Exhibit 99(a)

SNB BANCSHARES, INC. AND
SUBSIDIARIESMACON, GEORGIA

CONSOLIDATED FINANCIAL STATEMENTS AS OFDECEMBER 31, 2002 AND
2001 ANDREPORT OF INDEPENDENT ACCOUNTANTS







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SNB BANCSHARES, INC. AND SUBSIDIARIES

CONTENTS



|Report of Independent Accountants                          | 1
|---------------------------------------------------------- | -
|                                                           |  
|Consolidated Balance Sheets                                | 2
|                                                           |  
|Consolidated Statements of Income                          | 4
|                                                           |  
|Consolidated Statements of Comprehensive Income            | 5
|                                                           |  
|Consolidated Statements of Changes in Stockholders Equity | 6
|                                                           |  
|Consolidated Statements of Cash Flows                      | 7
|                                                           |  
|Notes to Consolidated Financial Statements                 | 8









---

MCNAIR,McLEMORE,MIDDLEBROOKS&CO.,LLPCERTIFIED PUBLIC ACCOUNTANTS



|RALPH S. McLEMORE, SR., CPA (1963-1977) |  |                              
|--------------------------------------- |  | -----------------------------
|SIDNEY B. McNAIR, CPA (1954-1992)       |  |                              
|                                        |  |                              
|SIDNEY E. MIDDLEBROOKS, CPA, PC         |  | RICHARD A. WHITTEN, JR., CPA 
|RAY C. PEARSON, CPA                     |  | ELIZABETH WARE HARDIN, CPA   
|J. RANDOLPH NICHOLS, CPA                |  | CAROLINE E. GRIFFIN, CPA     
|WILLIAM H. EPPS, JR., CPA               |  | RONNIE K. GILBERT, CPA       
|RAYMOND A. PIPPIN, JR., CPA             |  | RON C. DOUTHIT, CPA          
|JERRY A. WOLFE, CPA                     |  | CHESLEY P. CAWTHON, JR., CPA 
|W. E. BARFIELD, JR., CPA                |  | CHARLES A. FLETCHER, CPA     
|HOWARD S. HOLLEMAN, CPA                 |  | MARJORIE HUCKABEE CARTER, CPA
|F. GAY McMICHAEL, CPA                   |  | BRYAN A. ISGETT, CPA         

REPORT OF INDEPENDENT ACCOUNTANTS

The Board of Directors and StockholdersSNB Bancshares, Inc. and
Subsidiaries

We have audited the accompanying consolidated balance sheets ofSNB Bancshares, Inc. and Subsidiariesas of December
31, 2002 and 2001 and the related consolidated statements of income, comprehensive income, changes in stockholders equity and cash flows for each of the years in the three-year period ended December 31, 2002. These financial statements are the
responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our
audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated 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 SNB Bancshares, Inc. and Subsidiaries as of December 31, 2002 and 2001 and the results of operations and cash flows
for each of the years in the three-year period ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America.

MCNAIR, MCLEMORE, MIDDLEBROOKS & CO., LLP

Macon, GeorgiaJanuary 17, 2003







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SNB BANCSHARES, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSDECEMBER
31

ASSETS



|                                                                                                     |  | 2002        |             | 2001        |  
|---------------------------------------------------------------------------------------------------- |  | ----------- | ----------- | ----------- | -
|                                                                                                     |  |             |             |             |  
|                                                                                                     |  |             |             |             |  
|Cash and Balances Due from Depository Institutions                                                   |  | $           | 29,940,273  |             | $
|                                                                                                     |  |             |             |             |  
|Interest-Bearing Deposits                                                                            |  | 355,402     |             | 653,772     |  
|                                                                                                     |  |             |             |             |  
|Federal Funds Sold                                                                                   |  | 3,327,000   |             | 1,000       |  
|                                                                                                     |  |             |             |             |  
|Investment Securities                                                                                |  |             |             |             |  
|Available for Sale, At Fair Value                                                                    |  | 36,195,073  |             | 36,022,680  |  
|Held to Maturity, At Cost (Fair Value of $14,200,060 and $11,556,065 in 2002 and 2001,
Respectively) |  | 14,095,897  |             | 11,485,774  |  
|                                                                                                     |  |             |             |             |  
|                                                                                                     |  | 50,290,970  |             | 47,508,454  |  
|                                                                                                     |  |             |             |             |  
|Federal Home Loan Bank Stock, at Cost                                                                |  | 3,613,700   |             | 3,532,900   |  
|                                                                                                     |  |             |             |             |  
|Loans Held for Sale                                                                                  |  | 35,954,615  |             | 40,764,132  |  
|                                                                                                     |  |             |             |             |  
|Loans                                                                                                |  | 438,631,752 |             | 378,716,778 |  
|Allowance for Loan Losses                                                                            |  | (5,479,508  | )           | (4,098,740  | )
|Unearned Interest and Fees                                                                           |  | (185,838    | )           | (174,805    | )
|                                                                                                     |  |             |             |             |  
|                                                                                                     |  | 432,966,406 |             | 374,443,233 |  
|                                                                                                     |  |             |             |             |  
|Premises and Equipment                                                                               |  | 13,110,189  |             | 11,508,012  |  
|                                                                                                     |  |             |             |             |  
|Other Real Estate (Net of Allowance of $713,131 and $139,058 in 2002 and 2001,
Respectively)         |  | 1,903,135   |             | 2,705,073   |  
|                                                                                                     |  |             |             |             |  
|Goodwill                                                                                             |  | 1,899,774   |             | 848,154     |  
|                                                                                                     |  |             |             |             |  
|Other Assets                                                                                         |  | 7,401,016   |             | 5,141,746   |  
|                                                                                                     |  |             |             |             |  
|Total Assets                                                                                         |  | $           | 580,762,480 |             | $
|                                                                                                     |  |             |             |             |  

The accompanying notes are an integral part of these
balance sheets.







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SNB BANCSHARES, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSDECEMBER
31

LIABILITIES AND STOCKHOLDERS EQUITY



|                                                                                                                                                         |  | 2002        |             | 2001        |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------- | ----------- | ----------- | -
|                                                                                                                                                         |  |             |             |             |  
|                                                                                                                                                         |  |             |             |             |  
|Deposits                                                                                                                                                 |  |             |             |             |  
|Noninterest-Bearing                                                                                                                                      |  | $           | 75,138,638  |             | $
|Interest-Bearing                                                                                                                                         |  | 365,493,875 |             | 303,856,127 |  
|                                                                                                                                                         |  |             |             |             |  
|                                                                                                                                                         |  | 440,632,513 |             | 375,064,649 |  
|                                                                                                                                                         |  |             |             |             |  
|Borrowed Money                                                                                                                                           |  |             |             |             |  
|Federal Funds Purchased and Securities Sold Under Agreement to Repurchase                                                                                |  | 11,978,200  |             | 13,243,208  |  
|Demand Notes to U.S. Treasury                                                                                                                            |  | 1,274,176   |             | 246,773     |  
|Obligation Under Capital Lease                                                                                                                           |  |            |             | 29,998      |  
|Other Borrowed Money                                                                                                                                     |  | 64,500,406  |             | 76,898,197  |  
|                                                                                                                                                         |  |             |             |             |  
|                                                                                                                                                         |  | 77,752,782  |             | 90,418,176  |  
|                                                                                                                                                         |  |             |             |             |  
|Other Liabilities                                                                                                                                        |  | 4,828,962   |             | 4,501,303   |  
|                                                                                                                                                         |  |             |             |             |  
|Guaranteed Mandatorily Redeemable Trust Preferred Securities of Subsidiary Trust                                                                         |  | 18,000,000  |             |            |  
|                                                                                                                                                         |  |             |             |             |  
|Stockholders Equity                                                                                                                                     |  |             |             |             |  
|Common Stock, Par Value $1 per Share; Authorized 10,000,000 Shares, Issued 3,398,317 and 3,372,969
Shares as of December 31, 2002 and 2001, Respectively |  | 3,398,317   |             | 3,372,969   |  
|Paid-In Capital                                                                                                                                          |  | 13,352,595  |             | 12,967,398  |  
|Retained Earnings                                                                                                                                        |  | 21,909,432  |             | 17,831,346  |  
|Accumulated Other Comprehensive Income, Net of Tax                                                                                                       |  | 887,879     |             | 605,679     |  
|                                                                                                                                                         |  |             |             |             |  
|                                                                                                                                                         |  | 39,548,223  |             | 34,777,392  |  
|                                                                                                                                                         |  |             |             |             |  
|Total Liabilities and Stockholders Equity                                                                                                               |  | $           | 580,762,480 |             | $
|                                                                                                                                                         |  |             |             |             |  

The accompanying notes are an integral part of these
balance sheets.







---

SNB BANCSHARES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOMEFOR
THE YEARS ENDED DECEMBER 31





|                                                    |  | 2002       |            | 2001       |   | 2000       |  
|--------------------------------------------------- |  | ---------- | ---------- | ---------- | - | ---------- | -
|                                                    |  |            |            |            |   |            |  
|Interest Income                                     |  |            |            |            |   |            |  
|Loans, Including Fees                               |  | $          | 30,542,850 |            | $ | 30,854,495 |  
|Federal Funds Sold                                  |  | 86,096     |            | 143,714    |   | 370,917    |  
|Deposits with Other Banks                           |  | 15,062     |            | 28,191     |   | 22,846     |  
|Investment Securities                               |  |            |            |            |   |            |  
|U. S. Treasury                                      |  | 120,852    |            | 112,134    |   | 43,484     |  
|U. S. Government Agencies                           |  | 1,550,635  |            | 1,893,972  |   | 1,953,173  |  
|State, County and Municipal                         |  | 409,268    |            | 383,857    |   | 454,455    |  
|Other Investments                                   |  | 195,196    |            | 192,240    |   | 141,678    |  
|                                                    |  |            |            |            |   |            |  
|                                                    |  |            |            |            |   |            |  
|                                                    |  | 32,919,959 |            | 33,608,603 |   | 27,034,557 |  
|                                                    |  |            |            |            |   |            |  
|Interest Expense                                    |  |            |            |            |   |            |  
|Deposits                                            |  | 9,840,396  |            | 13,769,985 |   | 10,952,111 |  
|Federal Funds Purchased                             |  | 73,083     |            | 172,545    |   | 232,091    |  
|Demand Notes Issued to the U.S. Treasury            |  | 7,190      |            | 18,787     |   | 29,813     |  
|Other Borrowed Money                                |  | 2,189,054  |            | 2,625,052  |   | 1,891,931  |  
|                                                    |  |            |            |            |   |            |  
|                                                    |  |            |            |            |   |            |  
|                                                    |  | 12,109,723 |            | 16,586,369 |   | 13,105,946 |  
|                                                    |  |            |            |            |   |            |  
|                                                    |  |            |            |            |   |            |  
|Net Interest Income                                 |  | 20,810,236 |            | 17,022,234 |   | 13,928,611 |  
|                                                    |  |            |            |            |   |            |  
|Provision for Loan Losses                           |  | 2,603,133  |            | 1,911,929  |   | 1,292,006  |  
|                                                    |  |            |            |            |   |            |  
|                                                    |  |            |            |            |   |            |  
|Net Interest Income After Provision for Loan Losses |  | 18,207,103 |            | 15,110,305 |   | 12,636,605 |  
|                                                    |  |            |            |            |   |            |  
|                                                    |  |            |            |            |   |            |  
|Noninterest Income                                  |  |            |            |            |   |            |  
|Service Charges on Deposits                         |  | 3,405,889  |            | 2,595,303  |   | 1,844,204  |  
|Other Service Charges, Commissions and Fees         |  | 9,558,975  |            | 8,422,699  |   | 3,379,355  |  
|Securities Gains                                    |  | 135,802    |            | 100,596    |   | 5,816      |  
|Other                                               |  | 44,628     |            | 27,990     |   | 124,809    |  
|                                                    |  |            |            |            |   |            |  
|                                                    |  |            |            |            |   |            |  
|                                                    |  | 13,145,294 |            | 11,146,588 |   | 5,354,184  |  
|                                                    |  |            |            |            |   |            |  
|Noninterest Expenses                                |  |            |            |            |   |            |  
|Salaries and Employee Benefits                      |  | 13,603,708 |            | 11,983,529 |   | 7,373,394  |  
|Occupancy and Equipment                             |  | 2,537,718  |            | 2,422,449  |   | 1,825,037  |  
|Loss (Gain) on Sale of Premises and Equipment       |  | (4,750     | )          | 26,018     |   | 3,810      |  
|Office Supplies and Printing                        |  | 537,648    |            | 403,226    |   | 367,879    |  
|Telephone                                           |  | 600,575    |            | 555,554    |   | 300,516    |  
|Loss (Gain) on Foreclosed Property                  |  | 615,496    |            | 168,044    |   | (2,307     | )
|Other                                               |  | 5,131,189  |            | 3,837,941  |   | 2,786,305  |  
|                                                    |  |            |            |            |   |            |  
|                                                    |  |            |            |            |   |            |  
|                                                    |  | 23,021,584 |            | 19,396,761 |   | 12,654,634 |  
|                                                    |  |            |            |            |   |            |  
|                                                    |  |            |            |            |   |            |  
|Income Before Income Taxes                          |  | 8,330,813  |            | 6,860,132  |   | 5,336,155  |  
|                                                    |  |            |            |            |   |            |  
|Income Taxes                                        |  | 3,065,059  |            | 2,517,964  |   | 1,856,908  |  
|                                                    |  |            |            |            |   |            |  
|                                                    |  |            |            |            |   |            |  
|Net Income                                          |  | $          | 5,265,754  |            | $ | 4,342,168  |  
|                                                    |  |            |            |            |   |            |  
|                                                    |  |            |            |            |   |            |  
|Basic Earnings Per Share                            |  | $          | 1.55       |            | $ | 1.29       |  
|                                                    |  |            |            |            |   |            |  
|                                                    |  |            |            |            |   |            |  
|Diluted Earnings Per Share                          |  | $          | 1.52       |            | $ | 1.29       |  
|                                                    |  |            |            |            |   |            |  

The accompanying notes are an integral part of these
statements.







