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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-KSB

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                     FOR THE PERIOD ENDED DECEMBER 31, 1996


Commission File Number:  33-28514-A
                         ----------

                         BRYAN BANCORP OF GEORGIA, INC.
 -------------------------------------------------------------------------------
        (exact name of small business issuer as specified in its charter)

           GEORGIA                                        58-1835646
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


9971 Ford Avenue, Richmond Hill, Georgia                    31324
----------------------------------------    ------------------------------------
(Address of principal executive offices)                  (Zip code)

                                 (912) 756-4444
 -------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

  Securities registered pursuant to Section 12(b) of the Exchange Act of 1934:
                                      None
                                   ----------

  Securities registered pursuant to Section 12(g) of the Exchange Act of 1934:
                                      None
                                   ----------

Check whether the  registrant (1) filed all reports to be filed by section 13 or
15(d) of the  Securities  Exchange Act of 1934 during the past 12 months (or for
such shorter period that the registrant was required to file such reports),  and
(2) has been subject to such filing requirements for the past 90 days.

              Yes    X                                No
                   -----                                  -----

Check if there is no disclosure of delinquent  filers in response to item 405 of
regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.

              Yes    X                                No
                   -----                                  -----

The issuer's revenues for its last fiscal year were $5,375,567

The  aggregate  market  value  of the  common  stock of the  registrant  held by
nonaffiliates  (260,439 shares) on March 18, 1997 was  approximately  $4,948,341
(based on a per share price of $19 which is an estimate price since the stock is
not listed,  not actively  traded,  and  transactions are conducted on a private
basis.

State the number of shares outstanding of each issuer's classes of common stock,
as of the latest practicable date:

                       504,558 shares as of March 18, 1997
                       -----------------------------------

                      DOCUMENTS INCORPORATED BY REFERENCE:
                                      None
                                   ----------

Transitional Small Business Disclosure Format:
              Yes                                     No    X
                   -----                                  -----
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                                       2



                                     PART I




Item I.  Business.
------------------


History and Organization

Bryan  Bancorp of Georgia,  Inc. (the  "Company")  is a registered  bank holding
company under the federal Bank Holding Act of 1956, as amended, and owns 100% of
the outstanding capital stock of Bryan Bank & Trust, Richmond Hill, Georgia (the
"Bank").  The Company was incorporated under the laws of the State of Georgia on
March 6, 1989 to  enhance  the Bank's  ability  to serve its  future  customers'
requirements  for financial  services.  The holding company  structure  provides
flexibility for expansion of the Company's banking business through  acquisition
of other  financial  institutions  and provision of  additional  banking-related
services  which the  traditional  commercial  bank may not provide under present
laws.

The Bank  commenced  operations  on December  27,  1989 in a permanent  facility
located  on Ford  Avenue in  Richmond  Hill,  Georgia.  This 8,700  square  foot
facility is owned by the Bank.

The Bank is a full service  commercial  bank,  without  trust  powers.  The Bank
offers a full range of  interest  bearing  and  non-interest  bearing  accounts,
including   commercial  and  retail  checking  accounts,   negotiable  order  of
withdrawal ("NOW") accounts,  super NOW accounts,  public funds accounts,  money
market  accounts,   individual  retirement  accounts,  regular  interest-bearing
savings accounts,  certificates of deposit, business accounts, commercial loans,
real estate loans and consumer/installment loans.


Market Area and Competition

The primary service area for the Bank encompasses  approximately 60 square miles
in the Richmond Hill area of Bryan  County,  Georgia  including  that portion of
Bryan County south of Fort Stewart  extending  south to the northern  portion of
Liberty County and the southern fringes of Chatham County, Georgia.

There  is  only  one  banking  facility,   a  branch  office  of  a  state  bank
headquartered  in Bryan County,  which is located in the Bank's primary  service
area. However, the Bank is in competition with many statewide and regional banks
having  offices  immediately  north of the Bank's  primary  service  area in the
adjoining  Metropolitan Savannah area, as well as savings and loan associations,
insurance companies, consumer finance companies, brokerage houses, credit unions
and other business entities located in Chatham County,  which have recently been
invading the traditional banking markets.


Asset/Liability Management

It is the  objective of the Bank to manage assets and  liabilities  to provide a
satisfactory,   consistent  level  of  profitability  within  the  framework  of
established cash, loan, investment,  borrowing and capital policies.  Certain of
the officers of the Bank are responsible for monitoring  policies and procedures
that are designed to ensure acceptable  composition of the assets/liability mix,
stability and leverage of all sources of funds while adhering to prudent banking
practices.  It is the overall  philosophy  of management to support asset growth
primarily  through  growth  of core  deposits,  which  include  deposits  of all
categories made by individuals, partnerships and corporations. Management of the
Bank seeks to invest the  largest  portion of the Bank's  assets in  commercial,
consumer and real estate loans.


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The Bank's  asset/liability mix is monitored on a regular basis with a quarterly
report reflecting  interest-sensitive assets and interest-sensitive  liabilities
being prepared and presented to the Bank's Board of Directors,  The objective of
this policy is to control  interest-sensitive  assets and  liabilities  so as to
minimize the impact of  substantial  movements  in interest  rates on the Bank's
earnings.


Correspondent Banking

Correspondent  banking involves the provision of services by one bank to another
bank which cannot  provide that service for itself from an economic or practical
standpoint.  The Bank is required to purchase  correspondent services offered by
larger banks,  including check collections,  purchase of Federal Funds, security
safekeeping,  investment  services,  coin and  currency  supplies,  overline and
liquidity  loan  participations,  and sales of loans to or  participations  with
correspondent banks.

The  Bank  sells  loan   participations  to  correspondent   banks  and  certain
development  authorities  with respect to loans which exceed the Bank's  lending
limit.


Data Processing

The Bank has a data processing servicing agreement with M&I Data Services,  Inc.
This servicing  agreement  provides for the Bank to receive a full range of data
processing  services,  including an automated  general ledger,  deposit and loan
accounting. The data processing servicing agreement provides for the Bank to pay
a monthly  fee based on the type,  kind and volume of data  processing  services
provided, priced at a stipulated rate schedule.


Employees

The bank  employs 32  persons  including  30  full-time  employees.  None of the
employees are represented by a labor union or other collective  bargaining unit,
and management believes its employees relationships are satisfactory.


Monetary Policies

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


Supervision and Regulation

The Company and the Bank operate in a highly  regulated  environment,  and their
business  activities  are  governed by statute,  regulation  and  administrative
policies.  The  business  activities  of the  Company  and the Bank are  closely
supervised by a number of state and federal regulatory  agencies,  including the
Georgia  Department  of Banking and  Finance,  the Federal  Reserve  Board,  the
Securities and Exchange Commission and the Federal Deposit Insurance Corporation
("FDIC").


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The Company is  regulated  by the Federal  Reserve  Board under the Federal Bank
Holding  Company Act, which  requires  every bank holding  company to obtain the
prior approval of the Federal Reserve Board before acquiring more than 5% of the
voting shares of any bank or all or  substantially  all of the assets of a bank,
and before  merging or  consolidating  with another bank  holding  company.  The
Federal Reserve Board (pursuant to regulation and published  policy  statements)
has maintained  that a bank holding  company must serve as a source of financial
strength to its  subsidiary  banks.  In adhering  to the Federal  Reserve  Board
policy the Company may be required to provide  financial support to a subsidiary
bank at a time when,  absent such Federal Reserve Board policy,  the company may
not deem it advisable to provide such assistance.

Interstate  expansion  of bank  holding  companies  is  prohibited  unless  such
acquisition  is  specifically  authorized by a statute of the state in which the
target  bank or bank  holding  company is  located.  A bank  holding  company is
generally  prohibited from acquiring  control of any company which is not a bank
and from engaging in any business other than the business of banking or managing
and controlling  banks.  However,  there are certain  activities which have been
identified by the Federal  Reserve Board to be so closely  related to banking as
to be a proper incident thereto and thus permissible for bank holding companies,
including the following activities: acting as investment or financial advisor to
subsidiaries and certain outside  companies;  leasing personal and real property
or acting as a broker with  respect  thereto;  providing  management  consulting
advice to nonaffiliated  banks and nonbank  depository  institutions;  operating
collection agencies and credit bureaus; acting as a futures commission merchant;
providing data processing and data transmission services; acting as an insurance
agent or underwriter with respect to limited types of insurance; performing real
estate appraisals;  arranging commercial real estate equity financing; providing
securities  brokerage  services;  and underwriting and dealing in obligations of
the United States, the states and their political subdivisions.

