,652)    (41,000)
                                          --------  ----------
                                          (229,247)    (93,000)
                                          --------  ----------
Net Deferred Tax Asset Before
     Valuation Allowance                   586,593     938,000
Valuation Allowance                             00          00
                                          --------  ----------
Net Deferred Tax Asset                    $586,593  $  938,000
                                          ========  ==========
</TABLE>


<PAGE>   17
The provision for income taxes is less than that computed by applying the
federal statutory rate of 34% to income before income taxes as indicated by the
following:                              


<TABLE>
<CAPTION>
                                        1995        1994        1993
<S>                                   <C>         <C>          <C>
     Income tax at statutory rate...  $884,137    $684,372     $676,805
     Effect of tax exempt income....  (336,991)   (317,126)    (300,195)
     Amortization of intangibles ...    35,114
     Other..........................    (2,870)    (12,772)     (30,724)
                                      --------    --------     --------
     Provision for income taxes.....  $579,390    $354,474     $345,886
                                      ========    ========     ========
</TABLE>

10.  SHAREHOLDERS' EQUITY

Effective May 15, 1995, the Company declared a 5 for 1 stock split of its
common stock effected in the form of a 400% stock dividend.  In addition,
effective April 15, 1995, the Company changed the par value of its common stock
from $2.50 to $1.00 per share and increased the number of authorized shares of
common stock to 10,000,000 shares.  All references to share and per share
amounts have been retroactively adjusted to reflect the split.  Also
retroactively, $875,000 has been charged to Additional Paid-in Capital and
credited to Common Stock to reflect the stock split and the change in par
value.

The approval of the Georgia Department of Banking and Finance is required if
dividends declared by the Banks to the Company in any year will exceed 50% of
the net income of the Banks for the previous calendar year.  As of December 31,
1995, the Banks could declare dividends to the Company up to approximately
$1,189,000 without regulatory approval.  The Banks are also required to
maintain minimum ratios of capital to total "risk weighted" assets, as defined
by the banking regulators.  At December 31, 1995, the Banks are required to
have minimum Tier 1 and Total Capital ratios of 4% and 8%, respectively. 
Additionally, the Banks are required to maintain a leverage ratio (Tier I
Capital to total assets) of at least 4%.  The Banks' ratios at that date
follow:

<TABLE>
<CAPTION>
                   Habersham Bank    Security State Bank
                   --------------    -------------------
     <S>               <C>               <C>
     Tier I            11.91%            15.14%
     Total Capital     13.16%            16.39%
     Leverage           9.23%            11.58%
</TABLE>

At December 31, 1995 and 1994, the Company held 80,192 shares and 76,745
shares, respectively, of treasury stock.


<PAGE>   18




11.  EMPLOYEE BENEFIT AND STOCK OPTION PLANS

The Company has a contributory profit sharing plan under Internal Revenue Code
Section 401(k) (the "401k Plan").  The 401k Plan covers substantially all
employees. Employees may contribute up to 15% of their annual salaries up to
the amount allowed by the IRS.  The Company will contribute amounts as
specified in the plan agreement.  The Company's contribution to the plan
totaled $88,652 in 1995, $67,938 in 1994 and $70,925 in 1993.

The Company's Incentive Stock Option Plan provides that officers and certain
employees of the Company and its subsidiaries may be granted options to
purchase shares of common stock of the Company at an amount equal to the fair
market value of the stock at the date of grant.  The options, which may be
exercised immediately, expire five years from the date of grant.  The Plan
limits the total number of shares which may be purchased under the Plan to
350,000, which have been reserved for the Plan.  Stock option activity is
summarized as follows:


<TABLE>
<CAPTION>
                                             Number of     Option Price
                                              Options        per Share
                                             ---------     ------------
     <S>                                      <C>        <C>
     Balance outstanding, December 31, 1992   128,000    $ 6.25 to $ 8.33
     Granted                                   40,000      9.19
                                              -------   
     Balance outstanding, December 31, 1993   168,000      6.25 to   9.19
     Granted                                   12,000     10.08
     Exercised                                (10,000)     6.25
                                              -------  
     Balance outstanding, December 31, 1994   170,000      6.74 to  10.08
     Options converted in the acquisition       5,528     10.63
     Granted                                   50,000     13.50
     Exercised                                (38,000)     6.74 to   7.47
     Expired                                   (2,000)     6.74
                                              -------
     Balance outstanding, December 31, 1995   185,528      6.79 to  13.50
                                              =======           

</TABLE>
                                        

At December 31, 1995, there were options for 185,528 shares exercisable and
350,000 shares of common stock reserved for options under the plan.