---

SNB BANCSHARES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOMEFOR THE YEARS ENDED DECEMBER 31



|                                       |  | 2002    |           | 2001    |   | 2000      |  
|-------------------------------------- |  | ------- | --------- | ------- | - | --------- | -
|                                       |  |         |           |         |   |           |  
|Net Income                             |  | $       | 5,265,754 |         | $ | 4,342,168 |  
|                                       |  |         |           |         |   |           |  
|                                       |  |         |           |         |   |           |  
|Other Comprehensive Income, Net of Tax |  |         |           |         |   |           |  
|Gains on Securities                    |  |         |           |         |   |           |  
|Arising During the Year                |  | 371,829 |           | 457,645 |   | 657,964   |  
|Reclassification Adjustment            |  | (89,629 | )         | (47,464 | ) | (3,839    | )
|                                       |  |         |           |         |   |           |  
|                                       |  |         |           |         |   |           |  
|Unrealized Gains on Securities         |  | 282,200 |           | 410,181 |   | 654,125   |  
|                                       |  |         |           |         |   |           |  
|                                       |  |         |           |         |   |           |  
|Comprehensive Income                   |  | $       | 5,547,954 |         | $ | 4,752,349 |  
|                                       |  |         |           |         |   |           |  

The accompanying notes are an integral part of these
statements.







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SNB BANCSHARES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS
EQUITYFOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000



|                                                                                      |  | Shares    |           | CommonStock |           | Paid-InCapital |   | RetainedEarnings |            | AccumulatedOtherComprehensiveIncome (Loss) |            | Total      |  
|------------------------------------------------------------------------------------- |  | --------- | --------- | ----------- | --------- | -------------- | - | ---------------- | ---------- | ------------------------------------------ | ---------- | ---------- | -
|                                                                                      |  |           |           |             |           |                |   |                  |            |                                            |            |            |  
|                                                                                      |  |           |           |             |           |                |   |                  |            |                                            |            |            |  
|Balance, December 31, 1999                                                            |  | 3,340,624 |           | $           | 3,340,624 |                | $ | 12,611,603       |            | $                                          | 11,978,751 |            | $
|                                                                                      |  |           |           |             |           |                |   |                  |            |                                            |            |            |  
|Shares Issued in Connection with the Business Combination Accounted for as a Purchase |  | 32,345    |           | 32,345      |           | 355,795        |   |                  |            |                                            |            | 388,140    |  
|Unrealized Gain on Securities Available for Sale, Net of Tax Benefit of
$336,973      |  |           |           |             |           |                |   |                  |            | 654,125                                    |            | 654,125    |  
|Cash Dividends                                                                        |  |           |           |             |           |                |   | (923,200         | )          |                                            |            | (923,200   | )
|Net Income                                                                            |  |           |           |             |           |                |   | 3,479,247        |            |                                            |            | 3,479,247  |  
|                                                                                      |  |           |           |             |           |                |   |                  |            |                                            |            |            |  
|                                                                                      |  |           |           |             |           |                |   |                  |            |                                            |            |            |  
|Balance, December 31, 2000                                                            |  | 3,372,969 |           | 3,372,969   |           | 12,967,398     |   | 14,534,798       |            | 195,498                                    |            | 31,070,663 |  
|                                                                                      |  |           |           |             |           |                |   |                  |            |                                            |            |            |  
|Unrealized Gain on Securities Available for Sale, Net of Tax of
$211,305              |  |           |           |             |           |                |   |                  |            | 410,181                                    |            | 410,181    |  
|Cash Dividends                                                                        |  |           |           |             |           |                |   | (1,045,620       | )          |                                            |            | (1,045,620 | )
|Net Income                                                                            |  |           |           |             |           |                |   | 4,342,168        |            |                                            |            | 4,342,168  |  
|                                                                                      |  |           |           |             |           |                |   |                  |            |                                            |            |            |  
|                                                                                      |  |           |           |             |           |                |   |                  |            |                                            |            |            |  
|Balance, December 31, 2001                                                            |  | 3,372,969 |           | 3,372,969   |           | 12,967,398     |   | 17,831,346       |            | 605,679                                    |            | 34,777,392 |  
|                                                                                      |  |           |           |             |           |                |   |                  |            |                                            |            |            |  
|Shares Issued in Connection with Contingent Payments                                  |  | 15,098    |           | 15,098      |           | 219,824        |   |                  |            |                                            |            | 234,922    |  
|Stock Options Exercised                                                               |  | 10,250    |           | 10,250      |           | 120,000        |   |                  |            |                                            |            | 130,250    |  
|Stock Based Compensation Awards                                                       |  |           |           |             |           | 45,373         |   |                  |            |                                            |            | 45,373     |  
|Unrealized Gain on Securities Available for Sale, Net of Tax of $145,376              |  |           |           |             |           |                |   |                  |            | 282,200                                    |            | 282,200    |  
|Cash Dividends                                                                        |  |           |           |             |           |                |   | (1,187,668       | )          |                                            |            | (1,187,668 | )
|Net Income                                                                            |  |           |           |             |           |                |   | 5,265,754        |            |                                            |            | 5,265,754  |  
|                                                                                      |  |           |           |             |           |                |   |                  |            |                                            |            |            |  
|                                                                                      |  |           |           |             |           |                |   |                  |            |                                            |            |            |  
|Balance, December 31, 2002                                                            |  |           | 3,398,317 |             | $         | 3,398,317      |   | $                | 13,352,595 |                                            | $          | 21,909,432 |  
|                                                                                      |  |           |           |             |           |                |   |                  |            |                                            |            |            |  

The accompanying notes are an integral part of these
statements.







---

SNB BANCSHARES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED DECEMBER 31



|                                                                                                   |  | 2002         |            | 2001         |   | 2000         |  
|-------------------------------------------------------------------------------------------------- |  | ------------ | ---------- | ------------ | - | ------------ | -
|                                                                                                   |  |              |            |              |   |              |  
|Cash Flows from Operating Activities                                                               |  |              |            |              |   |              |  
|Net Income                                                                                         |  | $            | 5,265,754  |              | $ | 4,342,168    |  
|Adjustments to Reconcile Net Income to Net                                                         |  |              |            |              |   |              |  
|Cash Provided from Operating Activities                                                            |  |              |            |              |   |              |  
|Stock Options                                                                                      |  | 45,373       |            |             |   |             |  
|Depreciation                                                                                       |  | 1,083,915    |            | 962,321      |   | 800,381      |  
|Amortization and Accretion                                                                         |  | 560,144      |            | 231,172      |   | 68,480       |  
|Provision for Loan Losses                                                                          |  | 2,603,133    |            | 1,911,929    |   | 1,292,006    |  
|Deferred Income Taxes                                                                              |  | (456,647     | )          | (389,259     | ) | (155,369     | )
|Securities Gains                                                                                   |  | (135,802     | )          | (100,596     | ) | (5,816       | )
|(Gain) Loss on Sale of Other Real Estate                                                           |  | 200,393      |            | 44,023       |   | (2,348       | )
|Unrealized Loss on Other Real Estate                                                               |  | 415,103      |            | 139,058      |   |             |  
|(Gain) Loss on Sale of Premises and Equipment                                                      |  | (4,750       | )          | 26,018       |   | 3,810        |  
|Loans Held for Sale                                                                                |  | 4,809,517    |            | (27,548,917  | ) | (11,454,463  | )
|Change In:                                                                                         |  |              |            |              |   |              |  
|Interest Receivable                                                                                |  | 66,417       |            | 562,113      |   | (1,099,631   | )
|Prepaid Expenses                                                                                   |  | (262,425     | )          | (83,533      | ) | (94,442      | )
|Interest Payable                                                                                   |  | (941,126     | )          | 213,343      |   | 587,327      |  
|Accrued Expenses and Accounts Payable                                                              |  | 461,257      |            | 878,030      |   | 91,840       |  
|Other                                                                                              |  | (253,259     | )          | 111,781      |   | (456,123     | )
|                                                                                                   |  |              |            |              |   |              |  
|                                                                                                   |  |              |            |              |   |              |  
|                                                                                                   |  | 13,456,997   |            | (18,700,349  | ) | (6,945,101   | )
|                                                                                                   |  |              |            |              |   |              |  
|Cash Flows from Investing Activities                                                               |  |              |            |              |   |              |  
|Interest-Bearing Deposits with Other Banks                                                         |  | 298,370      |            | (317,366     | ) | (305,498     | )
|Cash Used in Business Acquisition (Net)                                                            |  |             |            |             |   | (994,842     | )
|Purchase of Investment Securities Available for Sale                                               |  | (16,098,920  | )          | (17,367,367  | ) | (19,475,679  | )
|Purchase of Investment Securities Held to Maturity                                                 |  | (12,693,271  | )          | (9,706,318   | ) |             |  
|Proceeds from Disposition of Investment Securities                                                 |  |              |            |              |   |              |  
|Available for Sale                                                                                 |  | 16,228,118   |            | 29,119,443   |   | 14,898,860   |  
|Held to Maturity                                                                                   |  | 10,093,000   |            | 210,000      |   | 935,095      |  
|Purchase of Federal Home Loan Bank Stock, Net                                                      |  | (80,800      | )          | (1,069,200   | ) | (1,708,500   | )
|Loans to Customers, Net                                                                            |  | (61,816,693  | )          | (77,184,484  | ) | (100,758,318 | )
|Purchase of Software                                                                               |  | (819,997     | )          | (185,844     | ) | (285,490     | )
|Purchase of Premises and Equipment, Net of Premises and Equipment Received in
Business Acquisition |  | (2,704,286   | )          | (3,688,295   | ) | (1,060,146   | )
|Proceeds from Disposal of Premises and Equipment                                                   |  | 22,944       |            | 132,339      |   | 1,572        |  
|Other Real Estate                                                                                  |  | 371,771      |            | 378,075      |   | 361,980      |  
|Debt Collections on Other Real Estate                                                              |  | 325,642      |            |             |   |             |  
|Goodwill Resulting from Contingent Payments                                                        |  | (816,698     | )          |             |   |             |  
|                                                                                                   |  |              |            |              |   |              |  
|                                                                                                   |  |              |            |              |   |              |  
|                                                                                                   |  | (67,690,820  | )          | (79,679,017  | ) | (108,390,966 | )
|                                                                                                   |  |              |            |              |   |              |  
|Cash Flows from Financing Activities                                                               |  |              |            |              |   |              |  
|Interest-Bearing Customer Deposits                                                                 |  | 61,637,748   |            | 57,759,977   |   | 59,874,401   |  
|Noninterest-Bearing Customer Deposits                                                              |  | 3,930,116    |            | 5,727,827    |   | 14,284,798   |  
|Demand Note to the U.S. Treasury                                                                   |  | 1,027,403    |            | (684,872     | ) | 496,634      |  
|Dividends Paid                                                                                     |  | (1,187,668   | )          | (1,045,620   | ) | (923,200     | )
|Federal Funds Purchased                                                                            |  | (1,265,008   | )          | 4,644,980    |   | (592,917     | )
|Proceeds from Federal Home Loan Bank Notes                                                         |  | 320,896,509  |            | 322,435,000  |   | 130,215,419  |  
|Repayments on Federal Home Loan Bank Notes                                                         |  | (333,294,300 | )          | (299,975,784 | ) | (81,831,439  | )
|Obligation Under Capital Lease                                                                     |  | (29,998      | )          | (57,783      | ) | (54,844      | )
|Proceeds from Issuance of Trust Preferred Securities                                               |  | 18,000,000   |            |             |   |             |  
|Issuance of Common Stock                                                                           |  | 130,250      |            |             |   |             |  
|                                                                                                   |  |              |            |              |   |              |  
|                                                                                                   |  |              |            |              |   |              |  
|                                                                                                   |  | 69,845,052   |            | 88,803,725   |   | 121,468,852  |  
|                                                                                                   |  |              |            |              |   |              |  
|                                                                                                   |  |              |            |              |   |              |  
|Net Increase (Decrease) in Cash and Cash Equivalents                                               |  | 15,611,229   |            | (9,575,641   | ) | 6,132,785    |  
|                                                                                                   |  |              |            |              |   |              |  
|Cash and Cash Equivalents, Beginning                                                               |  | 17,656,044   |            | 27,231,685   |   | 21,098,900   |  
|                                                                                                   |  |              |            |              |   |              |  
|                                                                                                   |  |              |            |              |   |              |  
|Cash and Cash Equivalents, Ending                                                                  |  | $            | 33,267,273 |              | $ | 17,656,044   |  
|                                                                                                   |  |              |            |              |   |              |  



The accompanying notes are an integral part of these statements.







