SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB
                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934.

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                           COMMISSION FILE NO. 2-94292

                               FNB BANKING COMPANY
        (Exact name of Small Business Issuer as specified in its charter)

            GEORGIA                                        58-1479370
    -------------------------------------------------------------------------
     (State or other jurisdiction                        (I.R.S. Employer
   of incorporation or organization)                   Identification Number)


        318 SOUTH HILL STREET
        POST OFFICE DRAWER F
          GRIFFIN, GEORGIA                                       30224
    -------------------------------------------------------------------------
    (Address of principal executive offices)                   (Zip Code)

                    Issuer's telephone number: (770) 227-2251

Securities registered pursuant to Section 12(b) of the Act:     NONE.
Securities registered pursuant to Section 12(g) of the Act:     NONE.

Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
                                                        Yes ___ /X/   ___ No / /

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B not contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. NOT APPLICABLE. REGISTRANT IS NOT REQUIRED TO BE
REGISTERED UNDER THE SECURITIES EXCHANGE ACT OF 1934.

State the Issuer's revenue for its most recent fiscal year:  $22,409,147.

State the aggregate market value of the voting stock held by non-affiliates: AS
OF MARCH 22, 2001, 651,398 SHARES OF COMMON STOCK, $1.00 PAR VALUE (THE "COMMON
STOCK"), WITH AN AGGREGATE VALUE OF $29,312,910 (BASED UPON APPROXIMATE MARKET
VALUE OF $45 /SHARE) (THE LAST SALE PRICE KNOWN TO THE REGISTRANT FOR THE COMMON
STOCK, FOR WHICH THERE IS NO ESTABLISHED TRADING MARKET).

State the number of shares outstanding of each of the issuer's classes of Common
Stock as of the latest practicable date: AS OF MARCH 22, 2001, THERE WERE
778,400 SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK.



<PAGE>

                                      INDEX

                                                                          PAGE

     PART I ................................................................1

     Item 1.   Description Of Business......................................1
     Item 2.   Description Of Property......................................7
     Item 3.   Legal Proceedings ...........................................8
     Item 4.   Submission of Matters to a Vote of
                    Security Holders........................................9

     PART II ...............................................................9

     Item 5.   Market for Common Equity and Related
                    Stockholder Matters.....................................9
     Item 6.   Management's Discussion and Analysis or
                   Plan of Operation........................................9
     Item 7.   Financial Statements........................................22
     Item 8.   Changes in and Disagreements with
                    Accountants on Accounting and Financial
                    Disclosure.............................................22

     PART III..............................................................23

     Item 9.   Directors, Executive Officers, Promoters
                    and Control Persons; Compliance with
                    Section 16(a) of the Exchange Act......................23
     Item 10.  Executive Compensation......................................24
     Item 11.  Security Ownership of Certain Beneficial
                     Owners and Management ................................24
     Item 12.  Certain Relationships and Related
                    Transactions...........................................26
     Item 13.  Exhibits and Reports on Form 8-K............................27





                                      -i-


<PAGE>

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

THE REGISTRANT

         FNB Banking Company, a Georgia corporation (the "Company" or "FNB"),
was organized on July 13, 1982. On March 1, 1983, the Company acquired all of
the 200,000 issued and outstanding shares of common stock of First National Bank
of Griffin (the "Bank"). As a result of this transaction, the former
shareholders of the Bank became the shareholders of the Company, and the Bank
became the wholly-owned subsidiary of the Company.

         The Company operates a full-service commercial banking business based
in Griffin, Georgia, providing such customary banking services as checking and
savings accounts, various types of time deposits, safe deposit facilities, money
transfers, and individual retirement accounts. The Company also finances
commercial transactions, makes secured and unsecured loans, and provides other
financial services, including corporate, pension, and personal trust services,
to its customers through the Bank. Through its subsidiary, Griffin Loans, Inc.
("Griffin Loans"), a consumer finance company, the Company engages in the
business of making small loans to individuals under the trade name "First
Credit."

         Certain statements included or incorporated by reference in this Form
10-KSB are forward-looking (as such term is defined in the Securities Exchange
Act of 1934 and the Private Securities Litigation Reform Act of 1995, each as
amended). Such statements may relate to the Company's or the Bank's operations,
performance, and financial condition. These statements are based upon a number
of assumptions and estimates that are inherently subject to significant
uncertainties, many of which are beyond the control of the Company and the Bank.
Actual results may differ materially from those expressed or implied by such
forward-looking statements.

         All percentages and dollar amounts contained in this Form 10-KSB are
approximated and may have been rounded to the nearest whole number to provide a
more easily understandable format.

SERVICES

         The Bank is community oriented, with an emphasis on retail banking, and
offers such customary banking services as consumer and commercial checking
accounts, NOW accounts, savings accounts, certificates of deposit, lines of
credit, MasterCard and Visa accounts, and money transfers. The Bank finances
commercial and consumer transactions, makes secured and unsecured loans, and
provides a variety of other banking services.

DEPOSITS

         The Bank offers a full range of depository accounts and services to
both consumers and businesses. At December 31, 2000, the Bank's deposit base,
totaling $188 million, consisted of $30 million in non-interest bearing demand
deposits (16% of total deposits), $47 million in interest bearing demand
deposits (including money market accounts) (25% of total deposits), $19 million
in savings deposits (10% of total deposits), $67 million in time deposits in
amounts less than $100,000 (36% of total deposits), and $21 million in time
deposits of $100,000 or more (13% of total deposits). Management of the Bank is
of the opinion that its time deposits of $100,000 or more are customer
relationship-oriented and represent a reasonably stable source of funds.



                                       1
<PAGE>

LOANS

         The Bank makes both secured and unsecured loans to individuals, firms,
and corporations, and both its consumer and commercial lending operations
include various types of credit for the Bank's customers. Secured loans include
first and second real estate mortgage loans. The Bank also makes direct
installment loans to consumers on both a secured and unsecured basis. At
December 31, 2000, consumer, real estate (including mortgage and construction
loans), and commercial loans represented 17%, 30%, and 53%, respectively, of the
Bank's total loan portfolio. The Bank owns a consumer finance company, Griffin
Loans. Most loans made by the finance company are for less than $1,000, but
Griffin Loans also makes real estate loans for larger amounts.

LENDING POLICY

         The current lending strategy of the Bank is to make loans only to
persons who reside, work, or own property in its primary trade area consisting
of Spalding and Henry Counties, Georgia. Unsecured loans normally are made only
to persons who maintain depository relationships with the Bank. Secured loans
are made to persons who are well-established and have net worth, collateral, and
cash flow to support the loan. Real estate loans are normally made when such
loans are secured by real property located in the Bank's primary trade area.

         The Bank provides each lending officer with written guidelines for
lending activities. Lending authority is delegated by the Board of Directors of
the Bank to loan officers, each of whom is limited in the amount of secured and
unsecured loans which they can make to a single borrower or related group of
borrowers. All unsecured loans in excess of $50,000 must have the approval of
the loan committee.

         Making loans to businesses to fund working capital is a traditional
function of commercial banks. Such loans are expected to be repaid out of the
cash flow of the commercial entity, and the ability of the borrower to service
its debt is dependent upon the success of the commercial enterprise. It is the
Bank's policy to secure these loans with collateral. Many of the Bank's
commercial loans are secured by real estate collateral because such collateral
is superior to other types of collateral available to small businesses. Loans
secured by commercial real estate, however, particularly if collateral
dependent, are subject to certain inherent risks. Commercial real estate may be
substantially illiquid, and commercial real estate values are difficult to
ascertain and subject to wide fluctuation depending upon economic conditions.

         Inter-agency guidelines adopted by federal bank regulators, including
the Office of the Comptroller of the Currency (the "OCC"), mandate that
financial institutions establish real estate lending policies and establish
certain minimum real estate loan-to-value standards. The Bank has adopted these
federal standards as its minimum standards. These standards require maximum
loan-to-value ratios for various types of real estate loans as set forth below.
The Bank may, however, make exceptions to the minimum standards, which
exceptions must be accounted for and tracked.

                                                                 Loan-to-
                                                              Value Limit
         Loan category                                           (percent)
         -------------                                           ---------

         Raw land                                                      65
         Land development                                              75
         Construction:
         Commercial, multifamily (1) and
            other nonresidential                                       80


                                       2
<PAGE>

         1- to 4-family residential                                    85
         Improved Property                                             85
         Owner-occupied 1- to 4-family and
         home equity                                                  (2)

-----------------------
(1)      Multifamily construction includes condominiums and cooperatives.
(2)      A loan-to-value limit has not been established for permanent mortgage
or home equity loans on owner-occupied, 1-to 4-family residential property. For
any such loan with a loan-to-value ratio that equals or exceeds 90 percent at
origination, appropriate credit enhancement in the form of either mortgage
insurance or readily marketable collateral is required.

LOAN REVIEW AND NON-PERFORMING ASSETS

         The loan review officer of the Company reviews the Bank's loan
portfolio to determine deficiencies and corrective action to be taken. The
results of the reviews by the loan review officer are presented to the President
and the Executive Committee of the Bank. On at least an annual basis, reviews
are conducted for all loans over $50,000. Past due loans are reviewed at least
weekly by lending officers and by the chief credit officer, and a summary report
is reviewed monthly by the Board of Directors. The Board of Directors reviews
all new loans over $25,000 whether current or past due each month.

ASSET/LIABILITY MANAGEMENT

         A committee composed of the Bank's officers is charged with managing
the Bank's assets and liabilities. The committee attempts to manage asset
growth, liquidity, and capital to maximize income and reduce interest rate risk.
The committee directs the Bank's overall acquisition and allocation of funds. At
monthly meetings, the committee reviews and discusses the monthly asset and
liability funds budget in relation to the actual flow of funds, as well as peer
group comparisons; the ratio of the amount of rate-sensitive assets to the
amount of rate-sensitive liabilities; the ratio of the allowance for loan losses
to outstanding and non-performing loans; and other variables, such as expected
loan demand, investment opportunities, core deposit growth within specified
categories, regulatory changes, monetary policy adjustments, and the overall
state of the economy.

COMPETITION

         The banking business is highly competitive. The Company's primary
market area consists of Spalding and Henry Counties, Georgia. The Company
competes in Spalding County with five other commercial banks and in Henry County
with 12 commercial banks. The Bank is the largest bank in Spalding County in
terms of deposits located in the County, with deposits at December 31, 2000 of
$188 million, and the second smallest in Henry County in terms of deposits
located in that county.

         In addition to the Company's competitors in Spalding and Henry
Counties, the Company competes with commercial banks, thrifts, and various other
financial institutions and brokerage houses located outside the market area. To
a lesser extent, the Company also competes for loans with insurance companies,
regulated small loan companies, credit unions, and certain governmental
agencies. In addition, the Company and any non-banking subsidiaries it may
establish in the future compete and will compete with numerous other companies
and financial institutions engaged in similar lines of business, such as other
bank holding companies, leasing companies, and insurance companies.



                                       3
<PAGE>


EMPLOYEES

         As of December 31, 2000, the Company and the Bank had 104 full-time and
25 part-time employees. The Company is not a party to any collective bargaining
agreement. Management believes that the Company has satisfactory relations with
its employees.

SUPERVISION AND REGULATION

GENERAL

         The Company is a registered bank holding company subject to regulation
by the Board of Governors of the Federal Reserve (the "Federal Reserve") under
the Bank Holding Company Act of 1956, as amended (the "Act"). The Company is
required to file financial information with, and is subject to periodic
examination by, the Federal Reserve.

         The Act requires every bank holding company to obtain the Federal
Reserve's prior approval before (1) it may acquire direct or indirect ownership
or control of more than 5% of the voting shares of any bank that it does not
already control; (2) it or any of its non-bank subsidiaries may acquire all or
substantially all of the assets of a bank; and (3) it may merge or consolidate
with any other bank holding company. In addition, a bank holding company is
generally prohibited from engaging in, or acquiring, direct or indirect control
of the voting shares of any company engaged in non-banking activities. This
prohibition does not apply to activities listed in the Act or found by the
Federal Reserve, by order or regulation, to be closely related to banking or
managing or controlling banks as to be a proper incident thereto. Some of the
activities that the Federal Reserve has determined by regulation or order to be
closely related to banking are:

         o    making or servicing loans and certain types of leases;
         o    performing certain data processing services;
         o    acting as fiduciary or investment or financial advisor;
         o    providing brokerage services;
         o    underwriting bank eligible securities;
         o    underwriting debt and equity  securities  on a  limited  basis
              through separately capitalized subsidiaries; and
         o    making investments in corporations or projects designed primarily
              to promote community welfare.

         In addition, bank holding companies whose banking subsidiaries are all
well-capitalized and well-managed may apply to become a financial holding
company. Financial holding companies have the authority to engage in activities
that are "financial in nature" that are not permitted for other bank holding
companies. Some of the activities that the Act provides are financial in nature
are:

         o    lending,  exchanging,   transferring,  investing  for  others  or
              safeguarding money or securities;
         o    insuring,  guaranteeing,  or  indemnifying  against  loss,  harm,
              damage, illness,  disability,  or death, or providing and issuing
              annuities, and acting as principal, agent, or broker with respect
              thereto;
         o    providing financial,  investment,  or economic advisory services,
              including advising an investment company;
         o    issuing or selling instruments representing interests in pools of
              assets permissible for a bank to hold directly; and
         o    underwriting, dealing in, or making a market in securities.


                                       4
<PAGE>

         We have no immediate plans to register as a financial holding company.

         The laws of Georgia require annual registration with the Department of
Banking and Finance (the "DBF") by all Georgia bank holding companies. Such
registration includes information with respect to the financial condition,
operations, management, and intercompany relationships of a bank holding company
and its subsidiaries and related matters. The DBF may also require such other
information as is necessary to keep itself informed as to whether the provisions
of Georgia law and the regulations and orders issued thereunder by the DBF have
been complied with. The DBF may make examinations of each bank holding company
and each bank subsidiary thereof, other than a national bank.

         The Bank is a national bank chartered under the National Bank Act and
is subject to the supervision of, and is regularly examined by, the OCC. The OCC
regulates or monitors all areas of the Bank's operations and activities,
including reserves, loans, mergers, issuance of securities, payments of
dividends, interest rates, and establishment of branches. Interest and certain
other charges collected or contracted for by the Bank are also subject to state
usury laws or certain federal laws concerning interest rates.

         The Bank is insured by the Federal Deposit Insurance Corporation (the
"FDIC"). The major functions of the FDIC with respect to insured banks include
paying depositors to the extent provided by law if an insured bank is closed
without adequate provisions having been made to pay claims of depositors, acting
as a receiver of state banks placed in receivership when appointed receiver by
state authorities, and preventing the development or continuance of unsound and
unsafe banking practices.

         The Company is an "affiliate" of the Bank under the Federal Reserve
Act, which imposes certain restrictions on (i) loans by the Bank to the Company,
(ii) investments in the stock or securities of the Company by the Bank, (iii)
the Bank's taking the stock or securities of an "affiliate" as collateral for
loans by the Bank to a borrower and (iv) the purchase of assets from the Company
by the Bank. Further, a bank holding company and its subsidiaries are prohibited
from engaging in certain tie-in arrangements in connection with any extension of
credit, lease or sale of property or furnishing of services.