Effective January 21, 1995, the Company's Board of Directors adopted  an
Outside Directors Stock Option Plan.  The plan initially granted as of
January 21, 1995, the option to purchase 25,000 shares of common stock to
outside directors who were Company Board members on April 16, 1994 at an amount
approximately equal to the fair market value of the stock at that date.  The
options are fully vested on the date of grant and exercisable six months from
the date of grant.


<PAGE>   19

<TABLE>
<CAPTION>
                                             Number of         Option Price
                                              Options            per Share
                                             ---------         ------------
<S>                                           <C>          <C>
     Granted, January 21, 1995                25,000       $  9.19
     Options converted in the acquisition     44,226         10.63
     Granted                                  15,000         13.50
                                              ------
     Balance outstanding, December 31, 1995   84,226          9.19 to  13.50
                                              ======

</TABLE>

At December 31, 1995, all options are exercisable and 350,000 shares of common
stock are reserved for options under the plan.

12.  OTHER OPERATING EXPENSES

Items comprising other operating expenses for the years ended December 31,
1995, 1994 and 1993 are as follows:


<TABLE>
<CAPTION>
                                           1995        1994        1993

     <S>                               <C>         <C>         <C>
     Outside services................. $  612,838  $  714,538  $  627,931
     Advertising and public relations.    621,524     489,952     471,758
     Office supplies..................    349,775     287,565     286,524
     Other............................  1,280,710     887,917     748,905
                                       ----------  ----------  ----------
       Total.......................... $2,864,847  $2,379,972  $2,135,118
                                       ==========  ==========  ==========

</TABLE>

Outside services include charges for FDIC insurance, legal and professional
services, insurance, director fees and State of Georgia Department of Banking
fees.

14.  FAIR VALUE OF FINANCIAL INSTRUMENTS

The following disclosure of the estimated fair value of financial instruments
is made in accordance with the requirements of SFAS No. 107, "Disclosures about
Fair Value of Financial Instruments."  The estimated fair value amounts have
been determined by the Company using available market information and
appropriate valuation methodologies. However, considerable judgment is
necessarily required to interpret market data to develop the estimates of fair
value.  Accordingly, the estimates presented herein are not necessarily
indicative of the amounts the Company could realize in a current market
exchange.  The use of different market assumptions and/or estimation
methodologies may have a material effect on the estimated fair value amounts.

<PAGE>   20

<TABLE>
<CAPTION>
                                                          1995
                                              -----------------------------
                                                 Carrying          Fair
                                                  Amount          Value
                                              ------------    -------------
<S>                                           <C>             <C>
Assets:
     Cash and due from banks..................$  6,597,807    $  6,597,807
     Federal funds sold.......................   9,790,000       9,790,000
     Investment securities available for sale.  40,313,309      40,313,309
     Investment securities held to maturity...  17,498,191      17,676,919
     Loans.................................... 143,054,377     142,415,377

Liabilities:
     Deposits.................................$195,085,329    $195,721,687
     Short-term borrowings....................   1,596,601       1,596,601
     Other borrowings.........................   3,700,000       3,700,000
</TABLE>


<TABLE>
<CAPTION>
                                                           1994
                                              -----------------------------
                                               Carrying           Fair
                                               Amount             Value
                                              ------------    -------------
<S>                                           <C>             <C>
Assets:
     Cash and due from banks..................$  4,450,912    $  4,450,912
     Federal funds sold.......................   1,020,000       1,020,000
     Investment securities available for sale.  28,529,679      28,529,679
     Investment securities held to maturity...  21,619,504      21,092,769
     Loans....................................  99,058,810      99,780,771

Liabilities:
     Deposits.................................$141,615,495    $140,741,928
     Short-term borrowings....................   1,001,742       1,001,742
     Other borrowings.........................   1,500,000       1,500,000
</TABLE>

The carrying amounts of cash and due from banks, federal funds sold, and
short-term borrowings are a reasonable estimate of their fair value due to the
short term nature of these financial instruments. The fair value of investment
securities available for sale and investment securities held to maturity is
based on quoted market prices and dealer quotes.  The fair value of loans and
deposits is estimated by discounting the future cash flows using interest rates
currently charged/paid by the Bank for such financial instruments.