---

SNB BANCSHARES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of SNB Bancshares, Inc. (the Company) and its wholly-owned subsidiaries, Security Bank
of Bibb County (which includes its wholly-owned subsidiary, Fairfield Financial Services, Inc.) located in Macon, Georgia and Security Bank of Houston County, located in Perry, Georgia (the Banks). All significant intercompany accounts have been
eliminated. The accounting and reporting policies of SNB Bancshares, Inc. and Subsidiaries (SNB) conform to generally accepted accounting principles and practices utilized in the commercial banking industry.

In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet date and revenues and expenses for the
period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of real
estate acquired in connection with foreclosures or in satisfaction of loans and the valuation of deferred tax assets.

In certain instances, amounts reported in prior years
consolidated financial statements have been reclassified to conform to statement presentations selected for 2002. Such reclassifications had no effect on previously reported stockholders equity or net income.

Description of Business

The Banks provide a full range of retail and commercial banking services for consumers and small
to medium size businesses primarily in central Georgia. Lending and investing activities are funded primarily by deposits gathered through its retail branch office network. Lending is concentrated in mortgage, commercial and consumer loans to local
borrowers. The Banks have a high concentration of real estate loans; however, these loans are well collateralized and, in managements opinion, do not pose an unacceptable level of credit risk. In addition, the balance of the loan portfolio is
sufficiently diversified to avoid significant concentration of credit risk. Although the Banks have a diversified loan portfolio, a substantial portion of borrowers ability to honor their contracts is dependent upon the viability of the real
estate economic sector.

The success of SNB is dependent, to a certain extent, upon the economic conditions in the geographic markets it serves. No assurance can be given that the
current economic conditions will continue. Adverse changes in the economic conditions in these geographic markets would likely have a material adverse effect on the Companys results of operations and financial condition. The operating results
of SNB depend primarily on its net interest income. Accordingly, operations are subject to risks and uncertainties surrounding the exposure to changes in the interest rate environment.

Accounting Policies

The accounting and reporting policies of SNB Bancshares, Inc. and its subsidiaries are in accordance with accounting
principles generally accepted and conform to general practices within the banking industry. The significant accounting policies followed by SNB and the methods of applying those policies are summarized hereafter.







---

(1) Summary of Significant Accounting Policies (Continued)

Investment
Securities

Investment securities are recorded under Statement of Financial Accounting Standards No. 115, whereby the Banks classify their securities as trading, available for
sale or held to maturity. Securities that are held principally for resale in the near term are classified as trading. Trading securities are carried at fair value, with realized and unrealized gains and losses included in noninterest income.
Securities acquired with both the intent and ability to be held to maturity are classified as held to maturity and reported at amortized cost. All other securities not classified as trading or held to maturity are considered available for
sale.

Securities available for sale are reported at estimated fair value. Unrealized gains and losses on securities available for sale are excluded from earnings and are
reported, net of deferred taxes, in accumulated other comprehensive income, a component of stockholders equity. Gains and losses from sales of securities available for sale are computed using the specific identification method. This caption
includes securities, which may be sold to meet liquidity needs arising from unanticipated deposit and loan fluctuations, changes in regulatory capital requirements, or unforeseen changes in market conditions.

Federal Home Loan Bank Stock

Investment in stock of a Federal Home Loan Bank (FHLB) is required for every federally insured institution that
utilizes its services. FHLB stock is considered restricted, as defined in Statement of Financial Accounting Standards (SFAS) No. 115; accordingly, the provisions of SFAS No. 115 are not applicable to this investment. The FHLB stock is reported in
the financial statements at cost. Dividend income is recognized when earned.

Loans Held for Sale

Loans held for sale are reported at the lower of cost or market value on an aggregate loan portfolio basis. Gains or losses realized on the sales of loans are recognized at the time of sale and are determined by the difference between the net
sales proceeds and the carrying value of the loans sold. Gains and losses on sales of loans are included in noninterest income.

Loans

Loans that the Company has the ability and intent to hold for the foreseeable future or until maturity are recorded at their principal amount outstanding, net of unearned interest and fees. Interest
income on loans is recognized using the effective interest method.

When management believes there is sufficient doubt as to the collectibility of principal or interest on any
loan, or generally when loans are 90 days or more past due, the accrual of applicable interest is discontinued and the loan is designated as nonaccrual, unless the loan is well secured and in the process of collection. Interest payments received on
nonaccrual loans are either applied against principal or reported as income, according to managements judgment as to the collectibility of principal. Loans are returned to an accrual status when factors indicating doubtful collectibility on a
timely basis no longer exist.







---

(1) Summary of Significant Accounting Policies (Continued)

Loans
(Continued)

Impaired loans are recorded under Statement of Financial Accounting Standards (SFAS) No. 114,Accounting by Creditors for Impairment of a
Loanand SFAS No. 118,Accounting by Creditors for Impairment of a Loan-Income Recognition and Disclosures.Impaired loans are loans for which principal and interest are unlikely
to be collected in accordance with the original loan terms and, generally, represent loans delinquent in excess of 90 days which have been placed on nonaccrual status and for which collateral values are less than outstanding principal and interest.
Small balance, homogenous loans are excluded from impaired loans.

Allowance for Loan Losses

The
allowance method is used in providing for losses on loans. Accordingly, all loan losses decrease the allowance and all recoveries increase it. The provision for loan losses is based on factors which, in managements judgment, deserve current
recognition in estimating possible loan losses. Such factors considered by management include growth and composition of the loan portfolio, economic conditions and the relationship of the allowance for loan losses to outstanding loans.

An allowance for loan losses is maintained for all impaired loans. Provisions are made for impaired loans upon changes in expected future cash flows or estimated net realizable value of
collateral. When determination is made that impaired loans are wholly or partially uncollectible, the uncollectible portion is charged off.

Management believes the allowance for
possible loan losses is adequate. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions. In addition, various regulatory agencies, as an
integral part of their examination process, periodically review the Companys allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance based on their judgment about information available to them
at the time of their examination.

Premises and Equipment

Premises and equipment are recorded at
acquisition cost net of accumulated depreciation.

Depreciation is charged to operations over the estimated useful lives of the assets. The estimated useful lives and methods of
depreciation are as follows:



|Description             |  | Life in Years |  | Method       
|----------------------- |  | ------------- |  | -------------
|                        |  |               |  |              
|                        |  |               |  |              
|Banking Premises        |  | 39            |  | Straight-Line
|Furniture and Equipment |  | 5-25          |  | Straight-Line

Expenditures for
major renewals and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. When property and equipment are retired or sold, the cost and accumulated depreciation are removed from the respective accounts and any
gain or loss is reflected in other income or expense.







---

(1) Summary of Significant Accounting Policies (Continued)

Income
Taxes

The provision for income taxes is based upon income for financial statement purposes, adjusted for nontaxable income and nondeductible expenses. Deferred income taxes
have been provided when different accounting methods have been used in determining income for income tax purposes and for financial reporting purposes. Deferred tax assets and liabilities are recognized based on future tax consequences attributable
to differences arising from the financial statement carrying values of assets and liabilities and their tax bases. The differences relate primarily to depreciable assets (use of different depreciation methods for financial statement and income tax
purposes) and allowance for loan losses (use of the allowance method for financial statement purposes and the direct write-off method for tax purposes). In the event of changes in the tax laws, deferred tax assets and liabilities are adjusted in the
period of the enactment of those changes, with the effects included in the income tax provision. The Company and its subsidiaries file a consolidated federal income tax return. Each subsidiary pays its proportional share of federal income taxes to
the Company based on its taxable income.

Comprehensive Income

Accounting principles generally
require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on securities available for sale, represent equity changes from economic events of
the period other than transactions with owners and are not reported in the consolidated statements of income but as a separate component of the equity section of the consolidated balance sheets. Such items are considered components of other
comprehensive income. Statement of Financial Accounting Standards No. 130,Reporting Comprehensive Income,requires the presentation in the financial statements of net income and all items of other
comprehensive income as total comprehensive income.

Other Real Estate

Other real estate generally
represents real estate acquired through foreclosure and is initially recorded at the lower of cost or estimated market value at the date of acquisition. An allowance for estimated losses is recorded when a subsequent decline in value
occurs.

Statement of Cash Flows

For purposes of reporting cash flows, cash and cash equivalents
include cash on hand, cash items, noninterest-bearing amounts due from banks and federal funds sold.







---

(1) Summary of Significant Accounting Policies (Continued)

Changes in
Accounting Principles and Effects of New Accounting Pronouncements

In June 2001, the FASB issued SFAS No. 141,Business Combinations, which supersedes Accounting Principles Board (APB) Opinion No. 16,Business Combinations, and SFAS No. 38,Accounting for Reacquisition Contingencies of
Purchased Enterprises. The provisions of the Statement apply to all business combinations initiated after June 30, 2001. SFAS No. 141 requires that all business combinations be accounted for by the purchase method of
accounting. This method requires the accounts of an acquired business to be included with the acquirers accounts as of the date of acquisition with any excess of purchase price over the fair value of the net assets acquired to be capitalized
as goodwill or other intangibles. The Statement requires that the assets of an acquired company be recognized as assets apart from goodwill if they meet specific criteria presented in the Statement. The Statement ends the use of the
pooling-of-interests method of accounting for business combinations, which required the restatement of all prior period information for the accounts of the acquired institution. As a result of the adoption of this statement, SNB will account for all
mergers and acquisitions initiated after June 30, 2001, using the purchase method.

In June 2001, the FASB issued SFAS No. 142,Goodwill and Other
Intangible Assets, which supersedes APB Opinion No. 17,Intangible Assets. SFAS No. 142 addresses how intangible assets that are acquired individually or with a group of other
assets (but not those acquired in a business combination) should be accounted for in financial statements upon their acquisition, and addresses how goodwill and other intangible assets should be accounted for after they have been initially
recognized in the financial statements. The Statement eliminates the requirement to amortize goodwill and other intangible assets that have indefinite useful lives, instead requiring that the assets be tested annually for impairment based on the
specific guidance in the Statement. SNB adopted the provisions of the Statement effective January 1, 2002, as required, and applied the provisions of the Statement to all goodwill and other intangible assets recognized in the financial statements.
SFAS No. 142 requires a transitional impairment test of all goodwill and other indefinite-lived intangible assets in conjunction with its initial application. The Statement required this test to be performed with any resulting impairment loss to be
reported as a change in accounting principle. No impairment was recorded based on the results of these tests.

In June 2001, the FASB issued SFAS No. 143,Accounting for Asset Retirement Obligations, which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs.
The Statement is effective beginning January 1, 2003. Management does not expect the implementation of the Statement to have a material impact on SNBs financial position or results of operations.

In August 2001, the FASB issued SFAS No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets,which supercedes SFAS No. 121,Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,and the accounting and reporting provisions of APB Opinion No. 30,Reporting the Results of
Operations-Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions.The Statement establishes a single accounting model for long-lived assets
to be disposed of by sale, and resolves significant implementation issues related to SFAS No. 121. The provisions of the Statement were adopted by SNB on January 1, 2002. The implementation did not have a material impact on SNBs financial
position or results of operations.