PAYMENT OF DIVIDENDS

         The Company is a legal entity separate and distinct from the Bank. Most
of the revenues of the Company result from dividends paid to it by the Bank.
There are statutory and regulatory requirements applicable to the payment of
dividends by the Bank, as well as by the Company to its shareholders.

         As a national bank, the Bank is required by federal law to obtain the
prior approval of the OCC for payments of dividends if the total of all
dividends declared by the Board of Directors in any year will exceed (i) the
total of the Bank's net profits (as defined and interpreted by regulation) for
that year, plus (ii) the Bank's retained net profits (as defined and interpreted
by regulation) of the preceding two years, less any required transfers to
surplus.

         The payment of dividends by the Company and the Bank may also be
affected or limited by other factors, such as the requirement to maintain
adequate capital above regulatory guidelines. In addition, if, in the opinion of
the applicable regulatory authority, a bank under its jurisdiction is engaged in
or is about to engage in an unsafe or unsound practice (which, depending upon
the financial condition of a bank, could include the payment of dividends), such
authority may require, after notice and hearing, that such bank cease and desist
from such practice. The FDIC and the OCC have issued policy statements providing
that insured banks should generally only pay dividends out of current operating


                                       5
<PAGE>

earnings. At December 31, 2000, the Bank's retained earnings from which
dividends could be paid totaled $2.7 million. For 2000, the Company's cash
dividend payout to stockholders was 33 percent of net income.

MONETARY POLICY

         The results of operations of the Bank, and therefore the Company, are
affected by credit policies of monetary authorities, particularly the Federal
Reserve. The instruments of monetary policy employed by the Federal Reserve
include open market operations in U.S. government securities, changes in the
discount rate on bank borrowings and changes in reserve requirements against
bank deposits. In view of changing conditions in the national economy and in the
money markets, as well as the effect of actions by monetary and fiscal
authorities, including the Federal Reserve, no prediction can be made as to
possible future changes in interest rates, deposit levels, loan demand, or the
business and earnings of the Bank.

CAPITAL ADEQUACY

         The Federal Reserve and the OCC have implemented substantially
identical risk-based rules for assessing bank and bank holding company capital
adequacy. These regulations establish minimum capital standards in relation to
assets and off-balance sheet exposures as adjusted for credit risk. Banks and
bank holding companies are required to have (1) a minimum level of total capital
(as defined) to risk-weighted assets of eight percent; (2) a minimum Tier One
Capital (as defined) to risk-weighted assets of four percent; and (3) a Tier One
Capital to average assets of four percent. In addition, the Federal Reserve and
the OCC have established a minimum three percent leverage ratio of Tier One
Capital to total assets for the most highly-rated banks and bank holding
companies. "Tier One Capital" generally consists of common equity not including
unrecognized gains and losses on securities, minority interests in equity
accounts of consolidated subsidiaries, and certain perpetual preferred stock
less certain intangibles. The Federal Reserve and the OCC will require a bank
holding company and a bank, respectively, to maintain a leverage ratio greater
than three percent if either is experiencing or anticipating significant growth
or is operating with less than well-diversified risks in the opinion of the
Federal Reserve. The Federal Reserve and the OCC use the leverage ratio in
tandem with the risk-based ratio to assess the capital adequacy of banks and
bank holding companies. The capital adequacy standards also provide for the
consideration of interest rate risk in the overall determination of a bank's
capital ratio, requiring banks with greater interest rate risk to maintain
adequate capital for the risk.

         In addition, Section 38 of the Federal Deposit Insurance Corporation
Act's "prompt corrective action" provisions set forth five regulatory zones in
which all banks are placed largely based on their capital positions. Regulators
are permitted to take increasingly harsh action as a bank's financial condition
declines. Regulators are also empowered to place in receivership or require the
sale of a bank to another depository institution when a bank's capital leverage
ratio reaches two percent. Better capitalized institutions are generally subject
to less onerous regulation and supervision than banks with lesser amounts of
capital.

         The OCC has adopted regulations concerning the prompt corrective action
provisions that place financial institutions in the following five categories
based upon capitalization ratios: (1) a "well capitalized" institution has a
total risk-based capital ratio of at least ten percent, a Tier One risk-based
ratio of at least six percent and a leverage ratio of at least five percent; (2)
an "adequately capitalized" institution has a total risk-based capital ratio of
at least eight percent, a Tier One risk-based ratio of at least four percent and
a leverage ratio of at least four percent; (3) an "undercapitalized" institution
has a total risk-based capital ratio of under eight percent, a Tier One
risk-based ratio of under four percent or a leverage ratio of under four
percent; (4) a "significantly undercapitalized" institution has a total
risk-based capital ratio of under six percent, a Tier One risk-based ratio of
under three percent or a leverage ratio of under three percent; and (5) a
"critically undercapitalized" institution has a leverage ratio of two percent or


                                       6
<PAGE>

less. Institutions in any of the three undercapitalized categories would be
prohibited from declaring dividends or making capital distributions. The OCC
regulations also establish procedures for "downgrading" an institution to a
lower capital category based on supervisory factors other than capital. Under
the OCC's regulations, the Bank was a "well capitalized" institution at December
31, 2000.

Set forth below are pertinent capital ratios for the Company and the Bank as of
December 31, 2000.


MINIMUM CAPITAL REQUIREMENTS                COMPANY            BANK
----------------------------                -------            ----

Tier 1 Capital to Risk-based                 13.76%          13.59%(1)
   Assets:  4.00%
Total Capital to Risk-based                  14.95%          14.78%(2)
   Assets:  8.00%
Leverage Ratio (Tier 1 Capital               11.03%          10.97%(3)
   to Average Assets): 3.00%

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

(1) Minimum for "Well Capitalized" Banks = 6%
(2) Minimum for "Well Capitalized" Banks = 10%
(3) Minimum for "Well Capitalized" Banks = 5%

RECENT LEGISLATIVE AND REGULATORY ACTION

         On November 12, 1999, President Clinton signed the Gramm-Leach-Bliley
Act, a significant piece of legislation intended to modernize the financial
services industry. The bill repeals the anti-affiliation provisions of the 1933
Glass-Steagall Act to allow for the merger of banking and securities
organizations and permits banking organizations to engage in insurance
activities including insurance underwriting. The bill also allows bank holding
companies to engage in financial activities that are "financial in nature or
complementary to a financial activity." The act lists the expanded areas that
are financial in nature and includes insurance and securities underwriting and
merchant banking among others. The bill also:

          o    prohibits non-financial entities from acquiring or establishing a
               thrift while grandfathering existing thrifts owned by non-
               financial entities.

          o    establishes state regulators as the appropriate functional
               regulators for insurance activities but provides that state
               regulators cannot "prevent or significantly  interfere" with
               affiliations between banks and insurance firms.

          o    contains provisions designed to protect consumer privacy.  The
               bill requires financial institutions to disclose their policy for
               collecting and protecting confidential information and allows
               consumers to "opt out" of information sharing except with
               unaffiliated third parties who market the institutions' own
               products and services or pursuant to joint agreements between two
               or more financial institutions.

          o    provides for functional regulation of a bank's securities
               activities by the Securities and Exchange Commission.

                                       7
<PAGE>

ITEM 2.  DESCRIPTION OF PROPERTY

         The Company's main office is located at 318 South Hill Street, Griffin,
Georgia, 30224, and its telephone number at that office is (770) 227-2251.

         The Company distributes its services through four full-service banking
offices and one limited-service banking office as follows:

          MAIN OFFICE
          -----------

          318 South Hill Street
          Griffin, Georgia 30224

          NORTHSIDE BANK BRANCH
          ---------------------

          1475 West McIntosh Road
          Griffin, Georgia  30223

          SOUTHSIDE BANK BRANCH
          ---------------------

          1103 Zebulon Road
          Griffin, Georgia  30224

          KROGER GRIFFIN BRANCH  (Limited Service Office)
          ---------------------

          100 Spalding Village
          Griffin, Georgia  30223

          HENRY COUNTY BRANCH
          -------------------

          996 Bear Creek Boulevard
          Hampton, Georgia 30228

         The executive offices of the Company and the main office of the Bank
are located in a 33,000 square-foot facility, 318 South Hill Street, Griffin,
Georgia. The Company's main office is subject to a mortgage in the principal
amount of $111,113 at December 31, 2000. None of the other properties of the
Company are subject to encumbrances. The Company owns a building adjacent to its
main office in Griffin which is used for storage of bulk supplies and to house
the offices of Griffin Loans, Inc. The Company or the Bank owns all of the
properties, except the Kroger Griffin Branch Limited Office, which is leased.

ITEM 3.  LEGAL PROCEEDINGS

         The Company is not aware of any material pending legal proceedings to
which the Company or the Bank is a party or to which any of their property is
subject.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matters were submitted to a vote of security holders of the Company
during the fourth quarter of its fiscal year.


                                       8
<PAGE>

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

STOCK

         There is no established public trading market for the Common Stock. As
of March 22, 2001, the Company had 399 shareholders of record. At December 31,
2000, there were 400 shareholders of record. Management is aware of 14 sales of
the Company's stock in 2000, aggregating 9565 shares in blocks ranging from 16
shares to1591 shares at a price of $40 per share. Management is aware of 26
sales of the Company's stock in 1999, aggregating 5,439 shares in blocks ranging
from 17 shares to 1,353 shares at prices ranging from $40 to $42 per share.

DIVIDENDS

         In 1999 and 2000, the Company declared cash dividends of $990,459
($1.25 per share) and $1,059,898 ($1.35 per share), respectively. The Company
intends to continue paying cash dividends on a semi-annual basis. The amount and
frequency of dividends, however, will be determined by the Company's Board of
Directors in light of earnings, capital requirements and the financial condition
of the Company, and no assurances can be given that dividends will be paid in
the future. Information on restrictions on the amount of dividends payable by
the Company appears in Note 10 to the Company's consolidated financial
statements set forth in Item 7 hereof.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

FORWARD-LOOKING STATEMENTS

          This discussion contains forward-looking statements under the private
Securities Litigation Reform Act of 1995 that involve risks and uncertainties.
Although the Company believes that the assumptions underlying the
forward-looking statements contained in the discussion are reasonable, any of
the assumptions could be inaccurate, and therefore, no assurance can be made
that any of the forward-looking statements included in this discussion will be
accurate.  Factors that could cause actual results to differ from results
discussed in forward-looking statements include, but are not limited to:
economic conditions (both generally and in the markets where the Company
operates); competition from other providers of financial services offered by the
Company; government regulation and legislation; changes in interest rates; and
material unforeseen changes in the financial stability and liquidity of the
Company's credit customers, all of which are difficult to predict and which may
be beyond the control of the Company.  The Company undertakes no obligation to
revise forward-looking statements to reflect events or changes after the date of
this discussion or to reflect the occurrence of unanticipated events.

GENERAL

          The Company is a one-bank holding company registered under the Bank
Holding Company Act of 1956 and was incorporated under the laws of the state of
Georgia in 1983. All of the Company's activities are currently conducted by the
Bank. The Bank owns a consumer finance company, First Credit, Inc., which
engages in the business of making small loans to individuals.

          The Bank was most recently examined by its primary regulatory
authority in January of 2001. There were no recommendations by the regulatory
authority that, in management's opinion, will have material effects on the
Company's liquidity, capital resources or operations.


                                       9
<PAGE>

          The following discussion is intended to provide insight into the
financial condition and results of operations of the Company and should be read
in conjunction with the consolidated financial statements and accompanying
notes.

STATEMENTS OF EARNINGS REVIEW

          Net earnings were $3.2 million in 2000, an increase of 52% from the
$2.1 million earned in 1999. Net earnings per share was $4.07 for 2000, compared
with $2.64 reported in 1999, an increase of 54%. Return on average assets and
return on average stockholders' equity for 2000 was 1.45% and 13.82%,
respectively, compared with 1% and 9.67%, respectively, for 1999. Net earnings
were $2.1 million in 1999, a decrease of 28% from the $2.9 million earned by the
Company in 1998. Net earnings per share were $2.64 in 1999, compared with the
$3.62 reported in 1998, a decrease of 27%.

          Net interest income increased by $1.02 million or 9% in 2000. Net
interest income at December 31, 2000 was $12.4 million compared to $11.3 million
in 1999. Net yield (tax equivalent) on interest earning assets (6.16% in 2000
and 5.99% in 1999) increased by 17 basis points in 2000 from 1999. Net interest
income decreased by $8,000 or .01% in 1999 over 1998. Net interest income at
December 31, 1999 and 1998 remained stable at $11.3 million. Net yield (tax
equivalent) on interest earning assets (5.99% in 1999 and 6.58% in 1998)
decreased by 59 basis points in 1999 over 1998.

          The Company's operational results depend primarily on the earnings of
the Bank. Its earnings depend to a large degree on net interest income, which is
the difference between the interest income received from its investments (such
as loans, investment securities, federal funds sold, etc.) and the interest
expense which is paid on deposits and other liabilities.

          The banking industry uses two key ratios to measure relative
profitability of net interest income. The net interest rate spread measures the
difference between the average yield on interest earning assets and the average
rate paid on interest bearing liabilities. The interest rate spread eliminates
the impact of non-interest bearing deposits and gives a direct perspective on
the effect of market interest rate movements. The net interest margin is defined
as net interest income as a percent of average total interest earning assets and
takes into account the positive impact of investing noninterest-bearing
deposits.

          The net interest spread was 5.39% in 2000, 5.13% in 1999 and 5.65% in
1998, while the net interest margin (on a tax-equivalent basis) was 6.16% in
2000, 5.99% in 1998 and 6.58% in 1998.



                                       10
<PAGE>


          The following table shows, for the past three years, the relationship
between interest income and interest expense and the average balances of
interest earning assets and interest bearing liabilities on a tax equivalent
basis.