The Company is also  regulated by the Georgia  Department of Banking and Finance
under the Georgia Bank Holding  Company Act,  which  requires every Georgia bank
holding  company to obtain prior  approval of the  Commission of Banking  before
acquiring more than 5% of the voting shares of any bank or all or  substantially
all of the assets of a bank, and before merging or consolidating  with any other
bank holding  company.  A Georgia bank holding  company is generally  prohibited
from  acquiring  ownership or control of 5% or more of the voting  shares of any
bank unless the bank being acquired is either a bank for purposes of the Federal
Bank Holding Company Act, or a federal or state savings and loan  association or
a federal saving bank whose deposits are insured by the Federal Savings and Loan
Insurance  Corporation,  and such bank has been in  existence  and  continuously
operating  as a bank for a  period  of five  years or more  prior to the date of
application to the Commissioner for approval of such acquisition.

Both the  Company and the Bank are subject to  regulatory  capital  requirements
imposed by the Federal  Reserve  Board and the FDIC.  In 1989,  both the Federal
Reserve Board and the FDIC issued new  risk-based  capital  guidelines  for bank
holding  companies  and banks which make  regularly  capital  requirements  more
sensitive to differences in risk profiles of various banking organizations.  The
capital adequacy  guidelines  issued by the Federal Reserve Board are applied to
bank  holding  companies  on a  consolidated  basis with the banks  owned by the
holding  company.   The  FDIC's  risk  capital   guidelines  apply  directly  to
state-chartered  banks which are not members of the Federal  Reserve  System and
whose  deposits  are  insured  by the  FDIC  regardless  of  whether  they are a
subsidiary of a bank holding  company.  Both agencies'  requirements  (which are
substantially  similar)  provide  that banking  organizations  must meet minimum
capital  requirements.  Regulatory  guidelines  define  capital as either Tier 1
(primarily includes common stock, paid-in capital and retained earnings) or Tier
2 (primarily  consists of subordinated  debentures,  certain preferred stock and
general  loan and lease  valuation  allowances).  The  Company  and the bank are
subject to a minimum  Tier 1 capital to  risk-weighted  assets ratio of 4% and a
total capital to risk-weighted assets of 8%.  Additionally,  the Company and the
Bank are subject to a minimum Tier 1 leverage  ratio of 4%. At December 31, 1996
the Company and the Bank meet all minimum capital  requirements.  See note 10 to
the consolidated financial statements.

Both the  risk-based  capital  guidelines  and the  leverage  ratio are  minimum
requirements,  applicable only to top-rated banking  institutions.  Institutions
operating at or near these levels are  expected to have  well-diversified  risk,
excellent asset quality,  high liquidity,  good earnings and in general, have to
be considered  strong banking  organizations,  rated composite 1 under the CAMEL
rating system for banks or the BOPEC rating  system for bank holding  companies.
Institutions  with lower  ratings and  institutions  with high levels of risk or
experiencing  or anticipating  significant  growth would be expected to maintain
ratios 100 to 200 basis points above the stated minimums.

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                                       5


The Federal  Reserve  Board and the FDIC  recently  have  proposed a revision to
their risk-based capital guidelines to further ensure that those guidelines take
adequate account of interest rate risk. Interest rate risk is the adverse effect
that changes in market interest rates may have on a bank's  financial  condition
and is inherent to the  business of banking.  The  agencies  have  proposed  two
alternative  methods for assessing a bank's  capital  adequacy for interest rate
risk.  Under the first approach,  the banking  agencies would establish  minimum
capital  standards for interest rate risk based on either a supervisory model or
the bank's internal model of measuring risk.  Institutions  would be required to
have capital  sufficient  to cover the amount of measured  exposure in excess of
the threshold  level.  The proposed  threshold level is a decline in net economy
value  equal to 1% of  assets.  Under the  second  approach,  a minimum  capital
requirement  for interest rate risk would not be set.  Instead,  examiners would
consider results of quantitative measures of interest rate risk along with other
factors in evaluating an institution's capital adequacy for interest rate risk.

The Federal Deposit Insurance  Corporation  Improvement Act of 1991 (the "Act"),
enacted on December 19, 1991,  provides for a number of reforms  relating to the
safety and soundness of the deposit  insurance  system,  supervision of domestic
and foreign depository institutions and improvement of accounting standards. One
aspect of the Act involves the  development  of a regulatory  monitoring  system
requiring prompt action on the part of banking regulators with regard to certain
classes of undercapitalized  institutions.  While the Act does not change any of
the  minimum  capital  requirements,  it  directs  each of the  federal  banking
agencies to issue regulations  putting the monitoring plan into effect.  The Act
creates five "capital categories" ("well capitalized", "adequately capitalized",
and   "undercapitalized",   "significantly   undercapitalized"  and  "critically
undercapitalized")  which  are  defined  in the  Act and  which  will be used to
determine the severity of corrective  action the appropriate  regulator may take
in the event an institution  reaches a given level of  undercapitalization.  For
example, an institution which becomes  "undercapitalized"  must submit a capital
restoration plan to the appropriate  regulator  outlining the steps it will take
to become  adequately  capitalized.  Upon approving the plan, the regulator will
monitor the institution's compliance.  Before a capital restoration plan will be
approved, any entity controlling a bank (i.e., holding companies) must guarantee
compliance with the plan until the  institution has been adequately  capitalized
for four consecutive calendar quarters.  The liability of the holding company is
limited to the lesser of five percent of the  institution's  total assets or the
amount which is  necessary to bring the  institution  into  compliance  with all
capital  standards.  In  addition,   "undercapitalized"   institutions  will  be
restricted   from  paying   management   fees,   dividends   and  other  capital
distributions,  will be subject to certain asset growth restrictions and will be
required to obtain prior  approval  from the  appropriate  regulator to open new
branches or expand into new lines of business.  As an institution drops to lower
capital levels,  the extent of action to be taken by the  appropriate  regulator
increases,  restricting  the types of  transactions in which the institution may
engage and  ultimately  providing for the  appointment of a receiver for certain
institutions deemed to be critically undercapitalized.

The Act  also  provides  that  banks  have  to meet  new  safety  and  soundness
standards.  In order to comply with the Act, the Federal  Reserve  Board and the
FDIC  issued a Notice  of  Proposed  Rulemaking  on  November  18,  1993,  which
institutes regulations defining operational and managerial standards relating to
internal  controls,  loan  documentation,  credit  underwriting,  interest  rate
exposure,  asset  growth,  director  and officer  compensation,  asset  quality,
earnings and stock valuation.

The State of Georgia has a regional  interstate banking statute which authorizes
bank holding  companies whose  operations are  principally  conducted in certain
southeastern  states to  acquire  banks and bank  holding  companies  located in
Georgia under certain conditions. Such southeastern states include the States of
Alabama, Arkansas, Florida, Louisiana,  Maryland,  Mississippi,  North Carolina,
South Carolina, Tennessee, Virginia, West Virginia and the District of Columbia.
Such  legislation has had the effect of increasing  competition  among financial
institutions in the Bank's market area and in the State of Georgia generally.

The Georgia General Assembly  recently enacted  legislation  altering the public
policy  of the State  regarding  intrastate  branch  banking.  Essentially,  the
legislation  allows a bank to establish de novo branch banks on a limited  basis
beginning July 1, 1996. Between July 1, 1996 and June 30, 1998, the number of de
novo  branch  banks is  limited to three per bank or group of  affiliated  banks
under the same bank holding  company.  Beginning  July 1, 1998, the number of de
novo branch banks which may be established is no longer limited by statute.

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As a bank  holding  company,  the  Company is  required to file with the Federal
Reserve Board an annual report of its  operations at the end of each fiscal year
and such  additional  information  as the  Federal  Reserve  Board  may  require
pursuant to the Act. The Federal Reserve Board may also make examinations of the
Company and each of its subsidiaries.

As a  state  bank,  the  Bank  is  subject  to the  supervision  of the  Georgia
Department  of Banking and Finance  and, to a limited  extent,  the FDIC and the
Federal Reserve Board. In addition, the Bank, as a subsidiary of the Company, is
subject to restrictions  under federal law in dealing with the Company and other
affiliates,  if any.  These  restrictions  apply to  extensions  of credit to an
affiliate,  investments  in the  securities  of an affiliate and the purchase of
assets from an affiliate.

The RCDRIA was enacted  September 23, 1994, to promote  economic  revitalization
and  community  development  to  "investment  areas".  The RCDRIA  establishes a
Community Development  Financial  Institutions Fund to achieve these objectives.
The fund is  authorized  to provide  financial  assistance  through a variety of
mechanisms, including equity investments, grants, loans, credit union shares and
deposits.   The  amount  of  assistance  any  community   development  financial
institution and its subsidiaries and affiliates may receive is generally limited
to $5 million. A qualifying  institution may receive an additional $3.75 million
for the purpose of serving an investment area in another state.