---

(1) Summary of Significant Accounting Policies (Continued)

Changes in
Accounting Principles and Effects of New Accounting Pronouncements (Continued)

In May 2002, the FASB issued SFAS No. 145,Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections as of April 2002. This Statement rescinds SFAS No. 4,Reporting Gains and Losses from Extinguishment of Debt,and an amendment of that Statement, SFAS No. 64,Extinguishment of Debt Made to Satisfy Sinking-Fund Requirements. This Statement also rescinds SFAS No. 44,Accounting for Intangible Assets of Motor Carriers, and amends SFAS No. 13,Accounting for Leases, to eliminate an inconsistency between the required accounting for
sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. This Statement also amends other existing authoritative pronouncements to make
various technical corrections, clarify meanings, or describe their applicability under changed conditions. SNB will adopt the provisions of this Statement effective January 1, 2003. Management does not anticipate that the implementation of this
Statement will have a material impact on SNBs financial position or results of operations.

In August 2002, the FASB issued SFAS No. 146,Accounting
for Costs Associated with Exit or Disposal Activities. SFAS No. 146 requires that a liability for a cost that is associated with an exit or disposal activity be recognized when the liability is incurred. This Statement
nullifies the guidance of the Emerging Issues Task Force (EITF) in EITF Issue No. 94-3,Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs
Incurred in a Restructuring). Under EITF Issue No. 94-3, an entity recognized a liability for an exit cost on the date that the entity committed itself to an exit plan. In SFAS No. 146, the Board acknowledges that an
entitys commitment to a plan does not, by itself, create a present obligation to other parties that meets the definition of a liability. SFAS No. 146 also establishes that fair value is the objective for the initial measurement of the
liability. SFAS No. 146 will be effective for exit or disposal activities that are initiated after December 31, 2002. SNB will adopt the provisions of this Statement effective January 1, 2003. Management does not anticipate that the implementation
of this Statement will have a materially adverse impact on SNBs financial position or results of operations.

In October 2002, the FASB issued SFAS No. 147,Acquisitions of Certain Financial Institutions, an amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9, which addresses the financial accounting and reporting for the acquisitions of all or part
of a financial institution. SFAS No. 147 removes acquisitions of financial institutions, except for transactions between two or more mutual enterprises, from the scope of both SFAS No. 72 and Interpretation No. 9 and requires that those transactions
be accounted for in accordance with SFAS No. 141,Business Combinations, and SFAS No. 142,Goodwill and Other Intangible Assets. SFAS No. 147 also amends
SFAS No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets, to include in its scope long-term customer-relationship and credit cardholder intangible assets, and requires companies to
cease amortization of unidentifiable assets associated with certain branch acquisitions. The provisions of this Statement were effective beginning October 1, 2002. The implementation of this Statement did not have an impact on SNBs financial
position or results of operations.

Segment Reporting

Reportable segments are business units which
offer different products and services and require different management and marketing strategies. Management of SNB Bancshares, Inc. considers that all banking operations are essentially similar within each of its subsidiaries and that there are no
reportable operating segments. However, fee income from mortgage loans originated and sold to investors increased significantly with the July 2000 acquisition of Fairfield Financial Services, Inc. (Fairfield). Consolidated other income for the year
ended December 31, 2002 includes $8,953,861 and $7,825,843, respectively, of Fairfield fee income. Such income may fluctuate significantly with increases or decreases in mortgage rates.







---

(2)Cash and Balances Due from Depository Institutions

Components of cash and balances due from depository institutions are as follows as of December 31:



|                                              |  | 2002       |            | 2001       |  
|--------------------------------------------- |  | ---------- | ---------- | ---------- | -
|                                              |  |            |            |            |  
|                                              |  |            |            |            |  
|Cash on Hand and Cash Items                   |  | $          | 5,787,572  |            | $
|Noninterest-Bearing Deposits with Other Banks |  | 24,152,701 |            | 12,510,461 |  
|                                              |  |            |            |            |  
|                                              |  |            |            |            |  
|                                              |  | $          | 29,940,273 |            | $
|                                              |  |            |            |            |  

As of December 31, 2002, the Banks had required deposits of $2,697,000
with the Federal Reserve.

(3)Investment Securities

Investment securities as of December 31, 2002 are summarized as follows:



|2002                          |  |            | AmortizedCost |         | GrossUnrealizedGains |           | GrossUnrealizedLosses |            | FairValue |  
|----------------------------- |  | ---------- | ------------- | ------- | -------------------- | --------- | --------------------- | ---------- | --------- | -
|                              |  |            |               |         |                      |           |                       |            |           |  
|                              |  |            |               |         |                      |           |                       |            |          
|Securities Available for Sale |  |            |               |         |                      |           |                       |            |          
|                              |  |            |               |         |                      |           |                       |            |          
|U.S. Treasury                 |  | $          | 2,279,219     |         | $                    | 83,504    |                       | $          |          |  
|U.S. Government Agencies      |  |            |               |         |                      |           |                       |            |          
|Mortgage Backed               |  | 19,075,517 |               | 577,953 |                      | (149      | )                     | 19,653,321 |          
|Other                         |  | 5,806,502  |               | 409,402 |                      |          |                       | 6,215,904  |          
|State, County and Municipal   |  | 7,688,563  |               | 283,636 |                      | (9,074    | )                     | 7,963,125  |          
|                              |  |            |               |         |                      |           |                       |            |          
|                              |  |            |               |         |                      |           |                       |            |          
|                              |  | $          | 34,849,801    |         | $                    | 1,354,495 |                       | $          | (9,223    | )
|                              |  |            |               |         |                      |           |                       |            |           |  
|Securities Held to Maturity   |  |            |               |         |                      |           |                       |            |          
|                              |  |            |               |         |                      |           |                       |            |          
|U.S. Government Agencies      |  |            |               |         |                      |           |                       |            |          
|Other                         |  | $          | 12,697,268    |         | $                    |          |                       | $          |          |  
|State, County and Municipal   |  | 1,398,629  |               | 104,163 |                      |          |                       | 1,502,792  |          
|                              |  |            |               |         |                      |           |                       |            |          
|                              |  |            |               |         |                      |           |                       |            |          
|                              |  | $          | 14,095,897    |         | $                    | 104,163   |                       | $          |          |  
|                              |  |            |               |         |                      |           |                       |            |           |  

The amortized cost and fair value of investment securities as of
December 31, 2002, by contractual maturity, are presented hereafter. Expected maturities will differ from contractual maturities because issuers have the right to call or prepay obligations with or without call or prepayment penalties.







---

(3)Investment Securities (Continued)



|                                      |  | Securities         |           
|------------------------------------- |  | ------------------ | ----------
|                                      |  |                    |           
|                                      |  | Available for Sale |           
|                                      |  |                    |           
|                                      |  |                    |           
|                                      |  | Amortized          |           
|                                      |  | Cost               |           
|                                      |  |                    |           
|                                      |  |                    |           
|Due in One Year or Less               |  | $                  | 2,858,135 
|Due After One YearThrough Five Years  |  | 6,784,762          |           
|Due After Five YearsThrough Ten Years |  | 5,129,271          |           
|Due After Ten Years                   |  | 1,002,116          |           
|                                      |  |                    |           
|                                      |  |                    |           
|                                      |  | 15,774,284         |           
|Mortgage Backed Securities            |  | 19,075,517         |           
|                                      |  |                    |           
|                                      |  |                    |           
|                                      |  | $                  | 34,849,801
|                                      |  |                    |           

Investment securities as of December 31, 2001 are summarized as
follows:



|2001                          |  |            | AmortizedCost |         | GrossUnrealizedGains |         | GrossUnrealizedLosses |            | FairValue |  
|----------------------------- |  | ---------- | ------------- | ------- | -------------------- | ------- | --------------------- | ---------- | --------- | -
|                              |  |            |               |         |                      |         |                       |            |           |  
|                              |  |            |               |         |                      |         |                       |            |          
|Securities Available for Sale |  |            |               |         |                      |         |                       |            |          
|                              |  |            |               |         |                      |         |                       |            |          
|U.S. Treasury                 |  | $          | 2,271,565     |         | $                    | 88,102  |                       | $          |          |  
|U.S. Government Agencies      |  |            |               |         |                      |         |                       |            |          
|Mortgage Backed               |  | 16,865,205 |               | 255,510 |                      | (3,022  | )                     | 17,117,693 |          
|Other                         |  | 9,717,328  |               | 456,872 |                      | (17,691 | )                     | 10,156,509 |          
|State, County and Municipal   |  | 6,250,887  |               | 143,867 |                      | (5,943  | )                     | 6,388,811  |          
|                              |  |            |               |         |                      |         |                       |            |          
|                              |  |            |               |         |                      |         |                       |            |          
|                              |  | $          | 35,104,985    |         | $                    | 944,351 |                       | $          | (26,656   | )
|                              |  |            |               |         |                      |         |                       |            |           |  
|Securities Held to Maturity   |  |            |               |         |                      |         |                       |            |          
|                              |  |            |               |         |                      |         |                       |            |          
|Other                         |  | $          | 9,708,006     |         | $                    |        |                       | $          |          |  
|State, County and Municipal   |  | 1,777,768  |               | 70,291  |                      |        |                       | 1,848,059  |          
|                              |  |            |               |         |                      |         |                       |            |          
|                              |  |            |               |         |                      |         |                       |            |          
|                              |  | $          | 11,485,774    |         | $                    | 70,291  |                       | $          |          |  
|                              |  |            |               |         |                      |         |                       |            |           |  

Proceeds from sales of investments in debt securities were $3,057,898 in
2002, $6,376,384 in 2001, and $3,593,007 in 2000. Gross realized gains totaled $135,802, $100,596 and $22,143 in 2002, 2001 and 2000, respectively. Gross realized losses totaled $0, $0 and $16,327 in 2002, 2001 and 2000, respectively.

Investment securities having a carrying value approximating $44,122,000 and $47,072,000 as of December 31, 2002 and 2001, respectively, were pledged to secure public deposits and for other
purposes.







---

(4)Loans

The composition of
loans as of December 31 are:



|                                                                        |  | 2002        |             | 2001        |  
|----------------------------------------------------------------------- |  | ----------- | ----------- | ----------- | -
|                                                                        |  |             |             |             |  
|Loans Secured by Real Estate                                            |  |             |             |             |  
|Construction and Land Development                                       |  | $           | 182,712,425 |             | $
|Secured by Farmland (Including Farm Residential and Other
Improvements) |  | 3,270,476   |             | 2,531,304   |  
|Secured by 1-4 Family Residential Properties                            |  | 55,360,469  |             | 49,049,237  |  
|Secured by Multifamily (5 or More) Residential Properties               |  | 1,149,114   |             | 786,312     |  
|Secured by Nonfarm Nonresidential Properties                            |  | 132,635,439 |             | 127,066,973 |  
|Loans to Deposit Institutions                                           |  | 20,297      |             | 25,098      |  
|Commercial and Industrial Loans (U.S. Addressees)                       |  | 42,612,972  |             | 42,086,401  |  
|Agricultural Loans                                                      |  | 1,449,197   |             | 1,990,428   |  
|Loans to Individuals for Household, Family and Other                    |  |             |             |             |  
|Personal Expenditures                                                   |  |             |             |             |  
|Credit Cards and Related Plans                                          |  | 374,960     |             | 383,993     |  
|Other                                                                   |  | 19,046,403  |             | 19,857,296  |  
|                                                                        |  |             |             |             |  
|                                                                        |  |             |             |             |  
|                                                                        |  | $           | 438,631,752 |             | $
|                                                                        |  |             |             |             |  

Loans by interest rate type are:



|              |  | 2002        |             | 2001        |  
|------------- |  | ----------- | ----------- | ----------- | -
|              |  |             |             |             |  
|              |  |             |             |             |  
|Fixed Rate    |  | $           | 225,527,059 |             | $
|Variable Rate |  | 213,104,693 |             | 147,206,364 |  
|              |  |             |             |             |  
|              |  |             |             |             |  
|              |  | $           | 438,631,752 |             | $
|              |  |             |             |             |  

Nonaccrual loans are loans for which principal and interest are doubtful
of collection in accordance with original loan terms and for which accruals of interest have been discontinued due to payment delinquency. Nonaccrual loans totaled $4,348,671 and $3,133,309 as of December 31, 2002 and 2001, respectively, and the
total recorded investment in loans past due ninety days or more and still accruing interest totaled approximately $0 and $295,000, respectively. Foregone interest on nonaccrual loans approximated $379,400 in 2002, $154,200 in 2001 and $146,400 in
2000.