<TABLE>
<CAPTION>
TABLE 1
AVERAGE CONSOLIDATED BALANCE SHEETS AND NET INTEREST ANALYSIS ON A TAX EQUIVALENT BASIS
(dollar amounts in thousands)

                                                                  For the Years Ended December 31,
                                                 2000                           1999                             1998
                                   -----------------------------------------------------------------------------------------------
                                     Average             Yield/      Average             Yield/      Average               Yield/
                                     Balance   Interest   Rate       Balance  Interest    Rate       Balance   Interest     Rate
                                   -----------------------------------------------------------------------------------------------
<S>                                  <C>       <C>        <C>       <C>        <C>         <C>       <C>         <C>        <C>
Assets:
Interest earnings assets:
   Loans (including loan fees)     $ 163,621   17,098    10.45%     152,329    15,481     10.16%     142,404     15,704     11.03%
   Investment securities:
     Taxable                          27,660    1,972     7.13%      24,850     1,516      6.10%      20,647      1,352      6.55%
     Tax exempt                        8,725      679     7.78%       7,816       624      7.98%       6,366        542      8.51%
   Federal funds sold                  4,388      257     5.86%       7,756       422      5.44%       5,834        328      5.62%
                                     -------   ------               -------    ------                -------     ------
Total interest earning assets        204,394   20,006     9.79%     192,751    18,043      9.36%     175,251     17,926     10.23%
Other non-interest earnings assets    15,954                         17,185                           20,604
                                     -------                        -------                          -------
       Total assets                $ 220,348                        209,936                          195,855
                                     =======                        =======                          =======

Liabilities and stockholders' equity:
Interest-bearing liabilities:
   Deposits:
     Interest-bearing demand
       and savings                 $  61,672    1,468     2.38%      59,987     1,407      2.35%      55,789      1,362      2.44%
     Time                             89,849    5,126     5.71%      85,537     4,686      5.48%      78,844      4,758      6.03%
   FHLB advances                       2,447      187     7.64%       2,256       145      6.43%       1,344         89      6.62%
   Long-term debt                        190       15     7.89%         354        25      7.06%         527         38      7.21%
   Federal funds purchased and
     securities sold under repurchase
     agreements                       14,122      616     4.36%       5,286       229      4.33%       3,169        148      4.67%
                                      ------   ------               -------    ------                -------     ------
       Total interest-bearing
          liabilities                168,280    7,412     4.40%     153,420     6,492      4.23%     139,673      6,395      4.58%
Non-interest bearing deposits         28,016                         30,652                           28,727
Other liabilities                        861                          4,118                            4,815
Stockholders' equity                  23,191                         21,746                           22,640
                                     -------                       --------                          -------
       Total liabilities and
         stockholders' equity      $ 220,348                        209,936                          195,855
                                     =======                        =======                          =======
Excess of interest-earning
   assets over interest-bearing
   liabilities                     $  36,114                         39,331                           35,578
                                     =======                        =======                          =======
Ratio of interest-earning assets to
   interest-bearing liabilities       121.46%                        125.64%                          125.47%
Net interest income                            12,594                          11,551                            11,531
                                               ======                          ======                            ======
Net interest spread                                       5.39%                            5.13%                             5.65%
                                                          ====                             ====                              ====
Net interest yield on interest
   earning assets                                         6.16%                            5.99%                             6.58%
                                                          ====                             ====                              ====
</TABLE>



          Non-accrual loans and the interest income that was recorded on these
loans, if any, are included in the yield calculation for loans in all periods
reported.

                                       11
<PAGE>


          Tax exempt interest income is calculated on a tax equivalent basis.

          The following table shows the relative impact on net interest income
of changes in the average outstanding balances (volume) of interest earning
assets and interest bearing liabilities and the rates earned and paid by the
Company on such assets and liabilities. Variances resulting from a combination
of changes in rate and volume are allocated in proportion to the absolute dollar
amounts of the change in each category.

TABLE 2
CHANGES IN INTEREST INCOME AND EXPENSE ON A TAX EQUIVALENT BASIS
(dollar amounts in thousands)
<TABLE>
<CAPTION>

                                                                   Increase (decrease) due to changes in:
                                                                   --------------------------------------
                                                               2000 over 1999                      1999 over 1998
                                                               --------------                      --------------
                                                          Volume    Rate    Total           Volume      Rate     Total
<S>                                                  <C>             <C>    <C>             <C>       <C>        <C>
Interest income on:
   Loans (including loan fees)                       $   1,171       446    1,617             610       (833)    (223)
   Investment securities:
     Taxable                                               183       273      456             376       (212)     164
     Tax exempt                                             70       (15)      55             126        (44)      82
   Federal funds sold                                     (200)       35     (165)            120        (26)      94
                                                         -----       ---    -----           -----      -----      ---
        Total interest earning assets                    1,224       739    1,963           1,232     (1,115)     117
                                                         -----       ---    -----           -----      -----      ---
Interest expense on:
   Deposits:
     Interest-bearing demand and savings                    40        21       61              88        (43)      45
     Time                                                  241       199      440             967     (1,039)     (72)
   FHLB advances                                            13        29       42              58         (2)      56
   Long-term debt                                          (13)        3      (10)            (12)        (1)     (13)
   Federal funds purchased and securities sold
     under repurchase agreements                           385         2      387              91        (10)      81
                                                         -----       ---    -----           -----      -----      ---
        Total interest-bearing liabilities                 666       254      920           1,192     (1,095)      97
                                                         -----       ---    -----           -----      -----      ---
Increase (decrease) in net interest income           $     558       485    1,043              40        (20)      20
                                                         =====       ===    =====           =====      =====      ===
</TABLE>

         Other operating income in 2000 of $2.6 million increased from 1999 by
$347,000 or 15% primarily due to an increase of $275,000 in service charges on
deposit accounts associated with an increase in the number of corporate deposit
accounts that are subject to analysis charges and an increase in insufficient
fund charges. Additionally, trust service fees increased $122,500 due to the
settlement of three large estates. Finally, 1999 included an $88,000 gain on the
sale of foreclosed property and $40,000 of investment security write-downs that
were not part of the 2000 balances.

          Other operating expenses increased by $372,000 (4.1%) in 2000 over
1999. Salary increases for the existing workforce accounted for $220,000 of the
overall increase, while the balance of the increase was spread among many items
including an increase of utilities expense, general media advertising and a bank
customer club which was implemented in 2000.

          Income tax expense expressed as a percentage of 2000 pre-tax earnings
was 33% versus 31% in 1999 due to tax exempt interest income declining relative
to total pre-tax earnings.

         Other operating income in 1999 of $2.3 million decreased from 1998 by
$58,000 or 2.5%. The decrease was primarily attributable to a decrease in trust
department fees and losses on securities. Other operating expenses increased

                                       12
<PAGE>

$336,000 (3.8%) in 1999 over 1998 principally due to the increase in employee
costs related to an increase in salaries of key employees, insurance increases
and an increase in depreciation expense related to the Year 2000 purchases and
capital improvements. Income taxes expressed as a percentage of earnings before
income taxes decreased as tax exempt income as a percentage of earnings before
taxes increased.

BALANCE SHEET REVIEW

      During 2000, average total assets increased $10.4 million (5%) over 1999.
Average deposits increased $3.4 million (2%) in 2000 over 1999. Average loans
increased $11.3 million (7.4%) in 2000 over 1999. During 1999, average total
assets increased $14.1 million (7.2%) over 1998. Average deposits increased
$12.8 million (7.8%) in 1999 over 1998. Average loans increased $9.9 million
(7.0%) in 1999 over 1998.

          Total assets at December 31, 2000, were $227.7 million, representing a
$7.95 million (3.6%) increase from December 31, 1999. Total deposits increased
$10.5 million (5.9%) from 1999 to 2000 while total gross loans increased $8.6
million (6%) during 2000. Time deposits increased $7.1 million from 1999 to 2000
while all other deposit accounts increased $3.4 million in 2000. As the local
economy remains strong, loan demand increased and the Bank showed increases in
the commercial and financial lending areas. These loan increases were funded
principally with increases in deposit accounts.

Total assets at December 31, 1999, were $219.7 million, representing a $16.9
million (8.4%) increase from December 31, 1998. Total deposits increased $8.2
million (4.8%) from 1998 to 1999 while total gross loans increased $7.5 million
(5%) during 1999. Time deposits increased $596,000 from 1998 to 1999 while all
other deposit accounts increased $7.6 million in 1999.

INVESTMENTS

          The investment portfolio consists of debt securities and to a lesser
extent equity securities, which provide the Company with a source of liquidity
and a long-term, relatively stable source of income. Additionally, the
investment portfolio provides a balance to interest rate and credit risk in
other categories of the balance sheet while providing a vehicle for the
investment of available funds, furnishing liquidity, and supplying securities to
pledge as required collateral for certain deposits.



                                       13
<PAGE>


TABLE 3
INVESTMENT PORTFOLIO
(dollar amounts in thousands)

          The following table shows the carrying value of the Company's
securities, by security type, as of December 31, 2000, 1999, and 1998:

HELD TO MATURITY                                2000           1999         1998
                                                ----           ----         ----

United States treasuries and agencies       $      -             -           500
State, county and municipal                        -             -         6,019
Mortgage-backed securities                         -             -           560
                                              ------        ------        ------

      Totals                                $      -             -         7,079
                                              =======       ======        ======

AVAILABLE FOR SALE

United States treasuries and agencies       $ 15,403        13,345        10,583
State, county and municipal                    9,408         8,332           800
Mortgage-backed securities                    11,306         8,136         8,182
Equity securities                              1,264         1,367         2,006
                                              ------        ------        ------

                                            $ 37,381        31,180        21,571
                                              ======        ======        ======

OTHER INVESTMENTS                           $    848           722           826
                                              ======        ======        ======

          Other investments include Federal Reserve Bank stock and Federal Home
Loan Bank stock. During 1999, in connection with the implementation of Statement
of Financial Accounting Standards No. 133, "Accounting for Derivatives and
Hedging Activities," all held to maturity investment securities were transferred
to available for sale. This transfer increased stockholders' equity by $4,000.

          The following table presents the expected maturity of the total
securities by maturity date and average yields based on amortized cost (for all
obligations on a fully taxable basis, assuming a 34% tax rate) at December 31,
2000. The composition and maturity/repricing distribution of the securities
portfolio is subject to change depending on rate sensitivity, capital and
liquidity needs.

TABLE 4
EXPECTED MATURITY OF SECURITIES
(dollar amounts in thousands)
<TABLE>
<CAPTION>

                                     United States                                             Weighted
Maturities at                       Treasuries and         Mortgage-        State, County       Average
December 31, 1999                      Agencies        Backed Securities    and Municipal       Yields
-----------------                      --------        -----------------    -------------       -------

<S>                                   <C>                   <C>                 <C>               <C>
Within 1 year                         $   2,000                835                500             6.77%
After 1 through 5 years                  11,482              7,774              3,636             6.72%
After 5 through 10 years                  1,974              2,621              3,238             6.74%
After 10 years                                -                  -              1,922             6.92%
                                         ------             ------              -----
              Totals                  $  15,456             11,230              9,296
                                         ======             ======              =====
</TABLE>


                                       14
<PAGE>

          Mortgage backed securities are included in the maturities categories
in which they are anticipated to be repaid based on scheduled maturities and
yields on tax exempt securities are calculated on a tax equivalent basis.

TABLE 5
LOAN PORTFOLIO
(dollar amounts in thousands)

The following table presents loans by type at the end of each of the last five
years.
<TABLE>
<CAPTION>

                                                                   December 31,
                                                                   ------------
                                            2000         1999         1998         1997        1996
                                            ----         ----         ----         ----        ----
<S>                                       <C>          <C>          <C>          <C>         <C>
Commercial, financial
   and agricultural                        87,884       76,377       69,821       63,182      52,437
Real estate - construction                  8,358        8,789        5,005        5,634       3,604
Real estate - mortgage                     40,469       42,189       44,170       45,794      44,688
Installment loans to
   individuals                             28,315       29,042       29,937       26,179      27,302
                                          -------      -------      -------      -------     -------
                                          165,026      156,397      148,933      140,789     128,031

Less:  Unearned interest and fees            (374)        (321)        (361)        (304)       (330)
       Allowance for loan losses           (2,137)      (2,589)      (1,708)      (2,013)     (1,422)
                                          -------      -------      -------      -------     -------
             Loans, net                   162,515      153,487      146,864      138,472     126,279
                                          =======      =======      =======      =======     =======
</TABLE>

The following table sets forth the maturity distribution of real estate -
construction and commercial, financial and agricultural loans, including the
interest rate sensitivity for loans maturing in greater than one year, as of
December 31, 2000.

TABLE 6
LOAN PORTFOLIO MATURITY
<TABLE>
<CAPTION>
(dollar amounts in thousands)\
                                                    Commercial,             Real
                                                   Financial and          Estate -
      Maturity                                     Agricultural         Construction           Total
      --------                                     ------------         ------------           -----
<S>                                                <C>                      <C>                <C>
      Within 1 year                                $  45,789                8,322              54,111
      1 to 5 years                                    38,559                   36              38,595
      After 5 years                                    3,536                    -               3,536
                                                     -------                -----              ------
           Totals                                  $  87,884                8,358              96,242
                                                      ======                =====              ======

                                                        Fixed             Variable
                                                     Interest             Interest
                                                       Rates               Rates                Total
  Commercial, financial and agricultural:
      1 to 5 years                                 $  36,721                1,838              38,559
      After 5 years                                    1,227                2,309               3,536
                                                      ------                -----              ------
                                                   $  37,948                4,147              42,095
                                                      ======                =====              ======
  Real estate - construction
      1 to 5 years                                 $      36                    -                  36
                                                      ======                =====              ======
</TABLE>


                                       15
<PAGE>


          The provision for loan losses in 2000 was $734,000 compared to $1.5
million in 1999. The provision for loan losses continues to reflect management's
estimate of potential loan losses inherent in the portfolio and the creation of
an allowance for loan losses adequate to absorb such losses. The allowance for
loan losses represented 1.3% and 1.7% of total loans outstanding at December 31,
2000 and 1999, respectively. Net charge-offs were $1.2 million and $579,000
during 2000 and 1999, respectively. Management believes that these levels of
allowance are appropriate based upon the Company's loan portfolio and the
current economic conditions.

         The provision for loan losses in 1999 was $1.5 million compared to
$530,000 in 1998. The increase is primarily attributable to one significant
commercial relationship of $1.1 million that had been down-graded to doubtful.
In addition, First Credit (a wholly-owned subsidiary of the Bank) increased its
provision for loan losses by $190,000 during 1999 due to losses realized in its
portfolio. The allowance for loan losses represented 1.7% and 1.2% of total
loans outstanding at December 31, 1999 and 1998, respectively. Net charge-offs
were $579,000 and $835,000 during 1999 and 1998, respectively.

          The Company has a dedicated loan review function. All loans of $50,000
or more are reviewed annually and placed in various loan grading categories
which assist in developing lists of potential problem loans. These loans are
constantly monitored by the loan review function to ensure early identification
of repayment problems so that adequate allowances can be made through the
provision for loan losses. The formal allowance for loss adequacy test is
performed at month end before each calendar quarter end. Specific amounts of
loss are estimated on problem loans and historical loss percentages are applied
to the balance of the portfolio using certain portfolio stratifications.
Additionally, the evaluation takes into consideration such factors as changes in
the nature and volume of the loan portfolio, current economic conditions,
regulatory examination results, and the existence of loan concentrations.

          Management's judgment in determining the adequacy of the allowance is
based on evaluations of the collectibility of loans. These evaluations take into
consideration such factors as changes in the nature and volume of the loan
portfolio, current economic conditions that may affect the borrower's ability to
pay, overall portfolio quality, and review of specific problem loans. In
determining the adequacy of the allowance for loan losses, management uses a
loan grading system that rates loans in six different categories. Grades four
though six are assigned allocations of loss based on management's estimate of
potential loss which is generally based on discounted collateral deficiencies.
Loans graded one through three are stratified by type and allocated loss ranges
based on historical loss experience for the strata. The combination of these
results are compared quarterly to the recorded allowance for loan losses and
material differences are adjusted by increasing or decreasing the provision for
loan losses. Management uses a devoted internal loan reviewer who is independent
of the lending function to challenge and corroborate the loan grading system and
provide additional analysis in determining the adequacy of the allowance for
loan losses and the future provisions for estimated loan losses.

          Management believes that the allowance for loan losses is adequate.
While management uses available information to recognize losses on loans, future
additions to the allowance may be necessary based on changes in economic
conditions. In addition, regulators, as an integral part of their examination
process, periodically review the Company's allowance for loan losses. Such
regulators may require the Company to recognize additions to the allowance based
on their judgments of information available to them at the time of their
examination. In the most recent regulatory examination completed in February
2001, no additions to the allowance were deemed necessary.