The RCDRIA also  provides  certain  regulatory  relief,  requiring  each federal
agency  to  streamline  and  modify  its   regulations  and  policies  ,  remove
inconsistencies and eliminate outmoded and duplicative requirements.  The RCDRIA
also directs the federal  agencies to coordinate  examinations  among  affiliate
banks,  coordinate  examinations  with  other  banking  agencies,  and  work  to
coordinate with state banking  agencies.  The federal banking  agencies are also
directed  to  work  jointly  in  developing  a  system  for  banks  and  savings
associations to file reports and statements electronically and to adopt a single
form for filing core information in reports and statements.

The  RCDRIA  also  provides  procedures  for  expediting  bank  holding  company
applications,  eliminating  prior  approval  of  the  Federal  Reserve  for  the
acquisition of control of a bank in a  reorganization  in which persons exchange
their shares for shares of a newly-formed bank holding company provided the bank
holding  company  immediately  after the  acquisition  meets  capital  and other
financial  standards  and the  bank is  "adequately  capitalized",  the  holding
company  does not engage in any  activities  other than  those of  managing  and
controlling banks, the company provides 30 days prior notice to the board of the
transaction,  and the holding company will not acquire control of any additional
bank. The RCDRIA also provides for reduction of  post-approval  waiting periods,
decreasing  the waiting  period from 30 days to 15 days in most  instances.  The
RCDRIA also exempts from federal  securities  registration  securities issued in
connection with the formation of a one-bank holding company.

The  RCDRIA  also  permits a bank  holding  company  to  engage  in  non-banking
activities or acquire or retain  ownership or control of the shares of a company
engaged  in  non-banking  activities  if prior  written  notice of the  proposed
transaction  or activity  is  provided  to the Federal  Reserve at least 60 days
before the  transaction  or  activity  occurs or  commences.  In  assessing  the
proposed transaction or activity, the board will consider whether performance of
the  activity  by a bank  holding  company or a  subsidiary  can  reasonably  be
expected  to  produce  benefits  to the  public,  such as  greater  convenience,
increased  competition or gains in efficiency  that outweighs  possible  adverse
effects.

The section of the Bank Holding  Company Act ("BHCA")  permitting a bank holding
company to engage in nonbanking  activities with sixty day notice was amended by
the Economic Growth and Regulatory Paperwork Reduction Act of 1966, enacted as a
part of the  Omnibus  Consolidated  Appropriations  Act for Fiscal  Year 1997 to
permit a well-capitalized  and well-managed bank holding company,  that controls
predominantly  well-capitalized  and well-managed  depository  institutions,  as
defined by amendments to the Bank Holding  Company Act, to engage de novo in any
permissible   non-banking   activities   (except   for  an  insured   depository
institution,  i.e., a savings  association)  under expedited  procedures.  To be
eligible for the expedited procedures, the book value of the assets acquired may
not exceed 10% of the holding  company's  consolidated  risk weighted assets and
the  consideration  paid may not exceed  15% of Tier one  capital.  The  Federal
Reserve  Board may adjust  these  percentages.  In addition,  no  administrative
enforcement  action may have been  commenced or be pending nor may any cease and
desist order pursuant to & 8 of the FDIC Act  have  been  issued  or  be pending
against the holding company or any of its depository institutions subsidiaries.

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                                       7


While all qualifying  holding  companies  engaging in  permissible,  non-banking
activities  under the expedited  procedures  must provide  notice to the Federal
Reserve Board, the notice provisions  differ.  First, to engage de novo directly
or through a  subsidiary  in  activities  that the Fed has  already  approved by
regulation,  the bank holding  company must provide notice within ten days after
commencing  the  activity.  Second,  to  engage in  activities  that the Fed has
permitted  by order or to acquire the shares or assets of an  existing  company,
the bank holding company must provide notice at least twelve business days prior
to  commencing  the  activity,  during  which time the Fed may  require the full
60-day notice procedure.

The Interstate Bank Act,  enacted  September 29, 1994, will, among other things,
permit bank holding  companies to merge their multi-state bank subsidiaries into
a single bank by June 1, 1997, unless state legislators act to "opt-out" of this
provision,  to acquire banks in any state one year after the  effective  date of
the Interstate Banking Act and permit banks to establish de novo branches across
state lines so long as the  individual  states  into which a  potential  de novo
entrant proposes to branch specifically passes legislation to "opt-in".

Under the Interstate  Bank Act, a bank may merge beginning on June 1, 1997, with
a bank in another state so long as the transaction  does not involve a bank in a
home state which has enacted a law after the date of enactment of the Interstate
Banking Act and before June 1, 1997,  that  applies  equally to all out of state
banks and expressly  prohibits such interstate merger  transactions.  Such a law
would have no effect on merger  transactions  approved before the effective date
of such state law.  States may also elect to permit merger  transactions  before
June 1, 1997.

The  Interstate   Banking  Act  authorizes   interstate  mergers  involving  the
acquisition  of a branch of a bank without the  acquisition  of the bank only if
state law permits an out of state acquiror to acquire a branch without acquiring
the bank.  State  minimum  age laws for banks to be acquired  will be  preserved
unless  state law  provides  for a minimum  age period of more than five  years.
After  consummation of any interstate merger  transaction,  a resulting bank may
establish or operate additional branches at any location where any bank involved
in the transaction  could have established or operated a branch under applicable
federal or state law.

Beginning  September  29, 1995,  the Board of  Governors of the Federal  Reserve
System is  authorized  to approve  the  acquisition  by a well  capitalized  and
adequately  managed  bank  holding  company of a bank that is located in another
state without regard as to whether the acquisition is prohibited  under the laws
of any state.  Again,  state  minimum age laws for banks to be acquired  will be
preserved  unless the state law  provides  for a minimum age period of more than
five years. The Federal Reserve may not approve an interstate  acquisition which
would result in the acquiror's  controlling more than 10% of the total amount of
deposits of insured  depository  institutions  in the United  States with 30% or
more of the deposits in the home state of the target bank. A state may waive the
30% limit  based on  criteria  that does not  discriminate  against out of state
institutions.  The limitations do not apply to the initial entry into a state by
a bank holding  company  unless the state has a deposit  concentration  cap that
applies on a  nondiscriminatory  basis to in state or out of state bank  holding
companies  making  an  initial   acquisition.   Notwithstanding  the  foregoing,
anti-trust laws are not affected by the Interstate Banking Act.

The Interstate  Bank Act now provides that banks may establish  branches  across
state lines upon  approval of the  appropriate  federal  regulator  if the state
"opts-in" by enacting  legislation  that  expressly  permits de novo  interstate
branching. The establishment of the initial branch in a host state which permits
de novo interstate  branching is subject to the same requirements which apply to
the  initial  acquisition  of a bank in a host  state,  other  than the  deposit
concentration  limits, since the bank would not control any deposits in the host
state  at the time of  entry.  Once a branch  has  been  established  by de novo
branching,  the  bank may  establish  and  acquire  additional  branches  at any
location  in the host  state in the same  manner  as any bank in the host  state
could have established or acquired under applicable federal or state law.

The scope of regulation and  permissible  activities of the Company and the Bank
is subject to change by future federal and state legislation.

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                                       8


Recent Regulatory Developments

On  September  3,  1996,  President  Clinton  signed  the  Omnibus  Consolidated
Appropriations Act for the fiscal year 1997. Subtitle G of Title Two of that Act
is titled the "Deposit  Insurance  Funds Act of 1996" (Deposit  Insurance  Funds
Act),  which among other  things  provides for the  recapitalization  of Savings
Association  Insurance  Fund ("SAIF") as of October 1, 1996. To accomplish  this
recapitalization,  the  FDIC  imposed  a  special  assessment  on  each  insured
depository  institution  with  deposits  assessable  under the SAIF so that SAIF
would achieve its  designated  reserve ratio (DRR) on the first  business day of
the first month after the date of the enactment of the Deposit  Insurance  Funds
Act.  Because the  legislation  was enacted as of September 30, 1996,  under the
Deposit  Insurance Funds Act, SAIF achieved its DRR and became fully capitalized
on October 1, 1996.  For purpose of the SAIF special  assessment,  the amount of
SAIF-assessable  deposits is determined as of March 31, 1995. However,  the term
"SAIF-assessable deposits" includes deposits assumed after March 31, 1995 if the
deposits  were assumed from an  institution  that is no longer  insured when the
special   assessment  to  recapitalize  SAIF  is  imposed  under  this  section.
Therefore,  some institutions will be required to pay the special  assessment on
SAIF insured deposits that were assumed after March 31, 1995.