As required by the Statement, demand deposits are shown at their face value. No
value has been ascribed to core deposits, which generally bear a low rate of
interest or no interest and do not fluctuate in response to changes in interest
rates.

The fair value of commitments to extend credit and standby letters of credit is
estimated to approximate the amount outstanding (see Note 6).  The fair value
has been estimated using the fees currently charged to enter into similar
agreements, taking into account the remaining terms of the agreements and the
present creditworthiness of the counterparties.
<PAGE>   21

The fair value estimates presented herein are based on pertinent information
available to management as of December 31, 1995. Although management is not
aware of any factors that would significantly affect the estimated fair value
amounts, such amounts have not been comprehensively revalued for purposes of
these financial statements since that date and, therefore, current estimates of
fair value may differ significantly from the amounts presented herein.

14.  RELATED PARTY TRANSACTIONS

Certain directors and executive officers of the Company and its subsidiaries,
including their associates, were loan customers of the Company.  An analysis of
the activity during 1995, 1994, and 1993 of loans to executive officers,
directors and principal shareholders is as follows:


<TABLE>
<CAPTION>
                                       1995         1994         1993
     <S>                            <C>          <C>         <C>
     Balance, January 1, .......... $4,162,599   $4,868,492  $ 4,440,957
     Acquired in the acquisition ..    138,279
     Amounts advanced..............  4,789,363    7,726,038    5,423,152
     Repayments.................... (4,951,033)  (8,431,931)  (4,995,617)
                                    ----------   ----------   ----------
     Balance, December 31, ........ $4,139,208   $4,162,599   $4,868,492
                                    ==========   ==========   ==========
</TABLE>


Certain directors of Security received fees related to appraisal services and
loan closings.  These fees were collected from loan customers. Management
believes the services obtained from these directors were on terms as favorable
to the bank as could have been obtained from unaffiliated parties.  Total fees
paid to these directors for these services were $40,350 for 1995, $49,925 for
1994 and $76,645 for 1993.

At December 31, 1995, time deposits of $1,060,000 of a business controlled by
the principal shareholders of the Company were pledged as collateral for loans
of $1,060,000 made to unrelated parties.

15.  SUBSEQUENT EVENT

On January 2, 1996, Habersham Bank formed a new subsidiary, BancMortgage
Financial, Corp ("BancMortgage").  BancMortgage will be a full service mortgage
lender and servicer located in the North Atlanta Metropolitan area. 
BancMortgage received approval from the Department of Banking and Finance of
the State of Georgia to begin business on January 26, 1996 and expects to be in
operation by February 1, 1996.

<PAGE>   22




16.  CONDENSED FINANCIAL STATEMENTS OF COMPANY (PARENT ONLY)

The condensed financial statements of the Company (parent only) are presented
below:


<TABLE>
<CAPTION>
CONDENSED BALANCE SHEETS
                                                    December 31
                                                1995          1994
<S>                                       <C>           <C>
ASSETS:
Cash..................................... $   297,026   $   938,523
Investment in subsidiaries...............  22,100,107    14,633,519
Other investments........................     113,159       275,649
Intangible assets .......................   3,396,564
Other assets.............................       2,896         2,896
                                          -----------   -----------

Total assets............................. $25,909,752   $15,850,587
                                          ===========   ===========

LIABILITY:
Accounts Payable......................... $     4,283

SHAREHOLDERS' EQUITY:
Common stock.............................   2,403,974   $ 1,750,000
Additional paid-in Capital...............   8,837,624     2,446,028
Retained earnings........................  14,932,035    13,110,034
Unrealized gain (loss) on investment
securities available for sale...........      207,637    (1,013,344)
Treasury stock, at cost..................    (475,801)     (442,131)
                                          -----------   -----------
Shareholders' equity - net ..............  25,905,469    15,850,587
                                          -----------   -----------
Total Liability & Shareholders' Equity .. $25,909,752   $15,850,587
                                          ===========   ===========