          The Company does not allocate the allowance for loan losses to various
loan categories. The entire allowance is available to absorb losses from any and
all loans. Management anticipates gross charge-offs for 2001 to approximate
$750,000, of which $450,000 would be associated with loans classified as


                                       16
<PAGE>

commercial and the balance with consumer type loans. Anticipated charge-offs are
an estimate based on historical experience and other judgmental factors and may
be more or less than those that ultimately occur.

          The following table presents a summary of changes in the allowance for
loan losses for each of the past five years.

<TABLE>
<CAPTION>
TABLE 7
ALLOWANCE FOR LOAN LOSSES
(dollar amounts in thousands)                                             December 31,
                                                                          ------------
                                                   2000          1999        1998         1997         1996
                                                   ----          ----        ----         ----         ----

<S>                                              <C>            <C>          <C>          <C>          <C>
Balance at beginning of year                     $ 2,589        1,708        2,013        1,422        1,273
Charge-offs:
  Commercial, financial and agricultural           1,083          270          663           55           67

  Real estate-mortgage                                33           41           53            8           64

  Installment loans to individuals                   320          528          315          331          342
                                                   -----        -----        -----          ---        -----

                                                   1,436          839        1,031          394          473
                                                   -----        -----        -----          ---        -----
Recoveries:
  Commercial, financial and agricultural              56           47           19           78           96

  Real estate-mortgage                                13            5           23            -            7

  Installment loans to individuals                   182          208          154          188          154
                                                   -----        -----          ---          ---        -----

                                                     251          260          196          266          257
                                                   -----        -----        -----          ---        -----

  Net charge-offs                                  1,185          579          835          128          216

  Additions charged to operations                    733        1,460          530          719          365
                                                   -----        -----        -----          ---        -----

  Balance at end of year                         $ 2,137        2,589        1,708        2,013        1,422
                                                   =====        =====        =====        =====        =====
Ratio of net charge-offs during the period
  to average loans outstanding during
  the period                                        .72%         .38%          .59%        .09%         .18%
                                                    ===          ===           ===          ==          ===
</TABLE>



                                       17
<PAGE>

          The following table summarizes past due and non-accrual loans, other
real estate and repossessions, and income that would have been reported on
non-accrual loans for each of the past five years (in thousands):

<TABLE>
<CAPTION>
TABLE 8
NON-PERFORMING ASSETS
(dollar amounts in thousands)                                        December 31,
                                                                     ------------
                                              2000         1999         1998         1997         1996
                                              ----         ----         ----         ----         ----
<S>                                           <C>          <C>          <C>          <C>            <C>
Other real estate and repossessions         $     -            -           33           -            90
Accruing loans 90 days or more
  past due                                      142          281          256          275          216
Non-accrual loans                             6,685        1,342        1,259        2,538          477
Interest on non-accrual loans which
  would have been reported                      319           20          209          187           38
</TABLE>


          Non-accrual loans in 2000 increased $5.3 million from 1999 primarily
due to one large commercial loan to a medical facility in the amount of $3.2
million and a large account receivable financing customer with a balance of $1.1
million were placed on non-accrual status at year end 2000. The Bank has imposed
specific allocations of $1.1 million, which are maintained in the allowance for
loan losses, for impaired loans. See note 3 to the consolidated financial
statements for more discussion on impaired loans. There were no related party
loans that were considered non-performing at December 31, 2000.

          While there may be additional loans in the portfolio that may become
classified as conditions indicate, management is not aware of any potential
problem or restructured loans that are not disclosed in the table above.

          A loan is placed on non-accrual status when, in management's judgment,
the collection of interest appears doubtful. As a result of management's ongoing
review of the loan portfolio, loans are classified as non-accrual generally when
they are past due in principal or interest payments for more than 90 days or it
is otherwise not reasonable to expect collection of principal and interest under
the original terms. Exceptions are allowed for 90 day past due loans when such
loans are well secured and in process of collection. Generally, payments
received on non-accrual loans are applied directly to principal.

DEPOSITS

          Time deposits of $100,000 and greater totaled $26.4 million at
December 31, 2000, compared with $24.5 million at year-end 1999. The following
table sets forth the scheduled maturities of time deposits of $100 thousand and
greater at December 31, 2000.

TABLE 9
DEPOSITS
(dollar amounts in thousands)

      Within 3 months                   $  4,719
      After 3 through 6 months             9,116
      After 6 through 12 months            6,631
      After 12 months                      5,952
                                          ------
                 Total                  $ 26,418
                                          ======


                                       18
<PAGE>

LIQUIDITY

          The Bank must maintain, on a daily basis, sufficient funds to cover
the withdrawals from depositors' accounts and to supply new borrowers with
funds. To meet these obligations, the Bank keeps cash on hand, maintains account
balances with its correspondent banks, and purchases and sells federal funds and
other short term investments. Asset and liability maturities are monitored in an
attempt to match these to meet liquidity needs. It is the policy of the Bank to
monitor its liquidity to meet regulatory requirements and their local funding
requirements.

          The Bank maintains relationships with correspondent banks that can
provide funds to it on short notice, if needed. Presently, the Bank has
arrangements with a commercial bank for short term unsecured advances up to $5.0
million.

          Cash and cash equivalents decreased $7.8 million to a total $15.5
million at December 31, 2000, as cash flows used from investing activities
out-paced amounts provided by operating and financing activities. Cash inflows
from operations totaled $4.2 million in 2000, while inflows from financing
activities totaled $3.4 million, most of which were net deposit increases during
2000 of $10.5 million, increases in FHLB advances of $32.1 million and $2.1
million increases in repurchase agreements. Included in financing activities
were note payable repayments of $167,000, FHLB advance repayments of $39.8
million, $1 million of dividends paid to stockholders and $391,000 for the
repurchase and retirement of common stock.

          Investing activities used $15.4 million of cash and cash equivalents,
principally composed of net advances of loans to customers of $9.8 million
during 2000 and net investment security increases of $5.3 million.

          See the consolidated statements of cash flows in the consolidated
financial statements for a more complete analysis of cash flows.



                                       19
<PAGE>


CAPITAL RESOURCES

          The Company continues to maintain adequate capital ratios. The
following tables present the Company's regulatory capital position at December
31, 2000.

TABLE 10
CAPITAL RATIOS
<TABLE>
<CAPTION>

                                                        Actual as of December 31, 2000
                                                        ------------------------------
<S>        <C>                                                      <C>
      Tier 1 Capital                                                13.76%
      Tier 1 Capital minimum requirement                             4.00%
                                                                   ------
      Excess                                                         9.76%
                                                                   ======
      Total Capital                                                 14.95%
      Total Capital minimum requirement                              8.00%
                                                                   ------
      Excess                                                         6.95%
                                                                   ======

                    Leverage Ratio
                                                           As of December 31, 2000
                                                           -----------------------
      Tier 1 Capital to adjusted total assets
        ("Leverage Ratio")                                          11.03%
</TABLE>

          For a more complete discussion of the actual and required ratios of
the Company and its Bank subsidiary, see Note 15 to the consolidated financial
statements.

      Average equity to average assets was 10.52% in 2000, 10.36% in 1999 and
11.56% during 1998. The ratio of dividends declared to net earnings was 33.07%
during 2000, compared with 47.08% and 34.58% in 1999 and 1998, respectively.

ASSET/LIABILITY MANAGEMENT

          It is the Company's objective to manage assets and liabilities to
provide a satisfactory, consistent level of profitability within the framework
of established cash, loan, investment, borrowing and capital policies. Certain
officers are charged with the responsibility for monitoring policies and
procedures that are designed to ensure acceptable composition of the
asset/liability mix. It is the overall philosophy of management to support asset
growth primarily through growth of core deposits, which include deposits of all
categories made by local individuals, partnerships and corporations. The
objective of the policy is to control interest sensitive assets and liabilities
so as to minimize the impact of substantial movements in interest rates on
earnings.

          The asset/liability mix is monitored on a regular basis. A report
reflecting the interest sensitive assets and interest sensitive liabilities is
prepared and presented to the Board of Directors on a monthly basis. One method
to measure a bank's interest rate exposure is through its repricing gap. The gap
is calculated by taking all assets that reprice or mature within a given
timeframe and subtracting all liabilities that reprice or mature within that
timeframe. The difference between these two amounts is called the "gap", the
amount of either liabilities or assets that will reprice without a corresponding
asset or liability repricing.


                                       20
<PAGE>

          A negative gap (more liabilities repricing than assets) generally
indicates that the bank's net interest income will decrease if interest rates
rise and will increase if interest rates fall. A positive gap generally
indicates that the bank's net interest income will decrease if rates fall and
will increase if rates rise.

          The following table summarizes the amounts of interest-earning assets
and interest-bearing liabilities outstanding at December 31, 2000 that are
expected to mature, prepay or reprice in each of the future time periods shown.
Except as stated below, the amount of assets or liabilities that mature or
reprice during a particular period was determined in accordance with the
contractual terms of the asset or liability. Adjustable rate loans are included
in the period in which interest rates are next scheduled to adjust rather than
in the period in which they are due, and fixed rate loans and mortgage-backed
securities are included in the periods in which they are anticipated to be
repaid based on scheduled maturities. The Company's savings accounts and
interest-bearing demand accounts (NOW and money market deposit accounts), which
are generally subject to immediate withdrawal, are included in the "Three Months
or Less" category, although historical experience has proven these deposits to
be more stable over the course of a year.

TABLE 11
INTEREST RATE GAP SENSITIVITY
(dollar amounts in thousands)
<TABLE>
<CAPTION>
                                                              At December 31, 2000
                                                              Maturing or Repricing in
                                          Three            Four
                                        Months or       Months to         1 to 5          Over 5
                                           Less         12 Months          Years           Years            Total
                                        ----------      ----------        -------         -------           -----
<S>                                   <C>                <C>               <C>              <C>               <C>
Interest-earning assets:
  Interest-bearing deposits with
     other banks                      $     500                -                -                -               500
  Federal funds sold                      5,996                -                -                -             5,996
  Investment securities                     501            1,984           17,562           17,334            37,381
  Mortgage loans held for sale            1,087                -                -                -             1,087
  Loans                                  40,887           29,869           71,974           19,785           162,515
  Other investments                           -                -                -              848               848
                                       --------          -------           ------           ------           -------
Total interest-bearing assets            48,971           31,853           89,536           37,967           208,327
                                       --------          -------           ------           ------           -------

Interest-bearing liabilities:
  Deposits:
     Demand and savings                  65,504                -                -                -            65,504
     Time deposits                       20,383           51,446           20,905                -            92,734
     Securities sold under
       Repurchase agreements             11,442                -                -                -            11,442
  FHLB advances                              31               93              496              380             1,000
  Notes payable                              42               69                -                -               111
                                        -------          -------           ------          -------           -------
Total interest-bearing liabilities       97,402           51,608           21,401              380           170,791
                                        -------          -------           ------           ------           -------
Interest sensitive difference
  per period                          $ (48,431)         (19,755)          68,135           37,587            37,536
                                        =======          =======           ======           ======            ======
Cumulative interest sensitivity
  difference                          $ (48,431)         (68,186)             (51)          37,536
Cumulative difference to total
  assets                                 (21.27)%         (29.95)%          (0.02)%          16.49%
</TABLE>


                                       21
<PAGE>

          At December 31, 2000, the difference between the Company's liabilities
and assets repricing or maturing within one year was $68.2 million. Due to an
excess of liabilities repricing or maturing within one year, a rise in interest
rates would cause the Company's net interest income to decline.

          Certain shortcomings are inherent in the method of analysis presented
in the foregoing table. For example, although certain assets and liabilities may
have similar maturities or periods to repricing, they may react in different
degrees or at different points in time to changes in market interest rates.
Additionally, certain assets, such as adjustable-rate mortgages, have features
that restrict changes in interest rates, both on a short-term basis and over the
life of the asset. Changes in interest rates, prepayment rates, early withdrawal
levels and the ability of borrowers to service their debt, among other factors,
may change significantly from the assumptions made in the table.

INFLATION

          Inflation impacts the growth in total assets in the banking industry
and causes a need to increase equity capital at higher than normal rates to meet
capital adequacy requirements. The Company copes with the effects of inflation
through the management of its interest rate sensitivity gap position, by
periodically reviewing and adjusting its pricing of services to consider current
costs, and through managing its level of net income relative to its dividend
payout policy.

ITEM 7.  FINANCIAL STATEMENTS

          The financial statements and the report of independent public
accountants are included in this report beginning at page F-1.


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

          For the year ended December 31, 2000, the accounting firm of Porter
Keadle Moore, LLP was the principal accountant for the Company. The Company had
no disagreements with its accountants on any matters of accounting principle or
practices or financial statement disclosure.



                                       22
<PAGE>


                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

THE BOARD OF DIRECTORS

          The following table sets forth for each director of the Company as of
March 22, 2001, (a) the person's name, (b) his age at December 31, 2000, (c) the
year he was first elected as a director of the Company and (d) his positions
with the Company and the Bank, other than as a director, and his principal
occupation and business experience for the past five years.
<TABLE>
<CAPTION>

                                      Year First      Position with Company; Principal
Name                         Age       Elected        Occupation; Business Experience
----                         ---       -------        -------------------------------

<S>                          <C>         <C>        <C>
J. Henry Cheatham, III       50          1994       Vice President of Textiles, Inc.

James G. Cheatham            48          1998       President of the 1888 Group, a textile company

C. A. Knowles                68          1982       President, Chief Executive Officer, and
                                                    Treasurer of the Company and President
                                                    of the Bank

James A. Mankin              74          1982       Retired; Merchant and Real Estate Developer

David G. Newton              53          1990       Real Estate Developer

John T. Newton, Jr           54          1993       Chairman of the Board of the Company;
                                                    Chairman of the Board of the Bank; Attorney,
                                                    Newton & Howell, P.C
</TABLE>

         Directors are elected at each annual meeting of shareholders and hold
office until the next annual meeting and until their successors are elected and
qualified. John T. Newton, Jr. and David G. Newton are brothers and are first
cousins of J. Henry Cheatham, III and James G. Cheatham, who are also brothers.
There are no other family relationships among directors and executive officers
of the Company.

EXECUTIVE OFFICERS

      The following table sets forth for each executive officer of the Company
(a) the person's name, (b) his age at December 31, 2000, (c) the year he was
first elected as an executive officer of the Company and (d) his positions with
the Company and the Bank.

<TABLE>
<CAPTION>
                                      Year First     Principal Occupation;
        Name                 Age       Elected       Business Experience
        ----                 ---       -------       -------------------

<S>                          <C>         <C>        <C>
C. A. Knowles                68          1982       President, Chief Executive Officer and Treasurer of the
                                                    Company and President of the Bank.

William K. Holmes            50          1974       Assistant Treasurer since 1993, Senior Vice President of
                                                    the Bank since 1974, Principal Accounting and Financial
                                                    Officer.
</TABLE>



                                       23
<PAGE>

ITEM 10.  EXECUTIVE COMPENSATION

      The following table sets forth the annual compensation paid by the Company
and its subsidiary to certain of the Company's executive officers whose cash
compensation, including salary and bonus, exceeded $100,000.