A major  part of the plan to  recapitalize  SAIF  involves  imposing  a one-time
special  assessment  on  SAIF-assessable  deposits  that  may  be  paid  in  two
installments under certain conditions. Subject to certain statutory adjustments,
the FDIC  has  discretion  to  determine  the  rates  of the  assessments  after
considering  certain  factors,  including the most recent SAIF balance,  data on
insured deposits,  and any other factors that the FDIC deems  appropriate.  This
one-time special assessment is subject to certain  exceptions,  and the FDIC has
discretion to issue orders exempting weak  institutions from paying this special
assessment if the exemption  will reduce the risk to SAIF.  The FDIC  prescribed
guidelines  for issuing  such an  exemption  within 30 days of  enactment of the
Deposit  Insurance  Funds Act. The Act required  FDIC to exempt from the special
assessment  (1)  institutions  that  existed on October 1, 1995 and held no SAIF
assessable  deposits  before  January 1, 1993,  (2) federal  savings banks newly
established in April,  1994 to acquire the deposits of savings  institutions  in
default  that  received   assistance   from  the  RTC  in  connection  with  the
transactions,  and (3) an SAIF insured savings  association that, before January
1, 1987,  was a federal  savings  bank  insured by the FSLIC for the  purpose of
acquiring  the  assets or  assuming  the  liabilities  of a  national  bank in a
transaction  consummated  after  July 1,  1986 and had  assets  less  than  $150
million.   Exempt  institutions   generally  are  required  to  pay  semi-annual
assessments  at former rates under the schedule  applicable to SAIF fund members
on June 30, 1995, with certain exceptions.

There are three statutory adjustments that the FDIC must consider in setting the
SAIF  recpaitalization  rates. The first of these relates to Oakar transactions,
which are  generally  defined  to  include  bank  purchases  of  SAIF-assessable
deposits. Generally, Bank Insurance Fund (BIF) members acquiring SAIF-assessable
deposits in Oakar  transactions prior to March 31, 1995 (or after March 31, 1995
if the institution from which the deposits were acquired is no longer insured at
the time the special  assessment  is  imposed),  are subject to the SAIF special
assessment  but  the  amount  of  assessable   deposits   would,  as  a  general
proposition,  be  reduced  by 20% for  purposes  of the  assessment  if  certain
conditions  are  satisfied.  The 20% haircut  for these BIF members  applies for
purposes  of the  special  assessment  and for  purposes  of future  semi-annual
assessments  on  SAIF-assessable  deposits that were acquired prior to March 31,
1995.  To be eligible  for the 20% haircut,  a BIF member must  satisfy  certain
requirements  that are based on a suggested  attributable  deposit  amount as of
June 30, 1995.

The second statutory adjustment the FDIC must consider for purposes of computing
this special assessment  relates to "converted  associations," a term defined by
the Act. An  institution  meeting  one of the Act's  definitions  of  "converted
association" may also reduce by 20% the amount of deposits that are SAIF insured
as of March  31,  1995 (or  after  March  31,  1995 is  subject  to the  special
assessment  because the institution  from which the deposits were acquired is no
longer  insured at the time the special  assessment is imposed).  In addition to
"converted associations," Sasser banks - a savings association that converted to
a bank charter prior to SAIF reaching its DRR and as a result the resulting bank
was required to remain an SAIF member - may qualify under this second adjustment
under very limited criteria.

Third, if payment of the special  assessment  would pose a significant risk that
an insured depository institution or its holding company may default on payments
under debt  obligations or preferred stock, the institution may elect to pay the
special  assessment  under  extended  terms  that would  include a  supplemental
special assessment.

<PAGE>
                                       9


The SAIF was initially  capitalized  through the issuance of bond obligations by
the  Financing  Corporation  (FICO),  commonly  referred to as FICO  bonds.  The
Deposit  Insurance  Funds Act also addresses  repayment of the interest on those
bonds.   Beginning  with  the  semi-annual  periods  after  December  31,  1996,
assessments  to pay  approximately  $8 million in interest on FICO bonds will be
shared among all insured  depository  institutions,  including  insured national
banks,  instead of only SAIF members. For purposes of the assessments to pay the
interest on the FICO bonds,  BIF-assessable  deposits will be assessed at a rate
of 20% of the  assessment  rate  applicable to  SAIF-assessable  deposits  until
December 31,  1999.  After the earlier of December 31, 1999 or the date the last
savings  association  ceases to exist, full pro rata sharing of FICO assessments
will begin.

For purposes of paying the interest on the FICO bonds, "BIF-assessable deposits"
means   deposits   that  are  subject  to   assessments   under  BIF.  The  term
"SAIF-assessable  deposits"  means deposits that are  assessable  under SAIF and
includes  any  deposits  that were  assumed  after March 31, 1995 if the insured
institution  from which the deposits  were acquired is not insured when the SAIF
special assessment is imposed.

The Deposit  Insurance Funds Act also provides that, as of the date of enactment
and ending on the earlier of December 31, 1999 or the date that the last savings
association  ceases to exist, the federal banking agencies must take appropriate
action to prohibit  deposit  shifting  from SAIF to BIF,  including  enforcement
actions,  denial of  applications , or imposing exit and interest fees as if the
transaction  qualified as a conversion.  The legislation  requires the office of
the comptroller of the currency,  the FDIC, the Federal  Reserve Board,  and the
Office of Thrift  Supervision  to take  necessary  actions  to  prevent  insured
depository  institutions  and  depository  institution  holding  companies  from
facilitating  or encouraging  the shifting of deposits from  SAIF-assessable  to
BIF-assessable for purpose of evading the assessments imposed on SAIF-assessable
deposits.  The FDIC may issue regulations to prevent deposit  shifting.  It is a
rule of construction,  however, that this portion of the Deposit Insurance Funds
Act does not prohibit an  institution  from engaging in conduct or activity that
is part of the ordinary  course of business and is not directed at depositors of
an insured affiliated institution.

The Deposit  Insurance  Funds Act also  provides  for the merger of BIF and SAIF
into Deposit  Insurance Fund (DIF) on January 1, 1999, if no insured  depository
institutions  a  "savings  association"  on that  date.  If an  insured  savings
association  still exists on January 1, 1999,  the Deposit  Insurance  Funds Act
does not make  provision  for the  merger of the funds to occur on a  subsequent
date. For purposes of the IF/SERIF  merger,  the term "savings  association"  is
defined  as  having  the  same  meaning  as  it  does in &  3(b) of the FDIC Act
(12 U.S.C.  & 1813 (b)),  and  thus  includes  both  federal  and  state savings
associations.

If  immediately  before the merger , the SAIF reserve ratio exceeds the DRR, the
excess will be placed in DIF's special  reserve.  While the DIF special  reserve
will not be included  for purposes of  calculating  the DIF DRR and the FDIC can
not refund any amount in the special reserve, it can be drawn upon for emergency
purposes if the reserve  ratio of the DIF should drop below 50% of its DRR for a
sustained  period of time.  This  portion of the  Deposit  Insurance  also makes
conforming  changes  to the FDIC Act and other  provisions of law  effective  on
January 1, 1999 if the funds are so  merged.  If the funds are not  merged,  the
Deposit  Insurance Fund Act establishes an SAIF special reserve as of January 1,
1999 that will  consist  of the excess in the SAIF over the DRR as of that date.
While the amount in the SAIF  special  reserve can not be used for refunds  from
the SAIF, it would be available  for emergency  purposes if the reserve ratio of
the SAIF is less than 50% of its DRR for a sustained period of time.

The Deposit Insurance Funds Act also required the FDIC on such basis as it deems
appropriate to refund any amounts in excess of the DRR to BIF members and, after
it is established,  to DIF members.  There are no similar provisions for refunds
to SIF  members.  A  member  can  not,  however,  receive  any  refund  for  any
semi-annual  assessment  period  that  exceeds the  assessment  paid during that
period.  Institutions  that  are  not  "well-capitalized"  or  that  have  other
weaknesses are not eligible for refunds.  The refund provision becomes effective
as of the end of any semi-annual  assessment  period beginning after the date of
enactment of the Deposit Insurance Funds Act.

<PAGE>
                                       10


Item 2.  Properties.
--------------------

The  executive  offices  and the Bank  facility  are  located on Ford  Avenue in
Richmond Hill,  Georgia on approximately 2.8 acres of land. The building,  which
is owned by Bryan Bank & Trust and carried as an asset on its balance sheet,  is
two stories with  approximately  8,700  square feet.  The lobby with five teller
windows and several service desks, the executive and lending  offices,  the loan
department  and the vault which  contains 700 safe  deposit  boxes for rental to
Bank customers are located on the ground floor. The accounting  operations and a
conference  room are  located  on the  second  floor.  The  building  also has a
drive-in teller window.


Item 3.  Legal Proceedings.
---------------------------

There are no pending  legal  proceedings  to which the  Company or the Bank is a
party or of which any of their properties are subject; nor are there proceedings
known to the Company to be contemplated by any governmental  authority;  nor are
there  proceedings known to the Company,  pending or contemplated,  in which any
director, officers or affiliate or any principal security holder of the Company,
or any associate of the  foregoing is a party or has an interest  adverse to the
Company or the Bank.


Item 4.  Submission of Matters to a Vote of Security Holders.
-------------------------------------------------------------

No matter was submitted  during the fourth  quarter ended December 31, 1996 to a
vote of security holders of the Company.