Impaired loans included in total loans above as of December 31 are summarized as follows:



|                                        |  | 2002     |         | 2001    |  
|--------------------------------------- |  | -------- | ------- | ------- | -
|                                        |  |          |         |         |  
|                                        |  |          |         |         |  
|Total Investment in Impaired Loans      |  | $        | 927,808 |         | $
|Less Allowance for Impaired Loan Losses |  | (250,402 | )       | (69,607 | )
|                                        |  |          |         |         |  
|                                        |  |          |         |         |  
|Net Investment                          |  | $        | 677,406 |         | $
|                                        |  |          |         |         |  
|                                        |  |          |         |         |  
|Average Investment                      |  | $        | 675,971 |         | $
|                                        |  |          |         |         |  







---

(5)Allowance for Loan Losses

Transactions in the allowance for loan losses are summarized below for the years ended December 31:



|                                        |  | 2002       |           | 2001      |   | 2000      |  
|--------------------------------------- |  | ---------- | --------- | --------- | - | --------- | -
|                                        |  |            |           |           |   |           |  
|                                        |  |            |           |           |   |           |  
|Balance, Beginning                      |  | $          | 4,098,740 |           | $ | 3,002,536 |  
|Provision Charged to Operating Expenses |  | 2,603,133  |           | 1,911,929 |   | 1,292,006 |  
|Loans Charged Off                       |  | (1,447,079 | )         | (875,440  | ) | (685,739  | )
|Loan Recoveries                         |  | 224,714    |           | 59,715    |   | 69,089    |  
|                                        |  |            |           |           |   |           |  
|                                        |  |            |           |           |   |           |  
|Balance, Ending                         |  | $          | 5,479,508 |           | $ | 4,098,740 |  
|                                        |  |            |           |           |   |           |  

The allowance for loan losses presented above includes an allowance for
impaired loan losses. Transactions in the allowance for impaired loan losses were as follows:



|                                        |  | 2002    |         | 2001    |   | 2000   | 
|--------------------------------------- |  | ------- | ------- | ------- | - | ------ | 
|                                        |  |         |         |         |   |        | 
|                                        |  |         |         |         |   |        | 
|Balance, Beginning                      |  | $       | 69,607  |         | $ | 97,337 | 
|Provision Charged to Operating Expenses |  | 200,000 |         | 8,276   |   | 23,848 | 
|Loans Charged Off                       |  | (19,205 | )       | (36,726 | ) |       | 
|Loan Recoveries                         |  |        |         | 720     |   |       | 
|                                        |  |         |         |         |   |        | 
|                                        |  |         |         |         |   |        | 
|Balance, Ending                         |  | $       | 250,402 |         | $ | 69,607 | 
|                                        |  |         |         |         |   |        | 

(6)Premises and
Equipment

Premises and equipment are comprised of the following as of December 31:



|                                  |  | 2002       |            | 2001       |  
|--------------------------------- |  | ---------- | ---------- | ---------- | -
|                                  |  |            |            |            |  
|                                  |  |            |            |            |  
|Land                              |  | $          | 3,286,351  |            | $
|Building                          |  | 7,168,073  |            | 5,017,478  |  
|Leasehold Improvements            |  | 1,049,643  |            | 1,038,837  |  
|Furniture, Fixtures and Equipment |  | 7,018,163  |            | 6,036,304  |  
|Construction in Progress          |  | 278,156    |            | 1,161,688  |  
|                                  |  |            |            |            |  
|                                  |  |            |            |            |  
|                                  |  | 18,800,386 |            | 16,123,182 |  
|Accumulated Depreciation          |  | (5,690,197 | )          | (4,615,170 | )
|                                  |  |            |            |            |  
|                                  |  |            |            |            |  
|                                  |  | $          | 13,110,189 |            | $
|                                  |  |            |            |            |  

Depreciation charged to operations totaled $1,083,915 in 2002, $962,321
in 2001 and $800,381 in 2000.

Certain bank facilities are leased under various operating leases. Rental expense was $398,900 in 2002, $455,933 in 2001 and $245,275 in
2000.







---

(6)Premises and Equipment (Continued)

Future minimum rental commitments under noncancelable leases are:



|Year       |  |         | Amount    | 
|---------- |  | ------- | --------- | 
|           |  |         |           | 
|           |  |         |          
|2003       |  | $       | 216,083   | 
|2004       |  | 172,957 |          
|2005       |  | 141,225 |          
|2006       |  | 116,725 |          
|2007       |  | 108,525 |          
|Thereafter |  | 369,692 |          
|           |  |         |          
|           |  |         |          
|           |  | $       | 1,125,207 | 
|           |  |         |           | 

(7)Income
Taxes

The components of income tax expense for the years ended December 31 are as follows:



|                          |  | 2002      |           | 2001      |   | 2000      |  
|------------------------- |  | --------- | --------- | --------- | - | --------- | -
|                          |  |           |           |           |   |           |  
|                          |  |           |           |           |   |           |  
|Current Federal Expense   |  | $         | 3,102,923 |           | $ | 2,617,252 |  
|Deferred Federal Expense  |  | (456,647  | )         | (389,258  | ) | (155,369  | )
|                          |  |           |           |           |   |           |  
|                          |  |           |           |           |   |           |  
|                          |  | 2,646,276 |           | 2,227,994 |   | 1,643,014 |  
|Current State Tax Expense |  | 418,783   |           | 289,970   |   | 213,894   |  
|                          |  |           |           |           |   |           |  
|                          |  |           |           |           |   |           |  
|                          |  | $         | 3,065,059 |           | $ | 2,517,964 |  
|                          |  |           |           |           |   |           |  

Federal income tax expense of $2,646,276 in 2002, $2,227,994 in 2001 and
$1,643,014 in 2000 is less than the income taxes computed by applying the federal statutory rate of 34 percent to income before income taxes. The reasons for the differences are presented hereafter:



|                                     |  | 2002     |           | 2001     |   | 2000      |  
|------------------------------------ |  | -------- | --------- | -------- | - | --------- | -
|                                     |  |          |           |          |   |           |  
|                                     |  |          |           |          |   |           |  
|Statutory Federal Income Taxes       |  | $        | 2,832,476 |          | $ | 2,332,445 |  
|Tax-Exempt Interest                  |  | (124,833 | )         | (118,511 | ) | (140,585  | )
|Interest Expense Disallowance        |  | 8,171    |           | 13,520   |   | 21,980    |  
|Premiums on Officers Life Insurance |  | 898      |           | (2,629   | ) | (3,045    | )
|Meal and Entertainment Disallowance  |  | 18,576   |           | 12,978   |   | 8,387     |  
|Other                                |  | (89,012  | )         | (9,809   | ) | (58,016   | )
|                                     |  |          |           |          |   |           |  
|                                     |  |          |           |          |   |           |  
|Actual Federal Income Taxes          |  | $        | 2,646,276 |          | $ | 2,227,994 |  
|                                     |  |          |           |          |   |           |  



---

(7) Income Taxes (Continued)

The components of the net deferred tax asset
included in other assets in the accompanying balance sheets as of December 31 are as follows:



|                                                      |  | 2002      |           | 2001      |  
|----------------------------------------------------- |  | --------- | --------- | --------- | -
|                                                      |  |           |           |           |  
|Deferred Tax Assets                                   |  |           |           |           |  
|Allowance for Loan Losses                             |  | $         | 1,674,691 |           | $
|Georgia Occupation and License Tax Credits            |  | 53,581    |           | 53,581    |  
|Other Real Estate Owned                               |  | 242,465   |           | 47,280    |  
|Deferred Compensation                                 |  | 52,277    |           | 46,307    |  
|Other                                                 |  |          |           | 21,929    |  
|Valuation Allowance for Deferred Tax Assets           |  | (23,286   | )         | (23,286   | )
|                                                      |  |           |           |           |  
|                                                      |  |           |           |           |  
|                                                      |  | 1,999,728 |           | 1,330,115 |  
|                                                      |  |           |           |           |  
|Deferred Tax Liabilities                              |  |           |           |           |  
|Premises and Equipment                                |  | (417,294  | )         | (234,671  | )
|Securities Accretion                                  |  | (58,814   | )         | (58,839   | )
|Other                                                 |  | (41,821   | )         | (11,453   | )
|                                                      |  |           |           |           |  
|                                                      |  |           |           |           |  
|                                                      |  | (517,929  | )         | (304,963  | )
|                                                      |  |           |           |           |  
|                                                      |  | 1,481,799 |           | 1,025,152 |  
|Deferred Tax Liability on Unrealized Securities Gains |  | (457,393  | )         | (312,017  | )
|                                                      |  |           |           |           |  
|                                                      |  |           |           |           |  
|Net Deferred Tax Asset                                |  | $         | 1,024,406 |           | $
|                                                      |  |           |           |           |  

(8) Deposits

The aggregate amount of overdrawn deposit accounts reclassified as loan balances totaled $274,635 and $494,910 as of December 31, 2002 and 2001, respectively.

Components of interest-bearing deposits as of December 31 are as follows:



|                        |  | 2002        |             | 2001        |  
|----------------------- |  | ----------- | ----------- | ----------- | -
|                        |  |             |             |             |  
|                        |  |             |             |             |  
|Interest-Bearing Demand |  | $           | 99,601,540  |             | $
|Savings                 |  | 9,144,033   |             | 7,930,152   |  
|Time, $100,000 and Over |  | 81,181,188  |             | 85,521,894  |  
|Other Time              |  | 175,567,114 |             | 134,255,528 |  
|                        |  |             |             |             |  
|                        |  |             |             |             |  
|                        |  | $           | 365,493,875 |             | $
|                        |  |             |             |             |  

The aggregate amount of short-term jumbo certificates of deposit, each
with a minimum denomination of $100,000, approximated $67,967,000 and $70,852,000 on December 31, 2002 and 2001, respectively.







---

(8) Deposits (Continued)

As of December 31, 2002, the scheduled maturities of
certificates of deposit are as follows:



|Year                |  |            | Amount      | 
|------------------- |  | ---------- | ----------- | 
|                    |  |            |             | 
|                    |  |            |            
|2003                |  | $          | 212,544,603 | 
|2004                |  | 30,266,676 |            
|2005                |  | 8,355,594  |            
|2006                |  | 1,658,754  |            
|2007 and Thereafter |  | 3,922,675  |            
|                    |  |            |            
|                    |  |            |            
|                    |  | $          | 256,748,302 | 
|                    |  |            |             | 

Brokered deposits are third-party time deposits placed by or through the
assistance of a deposit broker. As of December 31, 2002 and 2001, the Company had $36,783,000 and $34,947,000, respectively, in brokered deposits. The brokered deposits were issued at a weighted average rate of 3.17 percent and mature at various
times through 2003.

(9) Federal Funds Purchased and Securities Sold Under Agreement to Repurchase

Securities sold under agreement to repurchase mature daily. Mortgage backed securities sold under repurchase agreements are held and segregated by the investment safekeeping agent. Investments are identified as subject to the repurchase
agreement and may be substituted by the Banks, subject to agreement by the buyer.