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

                                                Annual Compensation              Long-Term
                                                                                Compensation
Name and Principal Position          Year   Salary(1)    Bonus         Other      Other(3)
                                     ----   ------       -----         -----      -----

<S>                                 <C>     <C>          <C>            <C>       <C>
C. A. Knowles                       2000    $185,640     $78,338        (2)       17,535
President, Chief Executive          1999     203,680      29,367        (2)       16,700
Officer, and Treasurer              1998     193,343      20,400        (2)        7,019

Christopher L. Hill                 2000     $97,262     $21,702        (2)       11,735
Executive Vice President,           1999      86,800       6,840        (2)        9,202
Commercial Loans                    1998      82,600      17,820        (2)        9,913

J. Charles Copeland                 2000    $105,962     $10,050        (2)       10,572
 Executive Vice President,          1999      96,100         100        (2)        8,527
General Banking                     1998      78,650      11,800        (2)        9,063

William K. Holmes                   2000    $102,046     $ 3,500        (2)       10,576
Asst. Treasurer                     1999     111,312       5,000        (2)       10,993
                                    1998     104,197      13,575        (2)       10,085

James H. Smallwood                  2000     $70,692     $31,859        (2)       10,276
Senior Vice President               1999      70,000      36,357        (2)       10,657
Management Loans                    1998      70,000      30,579        (2)       10,078
---------------------
(1)   Includes Director's fees
(2)   Does not meet Securities and Exchange Commission threshold for disclosure.
(3)   Represents Company matching of 401(k) contributions.
</TABLE>


DIRECTOR COMPENSATION

      Each director of the Company receives a $1,600 annual retainer plus $300
per meeting attended for their service as a director of the Company. Each
director of the Bank receives an annual retainer of $3,000 plus $300 per meeting
attended for their service as a director of the Bank and $150 for each Board
committee meeting they attend.



                                       24
<PAGE>


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

PRINCIPAL HOLDERS OF STOCK

      The following table provides for each person who, to the best information
and knowledge of the Company, beneficially owned 5% or more of the outstanding
shares of Common Stock on March 22, 2001, the following information: (a) the
owner's name and address, (b) the number of shares of Common Stock owned, and
(c) the percentage such number represents of the outstanding shares of Company
Stock. Unless otherwise indicated, the listed owners are the record owners of,
and have sole voting and investment powers over, their shares.

<TABLE>
<CAPTION>
                                                                  NUMBER OF SHARES
                    NAME AND ADDRESS                             BENEFICIALLY OWNED        PERCENTAGE OF TOTAL
                    ----------------                             ------------------        -------------------
<S>                                                                 <C>                         <C>
435 Associates, Ltd.
Post Office Box 238638, Encinitas, California 92023                  49,920(1)                    6.41%

Newton Family Partnership
Post Office Drawer F, Griffin, Georgia  30224                       171,904(2)                   22.07%

John T. Newton, Sr.
1076 Maple Drive, Griffin, Georgia  30223                           191,228(3)                   24.55%

Harvey M. Cheatham
Post Office Box 238638, Encinitas, California 92023                  71,920(4)                    9.23%

John Henry Cheatham, III
2773 Hwy. 16 West, Griffin, Georgia  30223                           44,052(5)                    5.66%

EMC Investments Ltd. Partnership
703 Marylyn Circle, Petaluma , California 949545895                  42,000(6)                    5.39%

James G. Cheatham
Post Office Box 506, Griffin, Georgia  30224                         49,302(7)                    6.33%

Lelia Cheatham Von Stein
445 Rich Mountain Road. Brevard, North Carolina  28712               49,002(8)                    6.29%

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

(1) Harvey M. Cheatham has sole voting and investment power over the shares
    owned by the record by the partnership under the terms of the partnership
    agreement.
(2) John T. Newton, Sr. has sole voting and investment power over the shares
    owned of record by the partnership under the terms of the partnership
    agreement.
(3) Of the indicated shares, 171,904 shares are owned of record by the Newton
    Family Partnership, and Mr. Newton has sole voting and investment power with
    respect to these shares. Includes 2808 shares owned by the Trust Under Will
    of Virginia Cheatham Newton.
(4) Of the indicated shares, 16,000 shares are subject to voting and investment
    power by Mr. Cheatham as general partner for Club Associates, L.P., the
    record owner of such shares, and 49,920 are subject to voting and investment
    power by Mr. Cheatham as general partner of 435 Associates, Ltd., the record
    owner of such shares.
(5) Of the indicated shares, Mr. Cheatham owns 35,152 shares and 8,900 shares
    are owned by his children.
(6) Elizabeth M. Cheatham is the sole owner of EMC Investments Ltd. Partnership.
(7) Of the indicated shares, Mr. Cheatham owns 35,152 shares and 14,150 shares
    are owned by his children.
(8) Of the indicated shares, Ms. Von Stein owns 35,452 shares and 13,550 shares
    are owned by her children.
</TABLE>


                                       25
<PAGE>

STOCK OWNED BY MANAGEMENT

      The following table provides for each director of the Company, the named
executive officer, and for all directors and officers of the Company as a group,
as of March 22, 2001, the following information: (a) the name of the named
executive officer, director, or the number of persons in the group; (b) the
number of shares of Company Stock beneficially owned by the named executive
officer, director, or the group; and (c) the percentage such number represents
of the outstanding shares of Company Stock. Unless otherwise indicated, the
listed person is the record owner of, and has sole voting and investment powers
over, his shares.

                                        Number of Shares
Name and Address                       Beneficially Owned    Percentage of Total
----------------                       ------------------    -------------------

J. Henry Cheatham, III                      44,052 (1)              5.66%

C. A. Knowles                                  920                    *

James A. Mankin                                100 (2)                *

David G. Newton                             22,579 (3)              2.90%

James G. Cheatham                           49,302 (4)              6.33%

John T. Newton, Jr.                         13,624 (5)              1.68%

All directors and executive officers
as a group (9 persons)                     127,002                 16.10%
------------------------
*   Indicates less than one percent.

(1) Includes 8,900 shares held by Mr. Cheatham as custodian for his children.

(2) Does not include 294 shares held by his daughter for which Mr. Mankin
    disclaims beneficial ownership. Does not include 294 shares held in trust
    for his daughter and 4516 shares held in trust for his grandchildren for
    which Mr. Mankin is a Co-Trustee.

(3) Includes 7,571 shares are held by Mr. Newton as trustee for his niece and
    nephew.

(4) Includes 14,150 shares held by his children.

(5) Includes 5,760 shares held by Mr. Newton as trustee for his niece and
    nephew.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      The Company's directors and officers and certain companies and individuals
associated with them have been customers of, and have had banking transactions
with, the Bank and are expected to continue such relationships in the future.
Pursuant to such transactions, the Company's directors and officers from time to
time have borrowed funds from the Bank for various business and personal
reasons. In the opinion of the management of the Company, the extensions of
credit made by the Bank to its directors and officers since January 1, 2000 (a)
were made in the ordinary course of business, (b) were made on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons and (c) did not involve more
than a normal risk of collectibility or present other unfavorable features. See
Note 12 under Notes to Consolidated Financial Statements in Item 7 hereof.


                                       26
<PAGE>


ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:

      The Company submits herewith as exhibits to this report on Form 10-KSB the
exhibits required by Item 601 of Regulation S-B, subject to Rule 12b-32 under
the Securities Exchange Act of 1934.

Exhibit.
  No.          Document
  ---          --------

3.1      Articles of Incorporation of FNB Banking Company, as amended.
         (Incorporated by reference from Exhibit 3.1 to the Company's annual
         report on Form 10- KSB for the year ended December 31, 1992.)

3.2      Bylaws of FNB Banking Company, as amended. (Incorporated by reference
         from Exhibit 3.2 to the Company's annual report on Form 10-KSB for the
         year ended December 31, 1992.)

4.1      See Exhibits 3.1 and 3.2 for provisions of Articles of Incorporation
         and Bylaws, as amended, which define the rights of the holders of
         Common Stock of FNB Banking Company.

21.0     Subsidiaries of FNB Banking Company. (Incorporated by reference from
         Exhibit 21.0 to the Company's annual report on Form 10-KSB for the year
         ended December 31, 1999.)

24.0     A Power of Attorney is set forth on the signature pages to this Form
         10-KSB.


(b)  Reports on Form 8-K:

None.

                                       27
<PAGE>











                       FNB BANKING COMPANY AND SUBSIDIARY


                        CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998

                 (WITH INDEPENDENT ACCOUNTANTS' REPORT THEREON)



<PAGE>


                       FNB BANKING COMPANY AND SUBSIDIARY


                        CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2000, 1999 AND 1998


                                     INDEX
                                     -----


                                                                           PAGE
                                                                           ----

Independent Accountants' Report ........................................... F-1

Consolidated Balance Sheets as of
     December 31, 2000 and 1999 ........................................... F-2

Consolidated Statements of Earnings for the Years
     Ended December 31, 2000, 1999 and 1998 ............................... F-3

Consolidated Statements of Changes in Stockholders'
     Equity for the Years Ended December 31, 2000,
     1999 and 1998 ........................................................ F-4

Consolidated Statements of Comprehensive Income
     for the Years Ended December 31, 2000, 1998
     and 1998 ............................................................. F-5

Consolidated Statements of Cash Flows for the Years
     Ended December 31, 2000, 1999 and 1998 ....................... F-6 and F-7

Notes to Consolidated Financial Statements ........................ F-8 to F-21






                                      -i-

<PAGE>



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


To the Board of Directors and Stockholders
FNB Banking Company and Subsidiary


We have  audited the  accompanying  consolidated  balance  sheets of FNB Banking
Company  and  subsidiary  as of  December  31,  2000 and 1999,  and the  related
statements of earnings,  changes in stockholders'  equity,  comprehensive income
and cash flows for each of the three  years in the  period  ended  December  31,
2000.  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, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of FNB Banking Company
and  subsidiary  as of  December  31,  2000 and 1999,  and the  results of their
operations  and their cash flows for each of the three years in the period ended
December 31, 2000, in conformity with generally accepted accounting principles.







Atlanta, Georgia
January 19, 2001



                                      F-1
<PAGE>

                       FNB BANKING COMPANY AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 2000 AND 1999


<TABLE>
<CAPTION>
                                                                  2000          1999
                                                                  ----          ----
                                   Assets
                                   ------

<S>                                                          <C>              <C>
Cash and due from banks, including reserve requirements of
  $2,712,000 and $1,521,000                                  $  9,492,910     16,298,540
Federal funds sold                                              5,995,834      7,026,547
                                                             ------------   ------------
     Cash and cash equivalents                                 15,488,744     23,325,087

Interest-bearing deposits with other banks                        500,000        500,000
Investment securities available for sale                       37,380,658     31,180,375
Other investments                                                 848,200        721,600
Mortgage loans held for sale                                    1,087,041        693,979
Loans, net                                                    162,514,560    153,486,630
Premises and equipment, net                                     7,700,782      8,007,718
Accrued interest receivable and other assets                    2,144,405      1,795,534
                                                             ------------   ------------
                                                             $227,664,390    219,710,923
                                                             ============   ============

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

Deposits:
  Demand                                                     $ 30,064,548     29,276,860
  Interest-bearing demand                                      46,583,275     44,077,892
  Savings                                                      18,920,294     18,789,378
  Time                                                         92,733,695     85,641,717
                                                             ------------   ------------

     Total deposits                                           188,301,812    177,785,847

Securities sold under retail repurchase agreements             11,442,400      9,391,076
FHLB advances                                                   1,000,000      8,625,000
Note payable                                                      111,113        277,779
Accrued interest payable and accrued liabilities                1,595,706        785,833
                                                             ------------   ------------

     Total liabilities                                        202,451,031    196,865,535
                                                             ------------   ------------
Commitments
Stockholders' equity:
  Common stock, $1 par value; 5,000,000 shares authorized;
    779,154 and 788,924 shares issued and outstanding             779,154        788,924
  Retained earnings                                            23,893,439     22,129,812
  Accumulated other comprehensive income (loss)                   540,766        (73,348
                                                             ------------   ------------
     Total stockholders' equity                                25,213,359     22,845,388
                                                             ------------   ------------

                                                             $227,664,390    219,710,923
                                                             ============   ============
</TABLE>


See accompanying notes to consolidated financial statements.



                                      F-2
<PAGE>

                       FNB BANKING COMPANY AND SUBSIDIARY
                       CONSOLIDATED STATEMENTS OF EARNINGS
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<TABLE>
<CAPTION>
                                                                       2000             1999         1998
                                                                       ----             ----         ----
<S>                                                                <C>              <C>           <C>
Interest and dividend income:
  Interest and fees on loans                                       $ 17,098,182     15,481,198    15,703,957
  Interest on federal funds sold                                        256,297        421,559       327,739
  Interest-bearing deposits in other banks                               79,917         54,205        72,279
  Interest on investment securities:
    Tax-exempt                                                          448,255        411,914       357,792
    Taxable                                                           1,776,672      1,348,809     1,181,120
    Dividends on other investments                                      115,372        113,083        98,801
                                                                   ------------    -----------    ----------
         Total interest income                                       19,774,695     17,830,768    17,741,688
                                                                   ------------    -----------    ----------
Interest expense:
  Deposits                                                            6,594,320      6,092,923     6,120,443
  Note payable                                                           15,643         24,854        38,488
  Retail repurchase agreements and other                                803,702        373,971       235,907
                                                                   ------------    -----------    ----------
         Total interest expense                                       7,413,665      6,491,748     6,394,838
                                                                   ------------    -----------    ----------
         Net interest income                                         12,361,030     11,339,020    11,346,850
Provision for loan losses                                               733,618      1,460,332       530,075
                                                                   ------------    -----------    ----------
         Net interest income after provision for loan losses         11,627,412      9,878,688    10,816,775
                                                                   ------------    -----------    ----------
Other operating income:
  Service charges                                                     1,803,962      1,529,482     1,459,869
  Fees for trust services                                               242,500        120,000       195,000
  Securities gains (losses), net                                         (2,644)       (42,720)       11,535
  Other                                                                 590,634        680,652       678,875
                                                                   ------------    -----------    ----------

         Total other operating income                                 2,634,452      2,287,414     2,345,279
                                                                   ------------    -----------    ----------
Other operating expenses:
  Salaries and employee benefits                                      5,429,916      5,210,827     4,948,279
  Occupancy and equipment                                             1,668,697      1,633,812     1,546,527
  Miscellaneous                                                       2,385,253      2,266,995     2,281,255
                                                                   ------------    -----------    ----------

         Total other operating expenses                               9,483,866      9,111,634     8,776,061
                                                                   ------------    -----------    ----------

         Earnings before income taxes                                 4,777,998      3,054,468     4,385,993

Income taxes                                                          1,573,443        950,830     1,465,534
                                                                   ------------    -----------    ----------
         Net earnings                                              $  3,204,555      2,103,638     2,920,459
                                                                   ============    ===========    ==========

         Net earnings per share                                    $       4.07           2.64          3.62
                                                                   ============    ===========    ==========
</TABLE>



See accompanying notes to consolidated financial statements.