                                     PART II



Item 5.  Market or Registrant's Common Equity and Related Stockholder Matters.
------------------------------------------------------------------------------

The Company has  maintained  partial  records of share  prices based upon actual
transactions disclosed.  However, these records are incomplete since they do not
reflect prices for all  transactions in the common stock of the Company.  To the
extent such  information has been disclosed to the Company,  the share prices of
the common stock of the Company is as follows:
<TABLE>
<CAPTION>

    --------------------------------------------------------
                                          Selling Price
                                 ---------------------------
               Year                   High             Low
   <S>                            <C>             <C>
   ---------------------------------------------------------
   1996:
   First quarter                  $    20         $    18
   ---------------------------------------------------------
   Second quarter                     n/a             n/a
   ----------------------------------------------------------
   Third quarter                      n/a             n/a
   ----------------------------------------------------------
   Fourth quarter                 $    20         $    20
   ----------------------------------------------------------
   1995:
   First quarter                  $    15         $    15
   ----------------------------------------------------------
   Second quarter                     n/a             n/a
   ----------------------------------------------------------
   Third quarter                      n/a             n/a
   ----------------------------------------------------------
   Fourth quarter                     n/a             n/a
   ----------------------------------------------------------

</TABLE>

<PAGE>
                                       11


During  the  period  covered  by this  report  and to  date,  there  has been no
established public trading market for the Company's common stock.

As of March 5,  1997,  the  approximate  number  of  holders  of  record  of the
Company's common stock was 428.

The Company has paid cash dividends on an annual basis since 1994. In the second
quarters of 1996 and 1995,  the Company paid cash  dividends  totaling  $.70 and
$.60 per share,  respectively.  The Company  expects to continue  paying  annual
dividends,  although there is no assurance as to future  dividends  because they
will depend on the future earnings,  capital  requirements,  financial condition
and other factors considered relevant by the Board of Directors of the Company.

The  Company's  ability to pay dividends  will depend  entirely on the amount of
dividends paid by the Bank and any other  subsequently  acquired  entities.  The
Bank is, and such other entities may be, subject to regulatory  restrictions  on
the payment of dividends.  The Bank is subject to restrictions on the payment of
dividends under Georgia law and Georgia Banking Department regulations. Pursuant
to  regulations  adopted by the  Georgia  Banking  Department,  a bank needs the
approval of the Georgia Banking  Department to pay cash dividends if at the time
of such  payment (i) total  classified  assets  exceed 80% of the bank's  equity
capital  (which  included the aggregate  par value of all common stock,  paid in
surplus,  retained earnings,  capital reserves and reserves for loan losses), or
(ii) the  aggregate  amount of  dividends to be paid or  anticipated  to be paid
during the calendar  year exceeds 50% of the net  after-tax  profits of the bank
for the previous calendar year, or (iii) the ratio of equity capital (as defined
above) to  adjusted  total  assets is less than six  percent  (6%).  The Georgia
Business Corporation Code permits payment of dividends to shareholders in money,
indebtedness or other property unless, after giving effect to such distribution,
the  corporation  would not be able to pay its debts as they  became  due in the
usual  course of business or the  corporation's  total assets would be less than
the sum of its total  liabilities  plus the  amount  that would be needed if the
corporation  were to be  dissolved  at the time of  distribution  to satisfy the
preferential  rights upon dissolution of shareholders whose preferential  rights
are superior to those receiving the distribution.



Item 6.   Management's Discussion and Analysis of Financial Condition and
-------------------------------------------------------------------------
          Results of Operations.
          ----------------------

The following  analysis  reviews the important  factors  affecting the financial
condition  and results of  operations  of Bryan  Bancorp  (the  "Company").  The
Company owns all of the outstanding  stock of Bryan Bank and Trust (the "Bank").
The financial position, results of operations, and the cash flows of the Company
are primarily  related to the Bank.  This review  should be read in  conjunction
with the consolidated financial statements and related notes.


LIQUIDITY AND INTEREST RATE SENSITIVITY

The primary  functions  of  asset/liability  management  are to assure  adequate
liquidity and maintain an appropriate balance between interest-sensitive earning
assets and interest-bearing  liabilities. The goal of liquidity management is to
ensure  the  availability  of  adequate  funds to meet the loan  demand  and the
deposit  withdrawal needs of the Company's  customers.  This is achieved through
maintaining a combination  of  sufficient  liquid assets and unused  capacity to
purchase funds in the money markets.  Interest rate sensitivity management seeks
to avoid  fluctuating net interest margins and to enhance  consistent  growth of
net interest income through periods of changing interest rates.

The Company meets most of its daily  liquidity  needs through the  management of
cash and federal funds sold.  The Company  continues to be in a liquid  position
with approximately  $5,500,000  invested in federal funds sold and approximately
$2,300,000 in cash and due from banks at December 31, 1996.  The Company's  cash
and  cash  equivalents  plus  Federal  funds  sold  increased  by  approximately
$2,900,000  in 1996.  The  primary  source of this  increase  was  approximately
$1,000,000 generated from operating  activities and approximately  $9,100,000 in
deposit growth in 1996. The Company also received  short-term  advances from the
Federal  Home Loan Bank at  various  times  during  the year  which were used in
funding the continued demand for loans which increased approximately  $5,400,000
in 1996.

<PAGE>
                                       12


In addition to the  Company's  credit line with the Federal Home Loan Bank which
allows  advances  up to  seventy-five  percent of the book value of  one-to-four
family first  mortgage  loans.  The Company also has the ability on a short-term
basis to  purchase  funds  from other  financial  institutions.  Presently,  the
Company  has  federal  funds line of credit  arrangements  with other  financial
institutions aggregating $3,000,000.

There are no trends, demands,  commitments,  events or uncertainties that should
result  in or  are  reasonably  likely  to  result  in the  Company's  liquidity
increasing or decreasing in any material way.

Interest rate  sensitivity  varies with the different types of  interest-earning
assets and interest-bearing liabilities.  Overnight federal funds on which rates
change daily and loans which are tied to the prime rate differ considerably from
long-term investment securities and fixed-rate loans.  Similarly,  time deposits
over $100,000 or more sensitive than regular savings accounts.  The shorter-term
interest rate sensitivities are key to measuring the interest sensitivity gap.

Management  monitors the  Company's  asset and  liability  positions in order to
maintain a balance between rate-sensitive assets and rate-sensitive  liabilities
and at the same time maintain sufficient liquid assets to meet expected customer
needs for loans and for withdrawals of deposits.

The following table shows the interest  sensitivity gaps for four different time
intervals as of December 31, 1996:

<TABLE>
<CAPTION>

                                                                              Term to Repricing on Maturity
                                                                                    (in thousands)
                                                        -------------------------------------------------------------------------

                                                            0-90           91-365        One-Five       Over Five
                                                            days            days           Years          Years          Total
                                                        ------------    ------------   ------------   ------------   ------------
        Interest earning assets:
        <S>                                             <C>             <C>            <C>            <C>            <C>
        Federal Funds Sold ..........................   $  5,530,000                                                 $  5,530,000
        Available for sale securities ...............        505,941                   $  1,639,347   $  3,189,437      5,334,725
        Held to maturity securities .................       156,200     $     75,000        718,026      2,244,974      3,194,200
        Loans, net ..................................      6,704,617      14,272,834     20,420,045        407,943     41,805,439
                                                        ------------    ------------   ------------   ------------   ------------
        Total interest earning assets ...............     12,896,758      14,347,834     22,777,418      5,842,354     55,864,364
                                                        ------------    ------------   ------------   ------------   ------------

        Interest bearing liabilities:
        NOW deposits ................................      9,335,919                                                    9,335,919
        Money market deposits .......................      1,787,254                                                    1,787,254
        Savings deposits ............................      6,719,504                                                    6,719,504
        Time deposits ...............................      7,896,225      13,986,417      3,254,390                    25,137,032
        short-term borrowings .......................        433,195                                                      433,195
                                                        ------------    ------------   ------------   ------------   ------------
        Total interest bearing liabilities                26,172,097     13,986,417       3,254,390                    43,412,904
                                                        ------------    ------------   ------------   ------------   ------------

        Interest Rate Sensitivity Gap ...............   $(13,275,339)   $   361,417    $ 19,523,028   $  5,842,354   $ 12,451,460
                                                        ============    ============   ============   ============   ============

</TABLE>


As  indicated  in the above  table,  the first three  months  reflect a negative
cumulative  gap position.  A negative gap position  indicates that the Company's
rate sensitive  liabilities will reprice faster than its rate sensitive  assets.
While the Company's  rate  sensitive  liabilities  reprice more quickly than the
rate  sensitive  assets  during the first three months,  this position  reverses
during  the  remainder  of the  first  year  to a  positive  gap  position.  The
$19,523,028 excess of interest-earning assets over interest-bearing  liabilities
for the one-to-five year period is primarily related to the longer maturities of
loans over relative to deposits.