Information concerning securities sold under agreements to repurchase is summarized as
follows:



|                                          |  | 2002 |           | 2001 |  
|----------------------------------------- |  | ---- | --------- | ---- | -
|                                          |  |      |           |      |  
|                                          |  |      |           |      |  
|Average Balance During the Year           |  | $    | 6,486,392 |      | $
|Average Interest Rate During the Year     |  | 1.60 | %         | 3.36 | %
|Maximum Month-End Balance During the Year |  | $    | 8,744,472 |      | $

Mortgage backed securities underlying the
agreements as of December 31 are:



|                     |  | 2002 |           | 2001 |  
|-------------------- |  | ---- | --------- | ---- | -
|                     |  |      |           |      |  
|                     |  |      |           |      |  
|Carrying Value       |  | $    | 6,058,606 |      | $
|Estimated Fair Value |  |      | 6,094,301 |      |  







---

(10) Other Borrowed Money

Other borrowed money is comprised of the following
as of December 31:



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 2002       |            | 2001       |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------- | ---------- | ---------- | -
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |            |            |            |  
|Advances under the Blanket Agreement for Advances and Security Agreement with the
Federal Home Loan Bank (FHLB) have maturities in varying amounts through March 23, 2011 and interest rates ranging from 1.30 percent to 4.55 percent. Residential first mortgage loans and investment securities are pledged as collateral for the FHLB
advances. At December 31, 2002, the Company had credit availability totaling $106,830,000. Lending collateral value was $52,180,820, of which $8,930,820 was available.                                                           |  | $          | 43,250,000 |            | $
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |            |            |            |  
|Advances under the Warehouse Line with the FHLB have an interest rate of 1.80 percent. Loans held for
sale are pledged as collateral for the Warehouse Line. At December 31, 2002, the Company had available line of credit commitments totaling $40,000,000, of which $18,749,594 was available.                                                                                                                                                                                                                                                                           |  | 21,250,406 |            | 28,898,503 |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |            |            |            |  
|Advances under the line of credit with The Bankers Bank have an interest rate of
prime minus 100 basis points. All shares of stock owned by the Company in Security Bank of Bibb County and Security Bank of Houston County are pledged as collateral on the line of credit. The Company had available line of credit totaling
$14,000,000, of which $14,000,000 was available. Subsequent to year-end, the Company obtained a commitment from the Bankers Bank for an additional $3,000,000 under the line of credit with an interest rate of prime minus 50 basis points. |  |           |            | 5,999,694  |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |            |            |            |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |            |            |            |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | $          | 64,500,406 |            | $
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |            |            |            |  

Maturities of borrowed money for each of the next five years and
thereafter are as follows:



|Year       |  |            | Amount     | 
|---------- |  | ---------- | ---------- | 
|           |  |            |            | 
|           |  |            |           
|2003       |  | $          | 47,500,406 | 
|2004       |  | 7,000,000  |           
|2005       |  |           |           
|2006       |  |           |           
|Thereafter |  | 10,000,000 |           
|           |  |            |           
|           |  |            |           
|           |  | $          | 64,500,406 | 
|           |  |            |            | 







---

(11) Obligation Under Capital Lease

The Banks lease equipment with a lease
term through January 30, 2002. The obligation under the capital lease has been recorded in the accompanying consolidated financial statements at the present value of future minimum lease payments, discounted at an interest rate of 5.25 percent.
Capitalized cost of $267,917 less accumulated depreciation is included in premises and equipment on the consolidated balance sheets.

(12) Issuance of Trust Preferred
Securities

During the fourth quarter of 2002, the Company formed a subsidiary whose sole purpose was to issue $18,000,000 in Trust Preferred Securities through a pool
sponsored by FTN Financial Capital Markets. The Trust Preferred Securities have a maturity of 30 years and are redeemable after five years with certain exceptions. At December 31, 2002, the floating-rate securities had a 4.66 percent interest rate,
which will reset quarterly at the three-month LIBOR rate plus 3.25 percent. The Trust Preferred Securities are recorded as a liability on the balance sheets, but, subject to certain limitations, qualify as Tier 1 capital for regulatory capital
purposes. The proceeds from the offering were used to retire holding company debt and to fund the proposed acquisition of the Bank of Gray (see Note 24).

(13) 401(k) Savings
and Profit Sharing Plan

The Banks sponsor a 401(k) Savings Incentive and Profit Sharing Plan. Employees become eligible after having completed one year of service and
attaining the age of 21. Employer contributions to the plan include a discretionary matching contribution based on the salary reduction elected by the individual employees and a discretionary amount allocated based on compensation received by
eligible participants. Expense under the plan was $647,723 in 2002, $430,990 in 2001 and $219,194 in 2000.

(14) Commitments and Contingencies

In the normal course of business, certain commitments and contingencies are incurred which are not reflected in the consolidated financial statements. The Banks had commitments under standby letters
of credit to U.S. addressees approximating $2,120,000 as of December 31, 2002 and $1,664,000 as of December 31, 2001. Unfulfilled loan commitments as of December 31, 2002 and 2001 approximated $76,780,000 and $75,290,000, respectively. No losses are
anticipated as a result of commitments and contingencies.







---

(15) Stock Option Plans

During 1996, the board of directors of SNB Bancshares,
Inc. adopted the 1996 incentive stock option plan which authorizes 81,250 shares to be granted to certain officers and key employees. In May 1996, the board of directors granted key officers the right to purchase 81,250 shares of common stock at the
price of $9.00, as adjusted for stock splits, representing the market value of the stock at the date of the option grant. Option holders may exercise in accordance with a vesting schedule beginning with 20 percent the first year and increasing 20
percent for each year thereafter such that 100 percent of granted options may be exercised by the end of the fifth year. Unexercised options expire at the end of the tenth year.

In 1999, the board of directors of SNB Bancshares, Inc. adopted another incentive stock option plan which authorizes 125,000 shares to be granted to certain officers and key employees. Those officers and key employees are granted the right to
purchase shares of common stock at a price representing the market value of the stock at the date of the option grant. In May 1999, 73,500 options were granted at the price of $18.50 per share and an additional 10,000 options were granted at $17.94
per share in September 1999.

An additional 25,500 options were granted at $13.00 per share in August 2000 under this same plan. The terms of the 1999 incentive stock option plan
are essentially the same as the 1996 incentive stock option plan.

During the first quarter of 2002, the board of directors of SNB Bancshares, Inc. adopted a performance based
incentive stock option plan. Under this plan 105,000 options were granted in May 2002 at $19.51 per share, 7,500 were granted at $22.80 in November 2002, and an additional 5,000 options were granted at $23.50 in December 2002. The nonforfeitable
provisions for these options are two-tiered. Options in the first tier are nonforfeitable over three years based on a 12 percent increase in earnings per share over the base year diluted earnings per share of $1.03 each year. If the maximum diluted
earnings per share of $1.45 is reached during the three-year period, the nonforefeitable shares are doubled. Under the second tier, additional shares shall become nonforfeitable for two executive officers based on the same requirements except the
diluted earnings per share must increase 15 percent a year to a maximum of $1.57 during the three-year period. The first year of nonforfeiture for this plan is based on the Companys performance for 2001. One-third of the nonforfeitable options
vest on each anniversary of the stock option agreements.

A summary of option transactions follows:



|                                            |  | Shares UnderIncentive StockOptions |        
|------------------------------------------- |  | ---------------------------------- | -------
|                                            |  |                                    |        
|                                            |  |                                    |        
|Granted                                     |  |                                    | 307,750
|Canceled                                    |  | 22,750                             |        
|Exercised                                   |  | 10,250                             |        
|                                            |  |                                    |        
|                                            |  |                                    |        
|Outstanding, December 31, 2002              |  | 247,750                            |        
|                                            |  |                                    |        
|                                            |  |                                    |        
|Eligible to be Exercised, December 31, 2002 |  |                                    | 110,150
|                                            |  |                                    |        







---

(16) Interest Income and Expense

Interest income of $409,267, $359,162 and
$428,390 from state, county and municipal bonds was exempt from regular income taxes in 2002, 2001 and 2000, respectively.

Interest on deposits includes interest expense on time
certificates of $100,000 or more totaling $3,153,715, $4,316,110, and $2,102,875 for the years ended December 31, 2002, 2001 and 2000, respectively.

(17) Supplemental Cash
Flow Information

Cash payments for the following were made during the years ended December 31:



|                 |  | 2002 |            | 2001 |   | 2000       | 
|---------------- |  | ---- | ---------- | ---- | - | ---------- | 
|                 |  |      |            |      |   |            | 
|                 |  |      |            |      |   |            | 
|Interest Expense |  | $    | 13,050,849 |      | $ | 16,373,025 | 
|                 |  |      |            |      |   |            | 
|                 |  |      |            |      |   |            | 
|Income Taxes     |  | $    | 4,008,615  |      | $ | 2,648,200  | 
|                 |  |      |            |      |   |            | 

Noncash investing activities for the years ended December 31 are as
follows:



|                                                  |  | 2002    |           | 2001 |   | 2000      |  
|------------------------------------------------- |  | ------- | --------- | ---- | - | --------- | -
|                                                  |  |         |           |      |   |           |  
|                                                  |  |         |           |      |   |           |  
|Acquisitions of Real Estate Through Foreclosure   |  | $       | 526,496   |      | $ | 3,045,964 |  
|                                                  |  |         |           |      |   |           |  
|                                                  |  |         |           |      |   |           |  
|Acquisition, Net of Cash Acquired                 |  |         |           |      |   |           |  
|                                                  |  |         |           |      |   |           |  
|Common Stock Issued                               |  | $       |          |      | $ |          |  
|Cash Paid, Less Cash Acquired                     |  |        |           |     |   | 994,842   |  
|                                                  |  |         |           |      |   |           |  
|                                                  |  |         |           |      |   |           |  
|Fair Value of Assets Acquired, Including Goodwill |  | $       |          |      | $ |          |  
|                                                  |  |         |           |      |   |           |  
|                                                  |  |         |           |      |   |           |  
|Goodwill Resulting from Contingent Payment        |  |         |           |      |   |           |  
|                                                  |  |         |           |      |   |           |  
|Common Stock Issued                               |  | $       | 234,922   |      | $ |          |  
|Cash Paid                                         |  | 816,698 |           | $    |  |           | $
|                                                  |  |         |           |      |   |           |  
|                                                  |  |         |           |      |   |           |  
|Total Goodwill                                    |  | $       | 1,051,620 |      | $ |          |  
|                                                  |  |         |           |      |   |           |  







---

(18) Earnings Per Share

Statement of Financial Accounting Standards No. 128
establishes standards for computing and presenting basic and diluted earnings per share. Basic earnings per share is calculated and presented based on income available to common stockholders divided by the weighted average number of shares
outstanding during the reporting periods. Diluted earnings per share reflects the potential dilution that would occur if warrants and options were exercised and converted into common stock. The following presents earnings per share for the years
ended December 31, 2002, 2001 and 2000 under the requirements of Statement 128:



|December 31, 2002                                                                        |  |   | IncomeNumerator |        | CommonSharesDenominator |           | EPS |     
|---------------------------------------------------------------------------------------- |  | - | --------------- | ------ | ----------------------- | --------- | --- | ----
|                                                                                         |  |   |                 |        |                         |           |     |     
|                                                                                         |  |   |                 |        |                         |           |    
|Basic EPS                                                                                |  |   |                 |        |                         |           |    
|Income Available to Common Stockholders                                                  |  | $ | 5,265,754       |        |                         | 3,389,610 |     | $   
|                                                                                         |  |   |                 |        |                         |           |     |     
|                                                                                         |  |   |                 |        |                         |           |    
|Dilutive Effect of Potential Common Stock                                                |  |   |                 |        |                         |           |    
|Stock Options and Warrants                                                               |  |   |                 | 66,636 |                         |           |    
|                                                                                         |  |   |                 |        |                         |           |    
|                                                                                         |  |   |                 |        |                         |           |    
|Diluted EPS                                                                              |  |   |                 |        |                         |           |    
|Income Available to Common Stockholders After Assumed Conversions of Dilutive
Securities |  | $ | 5,265,754       |        | 3,456,246               |           | $   | 1.52
|                                                                                         |  |   |                 |        |                         |           |     |     
|                                                                                         |  |   |                 |        |                         |           |    
|December 31, 2001                                                                        |  |   |                 |        |                         |           |    
|                                                                                         |  |   |                 |        |                         |           |    
|Basic EPS                                                                                |  |   |                 |        |                         |           |    
|Income Available to Common Stockholders                                                  |  | $ | 4,342,168       |        | 3,372,969               |           | $   | 1.29
|                                                                                         |  |   |                 |        |                         |           |     |     
|                                                                                         |  |   |                 |        |                         |           |    
|Dilutive Effect of Potential Common Stock                                                |  |   |                 |        |                         |           |    
|Stock Options and Warrants                                                               |  |   |                 | 3,082  |                         |           |    
|                                                                                         |  |   |                 |        |                         |           |    
|                                                                                         |  |   |                 |        |                         |           |    
|Diluted EPS                                                                              |  |   |                 |        |                         |           |    
|Income Available to Common Stockholders After Assumed Conversions of
Dilutive Securities |  | $ | 4,342,168       |        | 3,376,051               |           | $   | 1.29
|                                                                                         |  |   |                 |        |                         |           |     |     
|                                                                                         |  |   |                 |        |                         |           |    
|December 31, 2000                                                                        |  |   |                 |        |                         |           |    
|                                                                                         |  |   |                 |        |                         |           |    
|Basic EPS                                                                                |  |   |                 |        |                         |           |    
|Income Available to Common Stockholders                                                  |  | $ | 3,479,247       |        | 3,354,145               |           | $   | 1.04
|                                                                                         |  |   |                 |        |                         |           |     |     
|                                                                                         |  |   |                 |        |                         |           |    
|Dilutive Effect of Potential Common Stock                                                |  |   |                 |        |                         |           |    
|Stock Options and Warrants                                                               |  |   |                 | 14,632 |                         |           |    
|                                                                                         |  |   |                 |        |                         |           |    
|                                                                                         |  |   |                 |        |                         |           |    
|Diluted EPS                                                                              |  |   |                 |        |                         |           |    
|Income Available to Common Stockholders                                                  |  |   |                 |        |                         |           |    
|After Assumed Conversions of Dilutive Securities                                         |  | $ | 3,479,247       |        |                         | 3,368,777 |     | $   
|                                                                                         |  |   |                 |        |                         |           |     |     