</TABLE>


<PAGE>   23


     CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS
     For the years ended December 31, 1995, 1994 and 1993

<TABLE>
<CAPTION>

                                           1995         1994        1993
     <S>                              <C>
     INCOME
     Dividends from subsidiary....... $ 1,677,750   $   760,000  $   140,000
     Other income - management fees                              
       from subsidiary...............     324,328       321,533      293,334
                                      -----------   -----------  -----------

     Total Income....................   2,002,078     1,081,533      433,334


     EXPENSES - General and
       administrative................     488,916       327,074      299,558
                                      -----------   -----------  -----------

     Income before income taxes and
       equity in undistributed 
       earnings of subsidiaries......   1,513,162       754,459      133,776
     Income tax credit...............      19,338         1,406        1,579
     Income before equity
       in undistributed earnings.....   1,532,500       755,865      135,355
                                      -----------   -----------  -----------
     Equity in undistributed 
       earnings of subsidiaries......     488,512       902,520    1,422,363
                                      -----------   -----------  -----------

     Net Income......................   2,021,012     1,658,385    1,557,718

     RETAINED EARNINGS AT
     BEGINNING OF YEAR ..............  13,110,034    11,584,709   10,159,511
     Cash dividends on common stock..    (199,011)     (133,060)    (132,520)

                                      -----------   -----------  -----------
     RETAINED EARNINGS AT
     END OF YEAR .................... $14,932,035   $13,110,034  $11,584,709
                                      ===========   ===========  ===========


</TABLE>

<PAGE>   24



     CONDENSED STATEMENTS OF CASH FLOWS
     For the years ended December 31, 1995, 1994 and 1993

<TABLE>
<CAPTION>

                                                1995        1994        1993
     <S>                                    <C>         <C>         <C>
     CASH FLOWS FROM OPERATING ACTIVITIES:     
     Net Income.......................      $2,021,012  $1,658,385  $ 1,557,718
     Amortization of intangible assets         103,277
     Equity in undistributed..........
       earnings of subsidiaries.......        (488,512)   (902,520)  (1,422,362)
                                            ----------  ----------  -----------

     Net cash provided by
       operating activities...........       1,635,777     755,865      135,356
                                            ----------  ----------  -----------

     CASH FLOWS USED IN INVESTING ACTIVITIES:

     Cash payment in acquisition of
       Security Bancorp, Inc. including
       expenses of $345,717 ..........      (2,335,987)
                                            ----------
     CASH FLOWS FROM FINANCING ACTIVITIES:

     Payment of cash dividends........        (199,011)   (133,060)    (132,520)
     Proceeds from sale of
       treasury stock.................         257,724     117,484       86,047
                                            ----------  ----------  -----------
     Net cash used by
       financing activities...........          58,713     (15,576)     (46,473)

     Increase (decrease) in cash......        (641,497)    740,289       88,883

     CASH AT BEGINNING OF YEAR.......          938,523     198,234      109,351
                                            ----------  ----------  ----------- 

     CASH AT END OF YEAR............        $  297,026  $  938,523  $   198,234
                                            ==========  ==========  ===========

</TABLE>

<PAGE>   25


INDEPENDENT AUDITORS' REPORT

Habersham Bancorp,
Its Shareholders and Directors:

We have audited the accompanying consolidated balance sheets of Habersham
Bancorp and its subsidiaries as of December 31, 1995 and 1994, and the related
consolidated statements of income, shareholders' equity, and cash flows for
each of the three years in the period ended December 31, 1995.  These financial
statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company and its subsidiaries
at December 31, 1995 and 1994, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1995,
in conformity with generally accepted accounting principles.

As discussed in the notes to the consolidated financial statements, in 1993 
the Company changed its methods of accounting for income taxes and investment 
securities.




DELOITTE & TOUCHE LLP

Atlanta, Georgia
January 26, 1996