                                      F-3
<PAGE>

                       FNB BANKING COMPANY AND SUBSIDIARY

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<TABLE>
<CAPTION>
                                                                          Accumulated
                                                                             Other
                                            Common         Retained      Comprehensive
                                             Stock         Earnings      Income (Loss)     Total
                                             -----         --------      -------------     -----
<S>                                          <C>           <C>              <C>         <C>
Balance, December 31, 1997                   $ 807,800     19,842,089       729,683     21,379,572

Net earnings                                      --        2,920,459          --        2,920,459

Cash dividends declared of $1.25 per share        --       (1,009,750)         --       (1,009,750)
Change in accumulated other comprehensive
  income                                          --             --         267,849        267,849
                                             ---------    -----------    ----------    -----------

Balance, December 31, 1998                     807,800     21,752,798       997,532     23,558,130

Net earnings                                      --        2,103,638          --        2,103,638

Cash dividends declared of $1.25 per share        --         (990,459)         --         (990,459)

Shares repurchased and retired                 (18,876)      (736,165)         --         (755,041)

Change in accumulated other comprehensive
  income (loss)                                   --             --      (1,070,880)    (1,070,880)
                                             ---------    -----------    ----------    -----------

Balance, December 31, 1999                     788,924     22,129,812       (73,348)    22,845,388

Net earnings                                      --        3,204,555          --        3,204,555

Cash dividends declared of $1.35 per share        --       (1,059,898)         --       (1,059,898)

Shares repurchased and retired                  (9,770)      (381,030)         --         (390,800)

Change in accumulated other comprehensive
  income (loss)                                   --             --         614,114        614,114
                                             ---------    -----------    ----------    -----------

Balance, December 31, 2000                   $ 779,154     23,893,439       540,766     25,213,359
                                             =========    ===========    ==========    ===========
</TABLE>

See accompanying notes to consolidated financial statements.





                                      F-4
<PAGE>

                       FNB BANKING COMPANY AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<TABLE>
<CAPTION>
                                                                    2000         1999          1998
                                                                    ----         ----          ----
<S>                                                              <C>           <C>           <C>
Net earnings                                                     $3,204,555    2,103,638     2,920,459
                                                                 ----------   ----------    ----------

Other comprehensive income, net of tax:
 Unrealized gains (losses) on securities available for sale:
   Holding gains (losses) arising during period, net of tax
     of $375,386, $672,579 and $168,549                             612,475   (1,097,366)      275,000
   Reclassification adjustment for (gains) losses included
     in net earnings, net of tax of $1,005, $16,234 and $4,384        1,639       26,486        (7,151)
                                                                 ----------   ----------    ----------

   Total other comprehensive income (loss)                          614,114   (1,070,880)      267,849
                                                                 ----------   ----------    ----------

   Comprehensive income                                          $3,818,669    1,032,758     3,188,308
                                                                 ==========   ==========    ==========
</TABLE>









See accompanying notes to consolidated financial statements.



                                      F-5
<PAGE>



                       FNB BANKING COMPANY AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<TABLE>
<CAPTION>
                                                                              2000           1999            1998
                                                                              ----           ----            ----

<S>                                                                       <C>               <C>            <C>
Cash flows from operating activities:
  Net earnings                                                            $  3,204,555      2,103,638      2,920,459
    Adjustments to reconcile net earnings
      to net cash provided by operating activities:
        Depreciation, amortization and accretion                               573,406        637,710        556,408
        Provision for loan losses                                              733,618      1,460,332        530,075
        Provision for deferred income taxes                                    242,554       (230,552)       191,748
        Provision for writedown of investment security                            --           40,000           --
        (Gains) losses on sales of investment securities                         2,644          2,720        (11,535)
        Losses on disposals of premises and equipment                            2,746           --           35,073
        Gain on sale of other real estate and repossessed collateral              --          (87,596)          --
        Change in:
         Mortgage loans held for sale                                         (393,062)     1,855,446     (1,899,075)
         Interest receivable                                                  (204,543)      (116,235)       (45,116)
         Interest payable                                                      174,192        (28,806)       (11,006)
         Other, net                                                           (163,527)        88,233       (421,329)
                                                                          ------------    -----------    -----------

           Net cash provided by operating activities                         4,172,583      5,724,890      1,845,702
                                                                          ------------    -----------    -----------

Cash flows from investing activities:
  Proceeds from sales of investment securities available for sale              509,437        620,974      1,942,216
  Proceeds from calls and maturities of investment securities held to
     Maturity                                                                     --          483,671      2,328,080
  Proceeds from calls and maturities of investment securities available
     for sale                                                                2,679,628      7,348,800      4,599,952
  Purchase of investment securities available for sale                      (8,377,451)   (12,764,523)   (15,030,084)
  Purchase of other investments                                               (126,600)          --             --
  Proceeds from calls of other investments                                        --          104,100           --
  Net change in loans                                                       (9,761,548)    (7,986,794)    (9,096,458)
  Proceeds from disposals of premises and equipment                              8,300         14,815         10,123
  Additions to premises and equipment                                         (301,549)      (377,708)    (1,954,813)
  Proceeds from sales of other real estate and repossessed collateral             --             --          141,325
                                                                          ------------    -----------    -----------

           Net cash used by investing activities                          $(15,369,783)   (12,556,665)   (17,059,659)
                                                                          ------------    -----------    -----------
</TABLE>




See accompanying notes to consolidated financial statements.



                                      F-6
<PAGE>

                       FNB BANKING COMPANY AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<TABLE>
<CAPTION>
                                                                              2000             1999           1998
                                                                              ----             ----           ----
<S>                                                                    <C>                  <C>               <C>
  Cash flows from financing activities:
    Net change in demand and savings deposits                          $   3,423,987        7,587,090         648,306
    Net change in time deposits                                            7,091,978          596,137       4,578,246
    Net change in securities sold under retail repurchase agreements       2,051,324        4,449,295       1,600,281
    Proceeds from FHLB advances                                           32,125,000        7,500,000       1,250,000
    Repayments of FHLB advances                                          (39,750,000)      (1,267,857)       (285,714)
    Repayments of note payable                                              (166,666)        (166,667)       (166,666)
    Payment of cash dividends                                             (1,023,966)      (1,002,729)       (969,360)
    Repurchase and retirement of common stock                               (390,800)        (755,041)            --
                                                                          ----------       ----------      ----------

       Net cash provided by financing activities                           3,360,857       16,940,228       6,655,093
                                                                          ----------       ----------      ----------

  Net change in cash and cash equivalents                                 (7,836,343)      10,108,453      (8,558,864)

  Cash and cash equivalents at beginning of year                          23,325,087       13,216,634      21,775,498
                                                                          ----------       ----------      ----------

  Cash and cash equivalents at end of year                             $  15,488,744       23,325,087      13,216,634
                                                                          ==========       ==========      ==========

  Supplemental disclosures of cash flow information:
    Cash paid during the year for:
     Interest                                                          $   7,239,473        6,520,554       6,405,844
     Income taxes                                                      $   1,518,000          993,000       1,488,000

  Noncash investing and financing activities:
    Transfer of investment securities held to maturity
       to available for sale                                           $        --          6,595,694             --
    Change in net unrealized gains/losses on
      investment securities available for sale,
      net of tax                                                       $     614,114       (1,070,880)        267,849
    Transfers of loans to other real estate                            $        --            236,583         208,372
    Financed sales of other real estate                                $        --            332,552          33,983
    Change in dividends payable                                        $      35,932          (12,270)         40,390
</TABLE>







See accompanying notes to consolidated financial statements.


                                      F-7
<PAGE>

                       FNB BANKING COMPANY AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      The  accounting  and  reporting  policies  of  FNB  Banking  Company  (the
      "Company") and subsidiary,  and the methods of applying those  principles,
      conform with generally accepted  accounting  principles  ("GAAP") and with
      general practice within the banking  industry.  The following is a summary
      of the significant policies and procedures.

      Basis of Presentation
      ---------------------
      The consolidated  financial statements include the accounts of the Company
      and its wholly  owned  subsidiary,  First  National  Bank of Griffin  (the
      "Bank"). All significant  intercompany accounts and transactions have been
      eliminated in consolidation.

      The Bank  commenced  business in 1933 upon receipt of its charter from the
      Georgia  Department  of  Banking  and  Finance.  This  state  charter  was
      converted to a national  charter in 1965. The Bank is primarily  regulated
      by the Office of the  Comptroller of the Currency  ("OCC") and the Company
      is  regulated  by the  Federal  Reserve  Bank  and both  undergo  periodic
      examinations  by these  regulatory  authorities.  The Bank provides a full
      range  of  customary  banking  services   throughout  Spalding  and  other
      surrounding counties in Georgia.

      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  these  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,  the  valuation  of real  estate  acquired in
      connection  with  or in  lieu  of  foreclosure  on  loans,  and  valuation
      allowances  associated  with the  realization of deferred tax assets which
      are based on future taxable income.

      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 the purpose of selling them in the near term. Held to
      maturity  securities  are those  securities  for which the Company has the
      ability  and  intent  to hold  the  security  until  maturity.  All  other
      securities  not included in trading or held to maturity are  classified as
      available  for sale.  At  December  31,  2000 and 1999 the  Company had no
      trading or held to maturity securities.

      Available for sale securities are recorded at fair value. Held to maturity
      securities  are  recorded  at  cost,  adjusted  for  the  amortization  or
      accretion of premiums or discounts.  Unrealized  holding gains and losses,
      net of the  related  tax  effect,  on  securities  available  for sale are
      excluded  from  earnings  and are  reported  as a  separate  component  of
      stockholders'  equity  until  realized.  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
      stockholders'  equity.  The unrealized holding gains or losses included in
      the separate component of stockholders' equity for securities  transferred
      from  available for sale to held to maturity are  maintained and amortized
      into earnings over the remaining  life of the security as an adjustment to
      yield in a manner consistent with the amortization or accretion of premium
      or discount on the associated security.

      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.

      Other Investments
      -----------------
      Other investments  include equity securities with no readily  determinable
      fair value. These investment securities are carried at cost.




                                      F-8
<PAGE>

                       FNB BANKING COMPANY AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
      Mortgage Loans Held for Sale
      ----------------------------
      Mortgage loans held for sale are carried at the lower of aggregate cost or
      market value.  The amount by which cost exceeds  market value is accounted
      for as a  valuation  allowance.  Changes in the  valuation  allowance  are
      included in the  determination  of net earnings of the period in which the
      change occurs.

      Loans, Loan Fees and Interest Income
      ------------------------------------
      Loans are stated at principal amount outstanding, net of the allowance for
      loan losses. Interest on loans is calculated by using the simple interest
      method on daily balances of the principal amount outstanding.

      Accrual of interest is discontinued  on a loan when  management  believes,
      after considering economic and business conditions and collection efforts,
      that  the  borrower's  financial  condition  is such  that  collection  of
      interest  is  doubtful.  When a  loan  is  placed  on  nonaccrual  status,
      previously accrued and uncollected  interest is charged to interest income
      on  loans.  Generally,   payments  on  nonaccrual  loans  are  applied  to
      principal.

      Loan fees, net of certain  origination  costs,  have been deferred and are
      being amortized over the lives of the respective loans.

      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  collectibility  of the
      principal  is unlikely.  The  allowance  represents  an amount  which,  in
      management's  judgment,  will be  adequate  to absorb  probable  losses on
      existing loans that may become uncollectible.

      Management's  judgment in  determining  the  adequacy of the  allowance is
      based on evaluations of the  collectibility  of loans.  These  evaluations
      take into  consideration  such factors as changes in the nature and volume
      of the loan  portfolio,  current  economic  conditions that may affect the
      borrower's  ability  to pay,  overall  portfolio  quality,  and  review of
      specific  problem loans.  In determining the adequacy of the allowance for
      loan losses, management uses a loan grading system that rates loans in six
      different  categories.  Grades four though six are assigned allocations of
      loss based on  management's  estimate of potential loss which is generally
      based on  discounted,  collateral  deficiencies.  Loans graded one through
      three are stratified by type and allocated loss ranges based on historical
      loss  experience  for the strata.  The  combination  of these  results are
      compared  quarterly to the recorded allowance for loan losses and material
      differences  are adjusted by increasing  or  decreasing  the provision for
      loan  losses.  Management  uses a devoted  internal  loan  reviewer who is
      independent of the lending  function to challenge and corroborate the loan
      grading system and provide additional analysis in determining the adequacy
      of the allowance for loan losses and the future  provisions  for estimated
      loan losses.

      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,  regulators,  as  an  integral  part  of  their
      examination  process,  periodically  review the Bank's  allowance for loan
      losses. Such regulators may require the Bank to recognize additions to the
      allowance based on their judgments of information available to them at the
      time of their examination.

      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.  A loan is 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.



                                      F-9
<PAGE>

                       FNB BANKING COMPANY AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
      Premises and Equipment
      ----------------------
      Premises and equipment are stated at cost less  accumulated  depreciation.
      Depreciation is computed using the straight-line method over the estimated
      useful lives of the assets. 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 income  for the  period.
      Costs incurred for  maintenance  and repairs are expensed  currently.  The
      range of estimated useful lives for premises and equipment are:

                  Buildings and improvements                 10 - 40 Years
                  Furniture and equipment                     3 - 10 Years

      Securities Sold Under Retail Repurchase  Agreements  Securities sold under
      repurchase  agreements 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.

      Income Taxes
      ------------
      The  Company  accounts  for income  taxes using the  liability  method and
      recognizes  deferred  tax  assets  and  liabilities  for  the  future  tax
      consequences  attributable to differences  between the financial statement
      carrying  amounts of existing assets and liabilities and their  respective
      tax basis.  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   results  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.

      Net Earnings Per Common Share
      -----------------------------
      Basic net  earnings  per common  share are based on the  weighted  average
      number of common shares outstanding during the period while the effects of
      potential  common  shares  outstanding  during the period such as options,
      convertible  securities and warrants are included in diluted  earnings per
      share.  The Company has no potential  common  shares and  correspondingly,
      earnings  per share  amounts for 2000,  1999 and 1998,  respectively,  are
      based on 786,451,  796,074 and 807,800 shares, the weighted average number
      of common shares outstanding.

      Other
      -----
      Property  (other than cash  deposits)  held by the Bank in a fiduciary  or
      agency  capacity for customers is not included in the balance sheets since
      such items are not assets of the Bank.

      Comprehensive Income
      --------------------
      The  Company  has  elected to present  comprehensive  income in a separate
      consolidated   statement  of  comprehensive   income.   Accumulated  other
      comprehensive  income  is  solely  related  to the  net of tax  effect  of
      unrealized gains (losses) on securities available for sale.



                                      F-10
<PAGE>

                       FNB BANKING COMPANY AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
      Recent Accounting Pronouncements
      --------------------------------
      In 1998,  the Financial  Accounting  Standards  Board issued  Statement of
      Financial Accounting  Standards No. 133 ("SFAS No. 133"),  "ACCOUNTING FOR
      DERIVATIVE  INSTRUMENTS AND HEDGING  ACTIVITIES." SFAS No. 133 establishes
      accounting  and  reporting  standards  for  hedging  derivatives  and  for
      derivative  instruments including derivative instruments embedded in other
      contracts. It requires the fair value recognition of derivatives as assets
      or  liabilities  in the  financial  statements.  At the  date  of  initial
      application, an entity may transfer any held to maturity security into the
      available for sale or trading categories without calling into question the
      entity's  intent to hold other  securities  to maturity in the future.  In
      1999 the Bank  transferred all held to maturity  investment  securities to
      available  for sale  under this  provision  of SFAS No.  133.  The held to
      maturity  securities  had amortized  cost of $6,600,000 and net unrealized
      gains of $6,100. The result of the transfer was to increase  stockholders'
      equity by $4,000 which represented the net of tax effect of the unrealized
      gains associated with the held to maturity investments  transfered.  There
      were no other material impacts due to the adoption of SFAS No. 133.