---

(18) Earnings Per Share (Continued)

Effective January 1, 2002, the Company
adopted the fair value method of recording stock-based compensation contained in SFAS No. 123,Accounting for Stock-Based Compensation, which is considered the preferable accounting method for
stock-based employee compensation. Historically the Company had applied the intrinsic value method permitted under SFAS No. 123, as defined in Accounting Principles Board Opinion No. 25,Accounting for Stock Issued to
Employees, in accounting for stock-based compensation plans. Accordingly, no compensation expense has been recognized for the Companys stock option plans in the past. In adopting SFAS 123, the Company is allowed to
choose from three alternative transition methods. The Company elected to apply SFAS 123 prospectively to all new awards. Accordingly, stock option expense totaling $45,373 as of December 31, 2002 was recorded to Salaries and Employee Benefits.
Stock-based compensation awards granted in previous years will continue to be accounted for under Opinion 25. If compensation expense for these awards were determined on the basis of SFAS 123, net income and earnings per share would have been
reduced as shown in the proforma information presented hereafter.



|                           |  | 2002 |           | 2001 |  
|-------------------------- |  | ---- | --------- | ---- | -
|                           |  |      |           |      |  
|Net Income                 |  |      |           |      |  
|As Reported                |  | $    | 5,265,754 |      | $
|                           |  |      |           |      |  
|                           |  |      |           |      |  
|Proforma                   |  | $    | 5,159,856 |      | $
|                           |  |      |           |      |  
|                           |  |      |           |      |  
|                           |  |      |           |      |  
|Basic Earnings Per Share   |  |      |           |      |  
|As Reported                |  | $    | 1.55      |      | $
|                           |  |      |           |      |  
|                           |  |      |           |      |  
|Proforma                   |  | $    | 1.52      |      | $
|                           |  |      |           |      |  
|                           |  |      |           |      |  
|Diluted Earnings Per Share |  |      |           |      |  
|As Reported                |  | $    | 1.52      |      | $
|                           |  |      |           |      |  
|                           |  |      |           |      |  
|Proforma                   |  | $    | 1.49      |      | $
|                           |  |      |           |      |  

Proforma information includes only the effects of incentive stock option
awards which were granted in May 1996, May 1999, September 1999 and August 2000.

Proforma information is based on utilization of the Black-Scholes option pricing model to
estimate the fair value of the options at the grant date. Significant assumptions used are:



|Under Incentive Stock Option Plans Established In     |  |         | 1999  |         | 1996 |        
|----------------------------------------------------- |  | ------- | ----- | ------- | ---- | -------
|                                                      |  |         |       |         |      |        
|Year Granted                                          |  | 2000    |       | 1999    |      | 1996   
|                                                      |  |         |       |         |      |        
|                                                      |  |         |       |         |      |        
|Expected Annual Dividends (As Percent of Stock Price) |  |         | 2.12  | %       |      | 1.63   
|Discount Rate-Bond Equivalent Yield                   |  | 5.44    | %     | 6.48    | %    | 6.34   
|Expected Life                                         |  | 5 Years |       | 5 Years |      | 5 Years
|Expected Cumulative Volatility                        |  |         | 29.38 | %       |      | 70.95  



---

(19) Related Party Transactions

The aggregate balance of direct and indirect
loans to directors, executive officers or principal holders of equity securities of the Company was $21,441,430 as of December 31, 2002 and $21,015,621 as of December 31, 2001. All such loans 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 do not involve more than a normal risk of collectibility. A summary of activity of related party loans is presented
hereafter.



|                   |  | 2002        |            | 2001       |  
|------------------ |  | ----------- | ---------- | ---------- | -
|                   |  |             |            |            |  
|Balance, Beginning |  | $           | 21,015,621 |            | $
|New Loans          |  | 40,119,012  |            | 20,707,356 |  
|Repayments         |  | (39,693,203 | )          | (9,128,993 | )
|                   |  |             |            |            |  
|                   |  |             |            |            |  
|Balance, Ending    |  | $           | 21,441,430 |            | $
|                   |  |             |            |            |  

Deposits from related parties held by the Company at December 31, 2002
and 2001 totaled $12,000,000 and $14,000,000, respectively.

Fairfield Financial Services, Inc. originated $450,000 in mortgage loans to related parties during 2002. The loans
were then sold to a third-party investor before the 2002 year-end.

During 2001, Security Bank of Bibb County purchased land for $736,000 from one director to build the new
corporate center. The board of directors unanimously approved the purchase, with the one director involved in the transaction abstaining.

As a result of the purchase of assets of
Group Financial Southeast in 2001, Fairfield Financial Services, Inc. leases office space from a director. Payments made under the lease agreements totaled $76,800 and $113,568 as of December 31, 2002 and 2001, respectively.







---

(20) Financial Information of SNB Bancshares, Inc. (Parent Only)

SNB
Bancshares, Inc. (the parent company) was formed as a one-bank holding company from Security Bank of Bibb County in September 1994. The parent companys balance sheets as of December 31, 2002 and 2001 and the related statements of income and
comprehensive income and cash flows for the years then ended are as follows:

SNB BANCSHARES, INC. (PARENT ONLY)BALANCE
SHEETSDECEMBER 31



|                                                                                                                                                                       |  | 2002       |            | 2001       |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------- | ---------- | ---------- | -
|                                                                                                                                                                       |  |            |            |            |  
|                                                                                                                                                                       |  |            |            |            |  
|ASSETS                                                                                                                                                                 |  |            |            |            |  
|Cash                                                                                                                                                                   |  | $          | 8,381,296  |            | $
|Bank Premises and Equipment, Net                                                                                                                                       |  | 178,345    |            |           |  
|Investment in Subsidiaries, at Equity                                                                                                                                  |  | 49,316,060 |            | 39,700,593 |  
|Prepaids                                                                                                                                                               |  | 63,240     |            | 6,248      |  
|Trust Preferred Placement Fee, Net                                                                                                                                     |  | 448,750    |            |           |  
|Income Tax Benefit                                                                                                                                                     |  | 81,705     |            |           |  
|Other                                                                                                                                                                  |  | 19,775     |            | 2,103      |  
|                                                                                                                                                                       |  |            |            |            |  
|                                                                                                                                                                       |  |            |            |            |  
|Total Assets                                                                                                                                                           |  | $          | 58,489,171 |            | $
|                                                                                                                                                                       |  |            |            |            |  
|                                                                                                                                                                       |  |            |            |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                   |  |            |            |            |  
|                                                                                                                                                                       |  |            |            |            |  
|Liabilities                                                                                                                                                            |  |            |            |            |  
|Federal Income Tax Payable                                                                                                                                             |  | $          |           |            | $
|State Income Tax Payable                                                                                                                                               |  | 72,568     |            | 12,727     |  
|Interest Payable                                                                                                                                                       |  | 30,874     |            |           |  
|Other                                                                                                                                                                  |  | 280,506    |            | 38,597     |  
|                                                                                                                                                                       |  |            |            |            |  
|                                                                                                                                                                       |  |            |            |            |  
|                                                                                                                                                                       |  | 383,948    |            | 111,452    |  
|                                                                                                                                                                       |  |            |            |            |  
|                                                                                                                                                                       |  |            |            |            |  
|Other Borrowed Money                                                                                                                                                   |  |           |            | 5,999,694  |  
|                                                                                                                                                                       |  |            |            |            |  
|                                                                                                                                                                       |  |            |            |            |  
|Subordinated Debt                                                                                                                                                      |  | 18,557,000 |            |           |  
|                                                                                                                                                                       |  |            |            |            |  
|                                                                                                                                                                       |  |            |            |            |  
|Stockholders Equity                                                                                                                                                   |  |            |            |            |  
|Common Stock, Par Value $1 a Share; Authorized 10,000,000 Shares, Issued and Outstanding 3,398,317
and 3,372,969 Shares as of December 31, 2002 and 2001, Respectively |  | 3,398,317  |            | 3,372,
699 |  
|Paid-In Capital                                                                                                                                                        |  | 13,352,595 |            | 12,967,398 |  
|Retained Earnings                                                                                                                                                      |  | 21,909,432 |            | 17,831,346 |  
|Accumulated Other Comprehensive Income, Net of Tax                                                                                                                     |  | 887,879    |            | 605,679    |  
|                                                                                                                                                                       |  |            |            |            |  
|                                                                                                                                                                       |  |            |            |            |  
|Total Stockholders Equity                                                                                                                                             |  | 39,548,223 |            | 34,777,392 |  
|                                                                                                                                                                       |  |            |            |            |  
|                                                                                                                                                                       |  |            |            |            |  
|Total Liabilities and Stockholders Equity                                                                                                                             |  | $          | 58,489,171 |            | $
|                                                                                                                                                                       |  |            |            |            |  







---

(20) Financial Information of SNB Bancshares, Inc. (Parent Only) (Continued)

SNB BANCSHARES, INC. (PARENT ONLY)STATEMENTS OF INCOME AND COMPREHENSIVE INCOMEFOR THE YEARS ENDED DECEMBER 31



|                                                                               |  | 2002       |           | 2001      |   | 2000      |  
|------------------------------------------------------------------------------ |  | ---------- | --------- | --------- | - | --------- | -
|                                                                               |  |            |           |           |   |           |  
|                                                                               |  |            |           |           |   |           |  
|Income                                                                         |  |            |           |           |   |           |  
|Dividends from Subsidiaries                                                    |  | $          | 427,254   |           | $ | 1,287,522 |  
|Interest                                                                       |  |           |           | 44,120    |   | 29,780    |  
|                                                                               |  |            |           |           |   |           |  
|                                                                               |  |            |           |           |   |           |  
|                                                                               |  | 427,254    |           | 1,331,642 |   | 29,780    |  
|                                                                               |  |            |           |           |   |           |  
|                                                                               |  |            |           |           |   |           |  
|Expense                                                                        |  |            |           |           |   |           |  
|Salaries and Employee Benefits                                                 |  | 599,991    |           |          |   |          |  
|Occupancy and Equipment                                                        |  | 18,894     |           |          |   |          |  
|Interest                                                                       |  | 310,204    |           | 231,277   |   |          |  
|Other                                                                          |  | 538,402    |           | 278,602   |   | 281,476   |  
|                                                                               |  |            |           |           |   |           |  
|                                                                               |  |            |           |           |   |           |  
|                                                                               |  | 1,467,491  |           | 509,879   |   | 281,476   |  
|                                                                               |  |            |           |           |   |           |  
|                                                                               |  |            |           |           |   |           |  
|Income (Loss) Before Taxes andEquity in
Undistributed Earnings of Subsidiaries |  | (1,040,237 | )         | 821,763   |   | (251,696) |  
|                                                                               |  |            |           |           |   |           |  
|Income Tax Benefit                                                             |  | 529,725    |           | 174,360   |   | 61,261    |  
|                                                                               |  |            |           |           |   |           |  
|                                                                               |  |            |           |           |   |           |  
|Income (Loss) Before Equity in UndistributedEarnings of Subsidiaries           |  | (510,512   | )         | 996,123   |   | (190,435  | )
|                                                                               |  |            |           |           |   |           |  
|Equity in Undistributed Earnings of Subsidiaries                               |  | 5,776,266  |           | 3,346,045 |   | 3,669,682 |  
|                                                                               |  |            |           |           |   |           |  
|                                                                               |  |            |           |           |   |           |  
|Net Income                                                                     |  | 5,265,754  |           | 4,342,168 |   | 3,479,247 |  
|                                                                               |  |            |           |           |   |           |  
|                                                                               |  |            |           |           |   |           |  
|Other Comprehensive Income, Net of Tax                                         |  |            |           |           |   |           |  
|Gains on Securities Arising During the Year                                    |  | 371,829    |           | 457,645   |   | 657,964   |  
|Reclassification Adjustment                                                    |  | (89,629    | )         | (47,464   | ) | (3,839    | )
|                                                                               |  |            |           |           |   |           |  
|                                                                               |  |            |           |           |   |           |  
|Unrealized Gains on Securities                                                 |  | 282,200    |           | 410,181   |   | 654,125   |  
|                                                                               |  |            |           |           |   |           |  
|                                                                               |  |            |           |           |   |           |  
|Comprehensive Income                                                           |  | $          | 5,547,954 |           | $ | 4,752,349 |  
|                                                                               |  |            |           |           |   |           |  