The interest rate sensitivity  table presumes that all loans and securities will
perform according to their contractual maturities when, in reality,  actual loan
terms are much shorter than the original terms and in many cases  securities are
subject  to early  redemption.  In  addition,  the  table  does not  necessarily
indicate the impact of general  interest rate  movements on net interest  margin
since  the  repricing  categories  of  assets  and  liabilities  is  subject  to
competitive pressures and customers needs.

<PAGE>
                                       13



CAPITAL RESOURCES

The Company continues to maintain a satisfactory  level of capital which exceeds
regulatory requirements and is available to support future growth. The Company's
level of capital can be measured by its average  equity to average  assets ratio
at December 31, 1996 and 1995 of 11.84% and 12.16%, respectively.

Shareholders'  equity increased  $396,497 during 1996, an increase in book value
from $12.33 at December  31, 1995 to $13.42.  The Company  recorded net earnings
for 1996 of  $1,021,323  and paid  cash  dividends  of $.70 per  share  totaling
$354,591. The Company also purchased 12,600 shares of treasury stock during 1996
at a cost of $250,800


The Company and the Bank are subject to various regulatory capital  requirements
administered  by the federal banking  agencies.  Failure to meet minimum capital
requirements   can  initiate   certain   mandatory   and   possible   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 Bank
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 the
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 and the
Bank to maintain minimum amounts and ratios of Tier 1 capital (as defined in the
regulations)  to total average  assets (as defined) and minimum ratios of Tier 1
and total capital (as defined) to risk-weighted assets (as defined).  Management
believes,  as of  December  31,  1996,  that the  Company  and the Bank meet all
capital adequacy requirements to which it is subject.

Management is not aware of any required regulatory changes or any recommendation
by any regulatory  authority  which will have a material effect on the Company's
liquidity, capital, or results of operations.


RESULTS OF OPERATIONS

The following  discussion and analysis  summarizes the more significant  factors
affecting operations for 1996 compared to 1995:

Net Interest Income

The Company's results of operations are determined by its ability to effectively
manage interest income and expense,  to minimize loan and investment  losses, to
generate noninterest income and to control noninterest  expense.  Since interest
rates are determined by market forces and economic conditions beyond the control
of  management.  The  Company's  ability  to  generate  net  interest  income is
dependent upon its ability to obtain an adequate net interest spread between the
rate paid on  interest  bearing  liabilities  and the rate  earned  on  interest
earning assets.

Net interest income was $2,611,420 in 1996, representing an increase of $256,280
or 11% as compared to 1995.  The average  yield on  interest-earning  assets was
9.01%  in  1996  compared  to  9.11%  in  1995  and  the  average  rate  paid on
interest-bearing  liabilities  was 4.81% in 1996 compared to 4.86% in 1995.  The
Company's  net  interest   margin  (net  interest   income  divided  by  average
interest-bearing  assets)  equaled  5.20% in 1996 and  1995.  The  current  year
increase in net interest income  resulted  primarily from volume increase in the
loan portfolio.

Noninterest Income

Noninterest income increased $138,449 or 19.49% in 1996 over 1995. This increase
is primarily  attributable to increases in service  charges on deposit  accounts
which was the result of deposit growth and rate changes fees.

Noninterest Expense

Noninterest expense increased $232,908 or 14.49% in 1996 over 1995. Salaries and
employee  benefits  was  the  largest  component  of  non-interest  expense  and
increased  $204,938 in 1996 over 1995.  The  increase in salaries  and  employee
benefits was due  primarily to the growth in the  operations of the Bank and the
need to add additional employees as well as normal salary increases.

<PAGE>
                                       14


Net noninterest expense (defined as noninterest expense less noninterest income)
as a  percentage  of average  assets was 1.8% in 1996 and 1995.  The  efficiency
ratio  (noninterest  expense  divided by the sum of net  interest  income  after
provision for loan losses and  non-interest  income) was 55% in 1996 as compared
to 54% in 1995.  Management will continue to focus on improving the non-interest
fee income of the Company as it closely monitors operating expenses.

Income Taxes

The  provision  for  income  taxes was  $508,000  in 1996 and  $456,000  in 1995
representing an effective tax rate of approximately 33% for 1996 and 1995.



Impact of New Accounting Standards

Effective January 1, 1996, the Company adopted Statement of Financial Accounting
Standards (SFAS) No 121 "Accounting for the Impairment of Long-Lived  Assets and
Long-Lived  Assets to Be Disposed  Of".  The adoption of this  statement  had no
impact on the results of operations  of the Company for the year ended  December
31, 1996.

In October 1995,  the Financial  Standards  Board issued  Statement of Financial
Accounting Standards (SFAS) No 123,  "Accounting for Stock-Based  Compensation",
which  provides an  alternative  to APB Opinion  No. 25,  "Accounting  for Stock
Issued to  Employees",  in accounting  for  stock-based  compensation  issued to
employees.  The statement allows for a fair value based method of accounting for
employee stock options and similar equity  instruments.  However,  for companies
that continue to account for stock-based compensation arrangements under Opinion
No. 25,  Statement  No. 125 requires  disclosure  of the pro forma effect on net
income  and  earnings  per  share  of  its  fair  value   accounting  for  those
arrangements.  These  disclosure  requirements  are  effective  for fiscal years
beginning after December 15, 1995, or upon initial adoption of the statement, if
earlier.  The Company  continues to evaluate the provisions of Statement No. 123
and has not determined  whether it will adopt the  recognition  and  measurement
provisions of that Statement.

In June 1996,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  (SFAS) No. 125,  "Accounting for Transfers and
Servicing  of  Financial  Assets  and  Extinguishments  of  Liabilities",  which
requires an entity, after a transfer of financial assets that meets the criteria
to be accounted for as a sale,  to recognize the financial and servicing  assets
it controls and the  liabilities  it has incurred and to  derecognize  financial
assets when control has  surrendered.  This  standard is effective for transfers
and servicing of financial assets and  extinguishments of liabilities  occurring
after  December  31,  1996,  except  that the  standard  will be  effective  for
transfers of financial assets and transactions related to repurchase  agreement,
dollar rolls,  securities  lending and the like,  occurring  after  December 31,
1997. The adoption of this  statement is not expected to have a material  effect
on the Company's financial position or results of operations.

<PAGE>
                                       15



DISTRIBUTION OF ASSETS, LIABILITIES, AND SHAREHOLDERS' EQUITY; INTEREST RATES
AND INTEREST DIFFERENTIAL

The following  tables set forth selected  statistical  information and should be
read in conjunction with the consolidated  financial statements of Bryan Bancorp
of Georgia, Inc. (the "Company") and subsidiary (the "Bank").

     Table 1 - Average Consolidated Balance Sheets

     The following table is a presentation of the average  consolidated  balance
     sheets of the Company and includes all major categories of interest-earning
     assets and interest-bearing liabilities:

<TABLE>
<CAPTION>
                                                                 December 31,
                                                        ----------------------------
                                                            1996            1995
                                                        ------------    ------------
        ASSETS
        <S>                                             <C>             <C>
        Interest-bearing deposits ...................   $    171,913    $    222,203
        Investment securities available for sale ....      5,309,840       6,059,371
        Investment securities held to maturity ......      3,006,483       2,913,562
        Federal funds sold ..........................      2,678,352         814,358
        Loans, net ..................................     39,081,731      35,282,784
                                                        ------------    ------------
          Total interest-earning assets .............     50,248,319      45,292,278
        Cash and due from banks .....................      2,476,436       2,625,972
        Other assets ................................      1,927,564       1,516,624
                                                        ------------    ------------
           Total assets .............................   $ 54,652,319    $ 49,434,874
                                                        ============    ============

        LIABILITIES
        NOW deposits ................................   $  9,291,178    $  8,561,434
        Money market deposits .......................      1,690,102       1,402,700
        Savings deposits ............................      6,945,750       7,389,304
        Time deposits ...............................     21,465,200      17,453,221
        Short-term borrowings .......................        441,153       1,685,981
                                                        ------------    ------------
          Total interest-earning liabilities ........     39,833,383      36,492,640
        Non-interest bearing deposits ...............      7,839,227       6,534,999
        Other liabilities ...........................        508,553         395,331
                                                        ------------    ------------
           Total liabilities ........................     48,181,163      43,422,970
                                                        ------------    ------------

        SHAREHOLDERS' EQUITY
        Common stock ................................        521,758         521,758
        Additional paid-in capital ..................      4,869,485       4,869,485
        Retained earnings ...........................      1,321,694         678,461
        Treasury stock ..............................       (241,781)        (57,800)
                                                        ------------    ------------
           Total shareholders' equity ...............      6,471,156       6,011,904
                                                        ------------    ------------
           Total liabilities and shareholders' equity   $ 54,652,319    $ 49,434,874
                                                        ============    ============
</TABLE>