(2)   INVESTMENT SECURITIES
      Investment securities available for sale at December 31, 2000 and 1999 are
      as follows:

<TABLE>
<CAPTION>
                                                                  December 31, 2000
                                                                  -----------------
                                                                Gross           Gross         Estimated
                                               Amortized     Unrealized      Unrealized         Fair
                                                 Cost           Gains          Losses           Value
                                                 ----           -----          ------           -----
<S>                                       <C>                 <C>              <C>            <C>
       U.S. Government agencies           $  15,456,589          45,401         99,109        15,402,881
       State, county and municipal            9,296,071         172,365         60,983         9,407,453
       Mortgage-backed securities            11,229,785         127,441         51,039        11,306,187
       Equity securities                        526,010         738,127            --          1,264,137
                                             ----------       ---------     ----------        ----------
              Total                       $  36,508,455       1,083,334        211,131        37,380,658
                                             ==========       =========     ==========        ==========


                                                                  December 31, 1999
                                                                  -----------------
                                                                Gross           Gross         Estimated
                                               Amortized     Unrealized      Unrealized         Fair
                                                 Cost           Gains          Losses           Value
                                                 ----           -----          ------           -----

       U.S. Government agencies           $  13,986,476             155        642,096        13,344,535
       State, county and municipal            8,432,365         136,673        236,356         8,332,682
       Mortgage-backed securities             8,353,829           6,704        224,082         8,136,451
       Equity securities                        526,010         840,697            --          1,366,707
                                             ----------       ---------      ----------       ----------
              Total                       $  31,298,680         984,229      1,102,534        31,180,375
                                             ==========       =========      =========        ==========
</TABLE>



                                      F-11
<PAGE>


                       FNB BANKING COMPANY AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(2)   INVESTMENT SECURITIES, CONTINUED
      The amortized cost and fair value of investment  securities  available for
      sale at December  31,  2000,  by  contractual  maturity,  are shown below.
      Expected  maturities  will  differ  from  contractual  maturities  because
      borrowers  have the right to call or prepay  obligations  with or  without
      call or prepayment penalties.

<TABLE>
<CAPTION>
                                                      Amortized           Estimated
                                                        Cost             Fair Value
<S>                                                <C>                   <C>
         U.S. Government agencies:
              Within 1 year                        $   2,000,000          1,983,800
              1 to 5 years                            11,482,445         11,428,591
              5 to 10 years                            1,974,144          1,990,490
                                                      ----------         ----------

                                                   $  15,456,589         15,402,881
                                                      ==========         ==========

         State, county and municipal:
              Within 1 year                        $     500,000            500,923
              1 to 5 years                             3,636,141          3,734,969
              5 to 10 years                            3,237,512          3,237,347
              More than 10 years                       1,922,418          1,934,214
                                                      ----------         ----------

                                                   $   9,296,071          9,407,453
                                                      ==========         ==========
         Total securities other than mortgage-
           backed  ecurities:
              Within 1 year                        $   2,500,000          2,484,723
              1 to 5 years                            15,118,586         15,163,560
              5 to 10 years                            5,211,656          5,227,837
              More than 10 years                       1,922,418          1,934,214

         Mortgage-backed securities                   11,229,785         11,306,187

         Equity securities                               526,010          1,264,137
                                                      ----------         ----------
                                                   $  36,508,455         37,380,658
                                                      ==========         ==========
</TABLE>

      Proceeds from sales of securities available for sale during 2000, 1999 and
      1998 were $509,437, $620,974 and $1,942,216, respectively. Gross losses of
      $2,644,  $2,720 and $15,227 for 2000,  1999 and 1998,  respectively,  were
      realized on those sales.  In 1998,  $26,762 of call premiums were received
      on three called securities and these are included as securities gains.

      Certain  investment  securities  were  written  down  to  their  estimated
      realizable  values because,  in the opinion of management,  the decline in
      value was  considered  other than  temporary.  In late 1999 an  investment
      security  was  considered  in default and written  down  $40,000  which is
      included in securities losses in the statement of earnings.

      Securities  with  a  carrying  value  of  approximately   $26,688,000  and
      $23,186,000 at December 31, 2000 and 1999,  respectively,  were pledged to
      secure public deposits and for other purposes.



                                      F-12
<PAGE>


                       FNB BANKING COMPANY AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(3)   LOANS
      Major classifications of loans at December 31, 2000 and 1999 are
      summarized as follows:

                                                         2000         1999
                                                         ----         ----

Commercial, financial and agricultural              $ 87,884,217    76,376,867
Real estate - construction                             8,358,119     8,788,603
Real estate - mortgage                                40,468,650    42,188,877
Consumer                                              28,315,243    29,041,549
                                                    ------------   -----------
         Total loans                                 165,026,229   156,395,896

         Less:  Allowance for loan losses              2,137,165     2,588,697
                Unearned interest and fees               374,504       320,569
                                                    ------------   -----------
                Net loans                           $162,514,560   153,486,630
                                                    ============   ===========

      The Bank  grants  loans and  extensions  of credit  to  individuals  and a
      variety of firms and  corporations  located in its trade  area,  primarily
      Spalding County, Georgia and surrounding counties. Although the Bank has a
      diversified loan portfolio, a substantial portion of the loan portfolio is
      collateralized  by improved  and  unimproved  real estate and is dependent
      upon the real estate market in this geographical area.

      Changes in the allowance for loan losses are summarized as follows:

<TABLE>
<CAPTION>
                                                  2000          1999          1998
                                                  ----          ----          ----

<S>                                            <C>             <C>           <C>
Balance at beginning of year                   $ 2,588,697     1,707,913     2,012,795
Amounts charged off                             (1,436,467)     (839,010)   (1,031,039)
Recoveries on amounts previously charged off       251,317       259,462       196,082
Provision charged to operating expenses            733,618     1,460,332       530,075
                                               -----------    ----------    ----------
Balance at end of year                         $ 2,137,165     2,588,697     1,707,913
                                               ===========    ==========    ==========
</TABLE>

      The  Bank was  servicing  approximately  $13,198,000  and  $15,760,000  of
      mortgage loans for the Federal Home Loan Mortgage  Corporation at December
      31, 2000 and 1999, respectively.

      At  December  31,  2000,  the  recorded  investment  in  loans  that  were
      considered to be impaired was $6.7 million.  Included in the allowance for
      loan losses are specific  reserves for these  impaired loans totaling $1.1
      million.  As of December 31, 2000,  there were no impaired  loans that did
      not have a specific  reserve and all loans  considered to be impaired were
      non-accrual  loans. The average recorded  investment in impaired loans for
      the year ended  December 31, 2000,  was  approximately  $1.4 million.  The
      amount of  interest  that would have been  recognized  under the  original
      terms on the non-accrual loans was approximately $75,000. The Bank did not
      recognize any interest  income on impaired loans during 2000. The Bank had
      no material amounts of impaired loans during 1999 or 1998.


                                      F-13
<PAGE>



                       FNB BANKING COMPANY AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(4)   PREMISES AND EQUIPMENT
      Premises and  equipment at December 31, 2000 and 1999,  are  summarized as
      follows:

                                                       2000            1999
                                                       ----            ----

         Land and improvements                   $   1,385,125      1,385,125
         Buildings and improvements                  7,377,489      7,377,489
         Furniture and equipment                     4,199,471      3,995,361
                                                   -----------    -----------
                                                    12,962,085     12,757,975
         Less accumulated depreciation               5,261,303      4,750,257
                                                   -----------    -----------
                                                 $   7,700,782      8,007,718
                                                   ===========    ===========

      Depreciation  expense was  $597,439,  $626,726  and $504,747 for the years
      ended December 31, 2000, 1999 and 1998, respectively.

(5)   DEPOSITS
      The aggregate amount of time deposit accounts with a minimum  denomination
      of $100,000 was approximately  $26,418,000 and $24,482,000 at December 31,
      2000  and  1999,  respectively.  Deposits  from  related  parties  totaled
      approximately  $4,449,000  and  $3,552,000  at December 31, 2000 and 1999,
      respectively.

      At December 31, 2000,  the  scheduled  maturities of time deposits were as
      follows:

                  2001                              $  71,828,643
                  2002                                 11,260,950
                  2003                                  5,677,065
                  2004                                  2,571,327
                  2005                                  1,395,710
                                                      -----------
                                                    $  92,733,695

(6)   NOTE PAYABLE
      Note payable at December 31, 2000 and 1999, consisted of the following:

<TABLE>
<CAPTION>
                                                                      2000         1999
                                                                      ----         ----
<S>                                                                <C>           <C>
        Note payable, due in monthly installments of $13,889
           plus interest at 70% of the prime interest rate
           through August 1, 2001, collateralized by certain
           land and buildings.                                     $  111,113    277,779
</TABLE>


(7)   FEDERAL HOME LOAN BANK ADVANCES

      The Bank has an agreement with the Federal Home Loan Bank ("FHLB") whereby
      the FHLB agreed to provide the Bank credit  facilities under the Agreement
      for Advances and Security Agreement.  Any amounts advanced by the FHLB are
      collateralized  under a Blanket  Floating  Lien covering all of the Bank's
      1-4 family first mortgage  loans.  The Bank may draw advances up to 75% of
      the  outstanding  balance of these loans based on the  agreement  with the
      FHLB.

      At December 31, 2000, the Bank has an advance payable of $1,000,000 with a
      fixed  interest  rate of 5.50% and  interest  payable  monthly  with equal
      principal payments of $31,250 due quarterly until maturity in 2008.




                                      F-14
<PAGE>



                       FNB BANKING COMPANY AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(8)   EMPLOYEE BENEFIT PLAN
      The  Company  has  a  profit  sharing  plan  covering   substantially  all
      employees, subject to minimum service requirements. The plan complies with
      the  requirements  of Section  401(k) of the Internal  Revenue  Code.  The
      Company will match up to 6% of the participants' before tax contributions.
      The Company's matching  contributions  amounted to $326,000,  $307,000 and
      $297,000 in 2000, 1999 and 1998, respectively.

(9)   COMMITMENTS
      The Bank is a party to financial instruments with  off-balance-sheet  risk
      in the  normal  course  of  business  to meet the  financing  needs of its
      customers.  These  financial  instruments  include  commitments  to extend
      credit,  standby  letters  of  credit  and  financial  guarantees.   Those
      instruments involve, to varying degrees, elements of credit risk in excess
      of the amount  recognized in the balance  sheet.  The contract  amounts of
      those  instruments  reflect  the  extent  of  involvement  the Bank has in
      particular classes of financial instruments.

      The Bank's exposure to credit loss in the event of  nonperformance  by the
      other party for  commitments to extend credit,  standby  letters of credit
      and financial  guarantees written is represented by the contractual amount
      of those  instruments.  The Bank uses the same  credit  policies in making
      commitments  and conditional  obligations as it does for  on-balance-sheet
      instruments.

      In some cases,  the Company does require  collateral or other  security to
      support financial instruments with credit risk.

<TABLE>
<CAPTION>
                                                                                          Approximate
                                                                                          Contractual
                                                                                            Amount
                                                                                            ------
                                                                                     2000            1999
                                                                                     ----            ----
<S>                                                                            <C>               <C>
         Financial instruments whose contract amounts represent credit
          risk:
             Commitments to extend credit                                      $ 47,157,000      28,152,000
             Standby letters of credit and financial guarantees written        $    837,000         953,000
</TABLE>

      Commitments  to extend credit are agreements to lend to a customer as long
      as there is no violation of any  condition  established  in the  contract.
      Commitments  generally have fixed  expiration  dates or other  termination
      clauses and may require  payment of a fee.  Since many of the  commitments
      may expire without being drawn upon, the total  commitment  amounts do not
      necessarily  represent future cash  requirements.  The Bank evaluates each
      customer's  credit  worthiness  on a  case-by-case  basis.  The  amount of
      collateral  obtained,  if deemed  necessary by the Bank, upon extension of
      credit is based on management's credit evaluation.  Collateral held varies
      but may include  unimproved  and  improved  real estate,  certificates  of
      deposit, or personal property.

      Standby letters of credit and financial guarantees written are conditional
      commitments  issued by the Bank to guarantee the performance of a customer
      to a third party. The credit risk involved in issuing letters of credit is
      essentially  the same as that  involved in extending  loan  facilities  to
      customers.   Letters  of  credit  at   December   31,   2000,   are  fully
      collateralized.

(10)  DIVIDEND LIMITATIONS

      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.  The amount of
      dividends the Bank may pay in 2001 without prior approval is approximately
      $2,675,000 plus 2001 earnings of the Bank.





                                      F-15
<PAGE>



                       FNB BANKING COMPANY AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(11)  INCOME TAXES

      The  components  of income  tax  expense  (benefit)  for the  years  ended
      December 31, 2000, 1999 and 1998 are as follows:

                                          2000          1999         1998
                                          ----          ----         ----

                  Current           $  1,330,889     1,181,382    1,273,786
                  Deferred               242,554      (230,552)     191,748
                                       ---------     ---------    ---------
                                    $  1,573,443       950,830    1,465,534
                                       =========     =========    =========

      The  differences  between the  provision  for income  taxes and the amount
      computed by applying  the  statutory  federal  income tax rate to earnings
      before taxes are as follows:

                                        2000          1999          1998
                                        ----          ----          ----

Pretax income at statutory rates    $ 1,624,519      1,038,519    1,491,238
Add (deduct):
  Tax-exempt interest income           (151,185)      (140,051)    (130,297)
  Nondeductible interest expense         20,179         16,104       14,539
  State income taxes and other           79,930         36,258       90,054
                                    -----------     ----------   ----------
                                    $ 1,573,443        950,830    1,465,534
                                    ===========     ==========   ==========

      The  following  summarizes  the sources and expected tax  consequences  of
      future  taxable  deductions  (income)  which comprise the net deferred tax
      asset (liability).