---

(20) Financial Information of SNB Bancshares, Inc. (Parent Only) (Continued)

SNB BANCSHARES, INC. (PARENT ONLY)STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED DECEMBER 31



|                                                  |  | 2002       |           | 2001       |   | 2000       |  
|------------------------------------------------- |  | ---------- | --------- | ---------- | - | ---------- | -
|                                                  |  |            |           |            |   |            |  
|Cash Flows from Operating Activities              |  |            |           |            |   |            |  
|Net Income                                        |  | $          | 5,265,754 |            | $ | 4,342,168  |  
|Adjustments to Reconcile Net Income to Net        |  |            |           |            |   |            |  
|Cash Provided (Used) by Operating Activities      |  |            |           |            |   |            |  
|Deferred Income Taxes                             |  | 4,378      |           |           |   |           |  
|Depreciation                                      |  | 16,607     |           |           |   |           |  
|Stock Option Expense                              |  | 45,373     |           |           |   |           |  
|Equity in Undistributed Earningsof Subsidiaries   |  | (5,776,266 | )         | (3,346,045 | ) | (3,669,682 | )
|Gain on Sale of Investments                       |  |           |           | (28,680    | ) |           |  
|Increase in Other                                 |  | (337,002   | )         | 49,175     |   | 31,488     |  
|                                                  |  |            |           |            |   |            |  
|                                                  |  |            |           |            |   |            |  
|                                                  |  | (781,156   | )         | 1,016,618  |   | (158,947   | )
|                                                  |  |            |           |            |   |            |  
|                                                  |  |            |           |            |   |            |  
|Cash Flows from Investing Activities              |  |            |           |            |   |            |  
|Investment in Statutory Trust                     |  | (557,000   | )         |           |   |           |  
|Capital Infusion in Subsidiaries                  |  | (3,000,000 | )         | (4,000,000 | ) | (5,000,000 | )
|Purchase of Premises and Equipment                |  | (194,952   | )         |           |   |           |  
|Proceeds from Disposition ofInvestment Securities |  |           |           | 816,000    |   |           |  
|                                                  |  |            |           |            |   |            |  
|                                                  |  |            |           |            |   |            |  
|                                                  |  | (3,751,952 | )         | (3,184,000 | ) | (5,000,000 | )
|                                                  |  |            |           |            |   |            |  
|                                                  |  |            |           |            |   |            |  
|Cash Flows from Financing Activities              |  |            |           |            |   |            |  
|Dividends Paid                                    |  | (1,187,668 | )         | (1,045,620 | ) | (923,200   | )
|Issuance of Common Stock                          |  | 365,172    |           |           |   | 388,140    |  
|Note Payable                                      |  | (5,999,694 | )         | 3,999,694  |   | 2,000,000  |  
|Subordinated Debt                                 |  | 18,557,000 |           |           |   |           |  
|                                                  |  |            |           |            |   |            |  
|                                                  |  |            |           |            |   |            |  
|                                                  |  | 11,734,810 |           | 2,954,074  |   | 1,464,940  |  
|                                                  |  |            |           |            |   |            |  
|                                                  |  |            |           |            |   |            |  
|Net Increase (Decrease) in Cash                   |  | 7,201,702  |           | 786,692    |   | (3,694,007 | )
|                                                  |  |            |           |            |   |            |  
|Cash, Beginning                                   |  | 1,179,594  |           | 392,902    |   | 4,086,909  |  
|                                                  |  |            |           |            |   |            |  
|                                                  |  |            |           |            |   |            |  
|Cash, Ending                                      |  | $          | 8,381,296 |            | $ | 1,179,594  |  
|                                                  |  |            |           |            |   |            |  







---

(21) Fair Value of Financial Instruments

Statement of Financial Accounting
Standards (SFAS) No. 107,Disclosures about Fair Value of Financial Instruments,requires disclosure of fair value information about financial instruments, whether or not recognized on the face of the
balance sheet, for which it is practicable to estimate that value. The assumptions used in the estimation of the fair value of SNB Bancshares 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 Short-Term Investments- For cash, due from banks and federal funds sold, the carrying amount is a reasonable
estimate of fair value.

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

Loans- 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.

Loans Held for Sale- The fair value for loans held for sale is determined on the basis of open commitments from independent buyers for committed loans.

Deposit Liabilities- The fair value of demand deposits, savings accounts and certain money market deposits is the amount payable on demand at the reporting date. The fair value of fixed
maturity certificates of deposit is estimated by discounting the future cash flows using the rates currently offered for deposits of similar remaining maturities.

Standby Letters of Credit- Because standby letters of credit are made using variable rates, the contract value is a reasonable estimate of fair value.

The carrying amount and estimated fair values of the Companys financial instruments as of December 31 are as follows:



|                                         |  | 2002           |        | 2001                |  
|---------------------------------------- |  | -------------- | ------ | ------------------- | -
|                                         |  |                |        |                     |  
|                                         |  | CarryingAmount |        | EstimatedFair Value |  
|                                         |  |                |        |                     |  
|                                         |  |                |        | (in Thousands)      |  
|Assets                                   |  |                |        |                     |  
|Cash and Short-Term Investments          |  | $              | 29,940 |                     | $
|Interest-Bearing Deposits                |  | 355            |        | 355                 |  
|Investment Securities Available for Sale |  | 36,195         |        | 36,195              |  
|Investment Securities Held to Maturity   |  | 14,096         |        | 14,200              |  
|Federal Home Loan Bank Stock             |  | 3,614          |        | 3,614               |  
|Loans                                    |  | 438,632        |        | 447,004             |  
|Loans Held for Sale                      |  | 35,955         |        | 36,330              |  
|                                         |  |                |        |                     |  
|Liabilities                              |  |                |        |                     |  
|Deposits                                 |  | 440,633        |        | 443,293             |  
|Borrowed Money                           |  | 77,753         |        | 79,409              |  
|Capital Lease Obligation                 |  |               |        |                    |  
|Trust Preferred Securities               |  | 18,000         |        | 18,000              |  
|                                         |  |                |        |                     |  
|Unrecognized Financial Instruments       |  |                |        |                     |  
|Standby Letters of Credit                |  |               |        | 2,120               |  
|Unfulfilled Loan Commitments             |  |                |       |                     |  



---

(21) Fair Value of Financial Instruments (Continued)

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 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, brokerage network, 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.

(22) Regulatory Capital Matters

The amount of dividends payable to the parent company from the subsidiary banks is limited by various banking regulatory agencies. Upon approval by regulatory authorities, the bank may pay
cash dividends to the parent company in excess of regulatory limitations.

The Company is subject to various regulatory capital requirements administered by the federal banking
agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Companys financial statements.
Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Companys assets, liabilities and certain off-balance sheet
items as calculated under regulatory accounting practices. The Companys capital amounts and classification 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 to maintain minimum amounts and ratios of total and Tier I capital to risk-weighted assets, and of Tier I
capital to average assets. The amounts and ratios as defined in regulations are presented hereafter. Management believes, as of December 31, 2002, the Company meets all capital adequacy requirements to which it is subject and is classified as well
capitalized under the regulatory framework for prompt corrective action. In the opinion of management, there are no conditions or events since prior notification of capital adequacy from the regulators that have changed the institutions
category.







---

(22) Regulatory Capital Matters (Continued)



|                                       |  | Actual     |            | For CapitalAdequacy Purposes |  | To Be WellCapitalized UnderPrompt
CorrectiveAction Provisions |  
|-------------------------------------- |  | ---------- | ---------- | ---------------------------- |  | ------------------------------------------------------------- | -
|                                       |  |            |            |                              |  |                                                               |  
|                                       |  | Amount     |            | Ratio                        |  | Amount                                                        |  
|                                       |  |            |            |                              |  |                                                               |  
|As of December 31, 2002                |  |            |            |                              |  |                                                               |  
|                                       |  |            |            |                              |  |                                                               |  
|Total Capital to Risk-Weighted Assets  |  | $          | 60,240,079 |                              |  | 12.74                                                         | %
|Tier I Capital to Risk-Weighted Assets |  | 46,647,626 |            | 9.87                         |  | 18,912,195                                                    |  
|Tier I Capital to Average Assets       |  | 46,647,626 |            | 8.51                         |  | 21,937,089                                                    |  
|                                       |  |            |            |                              |  |                                                               |  
|As of December 31, 2001                |  |            |            |                              |  |                                                               |  
|                                       |  |            |            |                              |  |                                                               |  
|Total Capital to Risk-Weighted Assets  |  | 37,422,298 |            | 9.00                         |  | 33,225,619                                                    |  
|Tier I Capital to Risk-Weighted Assets |  | 33,323,558 |            | 8.02                         |  | 16,612,809                                                    |  
|Tier I Capital to Average Assets       |  |            | 33,323,558 |                              |  | 7.66                                                          |  

Capital ratios for each of the Companys subsidiaries are as
follows:



|                                 |  | RegulatoryRequirement |     | Security Bank ofBibb CountyDecember
31 |  | Security Bank ofHouston CountyDecember
31 |  
|-------------------------------- |  | --------------------- | --- | -------------------------------------- |  | ----------------------------------------- | -
|                                 |  |                       |     |                                        |  |                                           |  
|                                 |  | Minimum               |     | WellCapitalized                        |  | 2002                                      |  
|                                 |  |                       |     |                                        |  |                                           |  
|                                 |  |                       |     |                                        |  |                                           |  
|Total Risk Based Capital Ratio   |  |                       | 8.0 | %                                      |  | 10.0                                      | %
|Tier 1 Capital Ratio             |  | 4.0                   |     | 6.0                                    |  | 9.25                                      |  
|Tier 1 Capital to Average Assets |  |                       | 4.0 |                                        |  | 5.0                                       |  

(23) Business Combinations

On July 31, 2000, Security Bank of Bibb County purchased the assets of Group Financial Southeast (dba Fairfield Financial) in a business combination accounted for as a purchase. The assets
were placed in a newly formed subsidiary of Security Bank of Bibb County incorporated as Fairfield Financial Services, Inc. Fairfield Financial is primarily engaged in residential real estate mortgage lending in the state of Georgia. The results of
operations of Fairfield Financial since the date of acquisition are included in the accompanying financial statements. The initial purchase price approximated $1.4 million, which consists of approximately $1.0 million in cash and 32,345 shares of
SNB Bancshares stock valued at $388,140 at closing. The initial cost of the acquisition exceeded the fair value of the assets of Fairfield Financial by $988,000. The excess is recorded as goodwill and was amortized on the straight-line method over
10 years through December 31, 2001. As a result of the issuance of SFAS No. 142, the goodwill is no longer amortized but is reviewed annually for impairment.







---

(23) Business Combinations (Continued)

The Asset Purchase Agreement provides
for additional contingent payments of purchase price for years ending December 31, 2002 through 2005 based on the earnings of Fairfield Financial Services, Inc. The additional payments, if any, are to be payable in cash and stock. Cash payments for
2002 will equate to 60 percent of Fairfield Financial Services, Inc.s earnings for the year. Stock payments for 2002 will be based on 40 percent of 2002 earnings utilizing a specific formula for determining number of shares. The number of
shares issued during any year cannot exceed 75,000. The maximum number of shares under the agreement cannot exceed 300,000 for years 2002-2005. All additional payments of cash and stock will be charged to goodwill. If Fairfield Financial sustains
losses, no additional purchase price payments are due. The contingent payment due in 2003 as a result of 2002 earnings is a combination of cash and stock approximating $2,000,000.

On October 25, 2002, SNB Bancshares, Inc. executed a definitive agreement to acquire all outstanding shares of the Bank of Gray located in Gray (Jones County), Georgia. The stockholders of the Bank of Gray will receive $15,000,000 in cash and
1,571,000 common shares of the Company in a business combination accounted for as a purchase. As of December 31, 2002 the Bank of Gray has total assets and deposits approximating $234,000,000 and $209,000,000, respectively. The acquisition is
subject to stockholder and regulatory approvals.

(24) Deferred Compensation Plan

A deferred
compensation plan is maintained under which certain officers may elect to defer, until termination, retirement, death or unforeseeable emergency a portion of current compensation. The plan is created in accordance with Internal Revenue Code Section
457. Interest is paid on such deferrals at a rate that is determined annually. The participants are general creditors of the Bank with respect to amounts deferred and interest additions. As of December 31, 2002, 2001 and 2000, the liability under
this plan totaled $153,756, $136,196 and $119,985, respectively.