<PAGE>
                                       16

     Table 2 - Net Interest Earnings

       The  following  table is an analysis of the net interest  earnings of the
       Company with respect to each major  category of  interest-earning  assets
       and interest-bearing liabilities:
<TABLE>
<CAPTION>
        YEAR ENDED DECEMBER 31,1996:
        ---------------------------------------------
                                                     Average       Interest      Average
                                                     Amount        Earned         Yield
                                                   -----------   -----------   -----------
        Assets
       <S>                                         <C>           <C>           <C>
        Interest-bearing deposits ..............   $   171,913   $     9,581      5.57%
        Investment securities available for sale     5,309,840       323,735      6.10%
        Investment securities held to maturity .     3,006,483       153,475      5.10%
        Federal funds sold .....................     2,678,352       141,655      5.29%
        Loans, net .............................    39,081,731     3,898,485      9.98%
                                                   -----------     ---------
           Total earning assets ................    50,248,319     4,526,931      9.01%
                                                   ===========     ---------

                                                      Average      Interest      Average
                                                      Amount         Paid       Rate Paid
                                                   -----------   -----------   -----------
        Liabilities
        NOW deposits ........................        9,291,178       347,055      3.74%
        Money market deposits ...............        1,690,102        64,286      3.80%
        Savings deposits ....................        6,945,750       243,010      3.50%
        Time deposits .......................       21,465,200     1,233,742      5.75%
        Short-term borrowings ...............          441,153        27,418      6.22%
                                                   -----------   -----------
           Total interest bearing liabilities      $39,833,383     1,915,511      4.81%
                                                   ===========   -----------
        Net interest income .................                    $ 2,611,420
                                                                 ===========
        Net yield on interest earning assets                                      5.20%
                                                                               ===========

        YEAR ENDED DECEMBER 31,1995:
        ---------------------------------------------
                                                     Average       Interest      Average
                                                      Amount        Earned        Yield
                                                   -----------   -----------   -----------
        Assets
        Interest-bearing deposits ..............   $   222,203   $    12,132      5.46%
        Investment securities available for sale     6,059,371       364,153      6.01%
        Investment securities held to maturity .     2,913,562       148,033      5.08%
        Federal funds sold .....................       814,358        46,699      5.73%
        Loans, net .............................    35,282,784     3,556,859     10.08%
                                                   -----------   -----------
           Total earning assets .................   45,292,278     4,127,876      9.11%
                                                   ===========   -----------

                                                     Average       Interest      Average
                                                      Amount        Earned        Yield
                                                   -----------   -----------   -----------
        Liabilities
        NOW deposits ........................        8,561,434       333,656      3.90%
        Money market deposits ...............        1,402,700        53,199      3.79%
        Savings deposits ....................        7,389,304       258,553      3.50%
        Time deposits .......................       17,453,221     1,000,487      5.73%
        Short-term borrowings ...............        1,685,981       126,841      7.52%
                                                   -----------   -----------
           Total interest bearing liabilities       36,492,640     1,772,736      4.86%
                                                   ===========   -----------
        Net interest income .................                    $ 2,355,140
                                                                 ===========
        Net yield on interest earning assets                                      5.20%
                                                                               ===========
<FN>
              Includes  impaired  loans of $56,000 and $32,000  during the years
              ended December 31, 1996 and 1995, respectively.
              **   No loan fees or loan  service  fees  are included in interest
              earned on net loans.
</FN>
</TABLE>
<PAGE>
                                       17


     Table 3 - Rate/Volume Analysis of Net Interest Income

     The effect of changes in average  balances  (volume)  and rates on interest
     income,  interest  expense,  and  net  interest  income,  for  the  periods
     indicated,  is shown below.  The effect of a change in average  balance has
     been  determined by applying the average rate in the earlier  period to the
     change in average balance in the later period, as compared with the earlier
     period. The effect of a change in the average rate paid has been determined
     by applying the average  balance in the earlier period to the change in the
     average rate paid in the later period, as compared with the earlier period.
     Changes  resulting  from  average  balance/rate  variances  are included in
     changes resulting from volume.

<TABLE>
<CAPTION>

                                                             December 31, 1996
                                                             Compared to 1995
                                                        Increase (Decrease) Due to
                                                   -----------------------------------
                                                     Volume        Rate        Change
                                                   ---------    ---------    ---------
        <S>                                        <C>          <C>          <C>
        Interest earned on:
        Interest-bearing deposits ..............   $  (2,801)   $     250    $  (2,551)
        Investment securities available for sale     (45,695)       5,277      (40,418)
        Investment securities held to maturity .       4,743          699        5,442
        Federal funds sold .....................      98,588       (3,632)      94,956
        Loans, net .............................     378,955      (37,329)     341,626
                                                   ---------    ---------    ---------
           Total interest income ...............     433,790      (34,735)     399,055
                                                   ---------    ---------    ---------

        Interest paid on:
        Now deposits ................                 27,268      (13,869)      13,399
        Money market deposits .......                 10,942          145       11,087
        Savings deposits ............                (15,543)                  (15,543)
        Time deposits ...............                230,462        2,793      233,255
        Short-term borrowings .......                (77,371)     (22,052)     (99,423)
                                                   ---------    ---------    ---------
           Total interest expense ...                175,758      (32,983)     142,775
                                                   ---------    ---------    ---------
        Change in net interest income              $ 258,032    $  (1,752)   $ 256,280
                                                   =========    =========    =========

                                                             December 31, 1995
                                                             Compared to 1994
                                                        Increase (Decrease) Due to
                                                   -----------------------------------
                                                     Volume        Rate        Change
                                                   ---------    ---------    ---------
        Interest earned on:
        Interest-bearing deposits                  $ (88,627)   $  24,063    $ (64,564)
        Investment securities available for sale     (26,425)      40,300       13,875
        Investment securities held to maturity        14,650        3,938       18,588
        Federal funds sold                           (10,319)      16,208        5,889
        Loans, net                                   721,863      310,132    1,031,995
                                                   ---------    ---------    ---------
        Total interest income                        611,142      394,641    1,005,784
                                                   ---------    ---------    ---------

        Interest paid on:
        Now deposits ................                 (9,219)      30,495       21,276
        Money market deposits .......                    (43)      12,511       12,468
        Savings deposits ............                (79,202)                  (79,202)
        Time deposits ...............                310,228      142,507      452,735
        Short-term borrowings .......                109,959        6,158      116,117
                                                   ---------    ---------    ---------
           Total interest expense ...                331,723      191,671      523,394
                                                   ---------    ---------    ---------
        Change in net interest income              $ 279,419    $ 202,970    $ 482,390
                                                   =========    =========    =========

</TABLE>

<PAGE>
                                       18


INVESTMENTS

As of December 31, 1996 investment securities comprised approximately 14% of the
Company's  assets  and  loans  comprised  approximately  70% of the  assets.  In
addition,  the  Bank  has  entered  into  Federal  Funds  transactions  with its
principal  correspondent banks, and acts as a net seller of such funds. The sale
of Federal Funds amounts to a short-time loan from the Bank to another bank.

Investment  securities  available for sale (carried at estimated fair value) and
held to maturity  (carried at amortized  cost) at December 31, 1996 and 1995 are
present in the following table:


<TABLE>
<CAPTION>

                                                     Available For Sale securities
                                           -------------------------------------------------
                                            Amortized   Unrealized   Unrealized      Fair
                                              Cost        Gains        Losses        Value
                                           ----------   ----------   ----------   ----------

        December 31, 1996:
        <S>                                <C>          <C>          <C>          <C>
        U.S. Treasury and
          U.S. Goverment agencies          $1,399,708   $       60   $    1,361   $1,398,407
        Mortgage-backed securities          3,928,861       20,054       64,106    3,884,809
                                           ----------   ----------   ----------   ----------
        Total debt securities ....          5,328,569       20,114       65,467    5,283,216
        Equity securities ........              6,156                                  6,156
                                           ----------   ----------   ----------   ----------
        Total ...................          $5,334,725   $   20,114   $   65,467   $5,289,372
                                           ==========   ==========   ==========   ==========
        December 31, 1995:
        U.S. Treasury and
          U.S. Government agencies         $1,698,753   $    5,877   $   16,316   $1,688,313
        Mortgage-backed securities          4,015,599       48,212       50,735    4,013,077
                                           ----------   ----------   ----------   ----------
        Total debt securities ....          5,714,352       54,089       67,051    5,701,390
        Equity securities ........              5,440                                  5,440
                                           ----------   ----------   ----------   ----------
        Total ....................         $5,719,792   $   54,089   $   67,051   $5,706,830
                                           ==========   ==========   ==========   ==========

                                                             Held To Maturity
                                           -------------------------------------------------
                                            Amortized   Unrealized   Unrealized      Fair
                                              Cost        Gains        Losses        Value
                                           ----------   ----------   ----------   ----------
        December 31, 1996:
        State and political subdivisions   $3,038,000   $  136,335   $      215   $3,174,120
        Other securities ...............      156,200                                156,200
                                          -----------   ----------   ----------   ----------
        Total ..........................   $3,194,200   $  136,335   $      215   $3,330,320
                                           ==========   ==========   ==========   ==========
        December 31, 1995:
        State and political subdivisions   $2,919,777   $   86,112   $    1,725   $3,004,164
        Other securities ...............      139,300                                139,300
                                           ----------   ----------   ----------   ----------
        Total ..........................   $3,059,077   $   86,112   $    1,725   $3,143,464
                                           ==========   ==========   ==========   ==========


</TABLE>

<PAGE>
                                       19


     The  following  table sets forth the  maturities  and the weighted  average
     yield of each type of investment  securities on an amortized  cost basis at
     December 31, 1996.