<TABLE>
<CAPTION>
                                                                      2000         1999
                                                                      ----         ----
<S>                                                              <C>             <C>
        Deferred income tax assets:
          Allowance for loan losses                             $    610,957      827,474
          Net unrealized losses on investment securities                   -       44,955
          Other                                                       49,232       15,165
                                                                  ----------      -------
                 Total gross deferred income tax assets              660,189      887,594
                                                                  ----------      -------

        Deferred income tax liabilities:
          Net unrealized gains on investment securities             (331,436)           -
          Premises and equipment                                    (716,226)    (656,122)
                                                                  ----------      -------
                 Total gross deferred income tax liabilities      (1,047,662)    (656,122)
                                                                   ---------      -------
        Net deferred income tax asset (liability)               $   (387,473)     231,472
                                                                  ==========      =======
</TABLE>


<
                                      F-16
<PAGE>

                       FNB BANKING COMPANY AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(12)  RELATED PARTY TRANSACTIONS

      The  Company  conducts  transactions  with  its  directors  and  officers,
      including companies in which they have beneficial interest,  in the normal
      course of business. It is the policy of the Company that loan transactions
      with  directors  and officers be made on  substantially  the same terms as
      those  prevailing at the time for comparable  loans to other persons.  The
      following is a summary of activity for related party loans for 2000:

                    Beginning balance                          $ 8,541,664
                    Loans advanced                               2,559,419
                    Repayments                                  (2,369,709)
                                                                 ---------
                    Ending balance                             $ 8,731,374
                                                                 =========

(13)  MISCELLANEOUS OPERATING EXPENSES
      Components  of other  operating  expenses  which  are  greater  than 1% of
      interest income and other operating income are as follows:

                                                   2000       1999       1998
                                                   ----       ----       ----

                  Stationery and supplies       $ 221,094   244,249    250,151
                  Data processing               $ 268,401   236,970    284,322


(14)  FAIR VALUE OF FINANCIAL INSTRUMENTS
      The assumptions  used in the estimation of the fair value of the Company's
      financial  instruments  are detailed  below.  Where quoted  prices are not
      available,  fair values are based on estimates using discounted cash flows
      and other  valuation  techniques.  The use of discounted cash flows can be
      significantly  affected by the  assumptions  used,  including the discount
      rate and estimates of future cash flows. The following  disclosures should
      not be considered a surrogate of the liquidation value of the Company, but
      rather a  good-faith  estimate  of the  increase  or  decrease in value of
      financial  instruments held by the Company since purchase,  origination or
      issuance.

         Cash and Cash Equivalents
         -------------------------
         For cash, due from banks and federal funds sold, the carrying amount is
         a reasonable estimate of fair value.

         Interest-bearing Deposits with Other Banks
         ------------------------------------------
         The carrying value of  interest-bearing deposits with  other banks is a
         reasonable estimate of fair value.

         Investment Securities
         ---------------------
         Fair  values  for  investment  securities  are based  on quoted  market
         prices.

         Other Investments
         -----------------
         The carrying value of other investments approximates fair value.

         Loans and Mortgage Loans Held for Sale
         --------------------------------------
         The fair  value of  fixed rate  loans is  estimated  by discounting the
         future  cash flows using the current rates at which similar loans would
         be  made to  borrowers with  similar credit ratings.  For variable rate
         loans, the carrying amount is a reasonable estimate of fair value.

         Deposits
         --------
         The fair value of demand deposits,  savings  accounts, NOW accounts and
         money market deposits is the amount payable on demand a t the reporting
         date.  The fair value  of  fixed  maturity  certificates of  deposit is
         estimated  by discounting the future cash  flows using current rates at
         which comparable certificates would be issued.

         Securities Sold Under Retail Repurchase Agreements
         --------------------------------------------------
         The   carrying  value   of  securities  sold  under  retail repurchase
         agreements approximates fair value.


                                      F-17
<PAGE>


                       FNB BANKING COMPANY AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(14)  FAIR VALUE OF FINANCIAL INSTRUMENTS, CONTINUED

      FHLB Advances
      -------------
      The fair value of the FHLB  fixed  rate  borrowings  are  estimated  using
      discounted cash flows,  based on the current  incremental  borrowing rates
      for similar types of borrowing arrangements.

      Note Payable
      ------------

      The  Company's  note payable bears  interest  based on a percentage of the
      prime rate and as such, the carrying amount approximates the fair value.

      Commitments  to Extend  Credit  and  Standby  Letters  of  Credit  Because
      commitments to extend credit and standby  letters of credit are made using
      variable  rates,  or were  recently  executed,  the  contract  value  is a
      reasonable estimate of fair value.

      Limitations
      -----------
      Fair  value  estimates  are made at a  specific  point  in time,  based on
      relevant  market   information   and   information   about  the  financial
      instrument.  These  estimates do not reflect any premium or discount  that
      could  result  from  offering  for sale at one time the  Company's  entire
      holdings of a particular  financial  instrument.  Because no market exists
      for a significant  portion of the Company's  financial  instruments,  fair
      value  estimates  are  based  on  many  judgments.   These  estimates  are
      subjective in nature and involve  uncertainties and matters of significant
      judgment and therefore  cannot be determined  with  precision.  Changes in
      assumptions could significantly affect the estimates.

      Fair  value  estimates  are  based on  existing  on and  off-balance-sheet
      financial   instruments  without  attempting  to  estimate  the  value  of
      anticipated  future business and the value of assets and liabilities  that
      are  not  considered   financial   instruments.   Significant  assets  and
      liabilities  that are not  considered  financial  instruments  include the
      mortgage  banking  operation,  deferred  income  taxes  and  premises  and
      equipment.  In addition,  the tax ramifications related to the realization
      of the unrealized  gains and losses can have a significant  effect on fair
      value estimates and have not been considered in the estimates.

       The carrying amount and estimated fair values of the Company's financial
       instruments at December 31, 2000 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                                     2000                                   1999
                                                                     ----                                   ----
                                                       Carrying             Estimated           Carrying         Estimated
                                                        Amount             Fair Value            Amount          Fair Value
                                                        ------             ----------            ------          ----------
<S>                                                 <C>                  <C>                  <C>              <C>
       Assets:
         Cash and cash equivalents                 $  15,488,744          15,488,744           23,325,087       23,325,087
         Interest-bearing deposits with
           other banks                             $     500,000             500,000              500,000          500,000
         Investment securities                     $  37,380,658          37,380,658           31,180,375       31,180,375
         Other investments                         $     848,200             848,200              721,600          721,600
         Loans and mortgage loans held
           for sale                                 $163,601,601         161,309,437          154,180,609      154,772,825

       Liabilities:
         Deposits                                   $188,301,812         188,498,664          177,785,847      178,193,631
         Securities sold under retail repurchase
           agreements                              $  11,442,400          11,442,400            9,391,076        9,391,076
         FHLB advances                             $   1,000,000             928,151            8,625,000        8,566,515
         Note payable                              $     111,113             111,113              277,779          277,779

       Unrecognized financial instruments:
         Commitments to extend credit              $  47,157,000          47,157,000           28,152,000       28,152,000
         Standby letters of credit                 $     837,000             837,000              953,000          953,000
</TABLE>



                                      F-18
<PAGE>

                       FNB BANKING COMPANY AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(15)  REGULATORY MATTERS
      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 action by regulators that, if undertaken,  could
      have a direct material effect on the Company's financial statements. Under
      capital  adequacy  guidelines  and the  regulatory  framework  for  prompt
      corrective  action,  the Company and the Bank must meet  specific  capital
      guidelines that involve quantitative  measures of assets,  liabilities and
      certain  off-balance-sheet items as calculated under regulatory accounting
      practices.  The capital  amounts and  classifications  are also subject to
      qualitative judgments by the regulators about components,  risk weightings
      and other factors.

      Quantitative measures established by regulation to ensure capital adequacy
      require the Company  and the Bank to maintain  minimum  amounts and ratios
      (set forth in the table below) of total and Tier I capital (as defined) to
      risk-weighted  assets (as  defined)  and of Tier I capital (as defined) to
      average assets (as defined). Management believes, as of December 31, 2000,
      the Company and the Bank meets all capital adequacy  requirements to which
      they are subject.

      As of December 31, 2000 and 1999,  the most recent  notification  from the
      OCC  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.  There
      are no  conditions  or events  since  that  notification  that  management
      believes have changed the Bank's category.

      The consolidated and bank only actual capital amounts and ratios for 2000
      and 1999 are also presented in the table.

<TABLE>
<CAPTION>
                                                                                                               To Be Well
                                                                                                            Capitalized Under
                                                                                      For Capital           Prompt Corrective
                                                                                  Adequacy Purposes         Action Provisions
                                                          Actual
                                                   Amount         Ratio         Amount         Ratio        Amount        Ratio
                                                   ------         -----         ------         -----        ------        -----
<S>                                          <C>                <C>          <C>              <C>        <C>            <C>
AS OF DECEMBER 31, 2000
 Total Risk-Based Capital (to Risk-
 Weighted Assets):
   Consolidated                              $   26,809,758     14.95%       14,346,362       8.00%          N/A           N/A
   Bank                                      $   26,537,141     14.78%       14,361,123       8.00%      17,951,404     10.00%
Tier I Capital (to Risk-Weighted Assets):
   Consolidated                              $   24,672,593     13.76%        7,173,181       4.00%             N/A        N/A
   Bank                                      $   24,399,976     13.59%        7,180,562       4.00%      10,770,842       6.00%
Tier I Capital (to Average Assets):
   Consolidated                              $   24,672,593     11.03%        8,946,987       4.00%             N/A        N/A
   Bank                                      $   24,399,976     10.97%        8,896,337       4.00%      11,120,421       5.00%

AS OF DECEMBER 31, 1999
  Total Risk-Based Capital (to Risk-
  Weighted Assets):
   Consolidated                              $   24,916,880     15.59%       12,788,124       8.00%             N/A        N/A
   Bank                                      $   23,992,915     15.04%       12,764,096       8.00%      15,955,120     10.00%
Tier I Capital (to Risk-Weighted Assets):
   Consolidated                              $   22,918,736     14.34%        6,394,062       4.00%           N/A          N/A
   Bank                                      $   21,998,525     13.79%        6,382,048       4.00%       9,573,072      6.00%
Tier I Capital (to Average Assets):
   Consolidated                              $   22,918,736     10.85%        8,449,338       4.00%           N/A          N/A
   Bank                                      $   21,998,525     10.51%        8,375,017       4.00%      10,468,771      5.00%
</TABLE>



                                      F-19
<PAGE>



                       FNB BANKING COMPANY AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(16)   FNB BANKING COMPANY (PARENT COMPANY ONLY) FINANCIAL INFORMATION

                                 Balance Sheets
                           December 31, 2000 and 1999

<TABLE>
<CAPTION>
                                                                         2000                1999
                                                                         ----                ----
<S>                                                                  <C>                  <C>
                                     Assets
                                     ------
      Cash                                                           $      36,320           161,203
      Investment in First National Bank of Griffin                      24,483,103        21,403,945
      Investment securities available for sale                           1,264,137         1,366,707
      Other assets                                                         548,733           744,282
                                                                        ----------        ----------
                                                                     $  26,332,293        23,676,137
                                                                        ==========        ==========

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

      Other liabilities                                              $     570,201           317,949
      Dividends payable                                                    548,733           512,800
      Stockholders' equity                                              25,213,359        22,845,388
                                                                        ----------        ----------
                                                                     $  26,332,293        23,676,137
                                                                        ==========        ==========
</TABLE>


                             Statements of Earnings

              For the Years Ended December 31, 2000, 1999 and 1998

<TABLE>
<CAPTION>
                                                                 2000         1999       1998
                                                                 ----         ----       ----
<S>                                                           <C>          <C>         <C>
Income:
   Interest and dividends                                     $   58,995      58,311      45,658
   Other                                                            --          --       129,912
   Dividends from subsidiary                                     798,573   1,865,460   1,009,750
                                                              ----------   ---------   ---------

                                                                 857,568   1,923,771   1,185,320
                                                              ----------   ---------   ---------

 Other operating expenses                                         78,973      93,863     214,209
                                                              ----------   ---------   ---------

   Earnings before income taxes and equity in undistributed
     earnings of bank subsidiary                                 778,595   1,829,908     971,111

 Income tax benefit                                               24,509        --        14,667
                                                              ----------   ---------   ---------

   Earnings before equity in undistributed earnings of
   bank subsidiary                                               803,104   1,829,908     985,778

 Equity in undistributed earnings of bank subsidiary           2,401,451     273,730   1,934,681
                                                              ----------   ---------   ---------

   Net earnings                                               $3,204,555   2,103,638   2,920,459
                                                              ==========   =========   =========
</TABLE>



                                      F-20
<PAGE>

                       FNB BANKING COMPANY AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(16)  FNB BANKING COMPANY (PARENT COMPANY ONLY) FINANCIAL INFORMATION, CONTINUED

                            Statements of Cash Flows

              For the Years Ended December 31, 2000, 1999 and 1998


<TABLE>
<CAPTION>
                                                                   2000          1999         1998
                                                                   ----          ----         ----
<S>                                                            <C>           <C>            <C>

Cash flows from operating activities:
     Net earnings                                              $ 3,204,555     2,103,638     2,920,459
     Adjustments to reconcile net earnings
       to net cash provided by operating activities:
         Equity in undistributed earnings of bank subsidiary    (2,401,451)     (273,730)   (1,934,681)
         Depreciation                                                 --            --          17,537
         Change in other assets and liabilities, net               486,779      (279,663)      (24,484)
                                                               -----------    ----------    ----------
     Net cash provided by operating activities                   1,289,883     1,550,245       978,831
                                                               -----------    ----------    ----------

Cash flows from financing activities:
     Dividends paid                                             (1,023,966)   (1,002,729)     (969,360)
     Purchase and retirement of stock                             (390,800)     (755,041)         --
                                                               -----------    ----------    ----------
     Net cash used by financing activities                      (1,414,766)   (1,757,770)     (969,360)
                                                               -----------    ----------    ----------

Net change in cash                                                (124,883)     (207,525)        9,471
Cash at beginning of the period                                    161,203       368,728       359,257
                                                               -----------    ----------    ----------
Cash at end of the period                                      $    36,320       161,203       368,728
                                                               ===========    ==========    ==========
</TABLE>



                                      F-21
<PAGE>


                                   SIGNATURES


      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                            FNB BANKING COMPANY
                                                     (REGISTRANT)


                                            By:   /s/ C.A. Knowles
                                               --------------------------------
                                                  C.A. Knowles
                                                  President

Dated:  March 31, 2001


                        POWER OF ATTORNEY AND SIGNATURES

      KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints C. A. Knowles and John T. Newton, Jr., or each of
them, his attorney-in-fact, each with full power of substitution, for him in his
name, place and stead, in any and all capacities, to sign any amendments to this
Report on Form 10-KSB, and to file the same, with exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
and hereby ratifies and confirms all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant
to the requirements of the Securities Exchange Act of 1934, this Report has been
signed by the following persons on behalf of the Registrant in the capacities
and on the dates indicated.

<TABLE>
<CAPTION>

         Signature                            Title                              Date
         ---------                            -----                              ----

<S>                               <C>                                           <C>
 /s/ John T. Newton, Jr.          Chairman of the Board of Directors            3/31/01
John T. Newton, Jr.

 /s/ C.A. Knowles                 President, Treasurer, and                     3/31/01
C.A. Knowles                      Director (principal executive officer)

 /s/ Mark A. Flowers              Assistant Treasurer (principal                3/31/01
Mark A. Flowers                   accounting and financial officer)

 /s/ James A. Mankin              Director and Secretary                        3/31/01
James A. Mankin

 /s/ Henry Cheathan, III          Director                                      3/31/01
J. Henry Cheatham, III

 /s/ James G. Cheatham            Director                                      3/31/01
James G. Cheatham

 /s/ David G. Newton              Director                                      3/31/01
David G. Newton
</TABLE>



<PAGE>



                                  EXHIBIT INDEX



Exhibit No.           Description of Exhibit
-----------           ----------------------

  24.0           A Power of Attorney is set forth on the signature page to
                 this Form 10-KSB.