<TABLE>
<CAPTION>
                                                  After one    After one
                                                  year but     year but
                                       Within      within       within         After
                                      one year    five years   ten years     ten years     Total
                                     ----------   ----------   ----------   ----------   ----------
        Amount:
        <S>                          <C>          <C>          <C>          <C>          <C>
        U.S. Treasury and
          U.S. Government Agencies   $  499,785   $  399,923   $  500,000                $1,399,708
        Mortgage-backed securities                 1,239,424      504,477   $2,184,960    3,928,861
        State and municipal ......       75,000      718,026    1,646,060      598,914    3,038,000
                                     ----------   ----------   ----------   ----------   ----------
                                     $  574,785   $2,357,373   $2,650,537   $2,783,874    8,366,569
                                     ==========   ==========   ==========   ==========   ==========
        Other securities .........                                                          162,356
                                                                                         ----------
                                                                                         $8,528,925

        Weighted average yield:
        U.S. Treasury and
          U.S. Government Agencies        4.24%        5.30%        8.00%
        Mortgage-backed securities                     6.61%        7.57%        5.95%
        State and municipal ......        3.75%        4.96%        5.00%        5.55%
                                     ----------   ----------   ----------   ----------
                                          4.17%        5.89%        6.09%        5.86%
                                     ==========   ==========   ==========   ==========

</TABLE>



     There are no  investments in the  obligations of any state or  municipality
     which  exceed 10% of the  Company's  stockholders'  equity at December  31,
     1996.

     Distributions  of  maturities  for  mortgage-backed  securities is based on
     expected final maturities which may be different from contractual terms.

LOAN PORTFOLIO

The  Bank  engages  in  a  full  compliment  of  lending  activities,  including
commercial, consumer and real estate loans.

Commercial lending is directed  principally  towards businesses whose demand for
funds fall  within  the  Bank's  legal  lending  limits and which are  potential
deposit  customers of the Bank.  This category of loans  includes  loans made to
individual,  partnership or corporate  borrowers,  and obtained for a variety of
business purposes.

The Bank's  real  estate  loans  consist of  residential  and  commercial  first
mortgage loans, second mortgage financing,  and residential  construction loans.
This  category  of loans  also  includes  home  equity  loans  secured by second
mortgages on residences of borrowers  for a variety of purposes  including  home
improvements, education, and other personal expenditures.

The Bank's consumer loans consist  primarily of installment loans to individuals
for  personal,  family and household  purposes,  including  automobile  loans to
individuals and pre-approved lines of credit.



<PAGE>
                                       20



The following table present various  categories of loans contained in the Bank's
loan  portfolio  as of December  31,  1996 and 1995 and the total  amount of all
loans for such periods:

<TABLE>
<CAPTION>

                                                               Amount
                                                    ----------------------------
        Type of Loan                                    1996              1995
        -----------------------------------------   ------------    ------------
        Domestic:
           <S>                                      <C>             <C>
           Commercial, financial and agricultural   $  4,797,874    $  5,273,585
           Real estate construction .............      6,935,994       5,315,643
           Real estate mortgage .................     25,921,872      21,522,225
           Consumer .............................      4,604,519       4,767,349
                                                    ------------    ------------
                                                      42,260,259      36,878,802
           Allowance for loan losses ............       (454,820)       (427,661)
                                                    ------------    ------------
                                                    $ 41,805,439    $ 36,451,141
                                                    ============    ============
</TABLE>





The  following  table shows the  maturities of certain loan types as of December
31, 1996. Also, provided are the amounts due after one year classified according
to the sensitivity to changes in interest rates.

<TABLE>
<CAPTION>
                                                 Due in 1         Due in 1      Due After
                                                Year or Less     To 5 Years      5 years        Total
                                                ------------     -----------   -----------   -----------
        <S>                                      <C>             <C>           <C>           <C>
        Commercial, financial and agricultural   $ 2,558,572     $ 2,210,408   $    28,894   $ 4,797,874
        Real estate construction .............     4,798,925       2,131,943         5,126     6,935,994
                                                ------------     -----------   -----------   -----------
          Total ..............................   $ 7,357,497     $ 4,342,351   $    34,020   $11,733,868
                                                ============     ===========   ===========   ===========

        Loans due after 1 year with predetermined interest rates $   828,755                 $   828,755
        Loans due after 1 year with floating rates                 3,513,596   $    34,020     3,547,616
                                                                 -----------   -----------   -----------
                                                                 $ 4,342,351   $    34,020   $ 4,376,371
                                                                 ===========   ===========   ===========
</TABLE>


Accrual  of  interest  is  discontinued  on a loan when  management  of the Bank
determines,  upon  consideration  of economic  and  business  factors  affecting
collection efforts, that collection of interest is doubtful.

Impaired  loans  totaled  $56,000 and $32,000 as of December  31, 1996 and 1995,
respectively.

Interest  income which would have been recorded on impaired  loans had the loans
been current in accordance  with their original  terms and had been  outstanding
throughout  the period or since  origination  and the interest  income  actually
recorded was insignificant.


Allowance for Loan Losses

In  considering  the adequacy of  allowance  for  possible  loan  losses,  it is
management's  view that commercial  loans generally have greater risk than other
categories of loans in the loan portfolio.  However, the great majority of these
commercial  loans at December  31,  1996 and 1995 were made on a secured  basis,
such collateral consisting primarily of equipment.  Management believes that the
secured  condition of the preponderant  portion of its commercial loan portfolio
greatly reduces any risk of loss inherently present in commercial loans.

<PAGE>
                                       21


The Company's consumer loan portfolio is also well secured. At December 31, 1996
and  1995,  the  majority  of the  Company's  consumer  loans  were  secured  by
collateral  primarily  consisting  of  automobiles,  boats,  and other  personal
property.  Management  believes  that these loans  involve  less risk than other
categories of loans.

The Company's Board of Directors  monitors the loan portfolio  monthly to enable
it to evaluate the  adequacy of the  allowance  for loan  losses.  The loans are
rated and allowance  established based on the assigned rating. The provision for
loan  losses  charged  to  operating  expenses  is  based  on  this  established
allowance.  Factors  considered  by  the  Board  in  rating  the  loans  include
delinquent loans,  underlying  collateral value,  payment history, and local and
general economic conditions affecting collectibility.


SUMMARY OF LOAN LOSS EXPERIENCE

An analysis of the Bank's loan loss  experience  is furnished  in the  following
table for the years ended December 31, 1996 and 1995:

<TABLE>
<CAPTION>
                                                                      1996         1995
                                                                   ---------     ---------
        <S>                                                        <C>           <C>
        Balance at beginning of year ...........................   $ 427,662     $ 353,009
                                                                   ---------     ---------
        Charge-offs:
           Domestic -
             Commercial, financial and agricultrual ............   $ (18,815)
             Real estate construction
             Real estate mortgage ..............................                    (2,160)
             Consumer ..........................................     (70,844)      (14,020)
                                                                   ---------     ---------
                Total charge-offs ..............................     (89,659)      (16,180)
                                                                   ---------     ---------
        Recoveries:
           Domestic -
             Commercial, financial and agricultural
             Real estate construction
             Real estate mortgage ..............................       2,160
             Consumer ..........................................      24,657         5,833
                                                                   ---------     ---------
                Total recoveries ...............................      26,817         5,833
                                                                   ---------     ---------
        Net (charge-offs) recoveries ...........................     (62,842)      (10,347)
                                                                   ---------     ---------
        Additions charged to operations ........................      90,000        85,000
                                                                   ---------     ---------
        Balance at end of year .................................   $ 454,820     $ 427,662
                                                                   =========     =========

        Ratio of net charge-offs  (recoveries) during the period
        to average loans outstanding during the period .........      0.16%         0.03%
                                                                   =========     =========

</TABLE>

<PAGE>
                                       22




     The Company's  allocation of the allowance for loan losses according to the
     amount deemed to be reasonably  necessary to absorb potential losses within
     each loan category and the percent of loans in each category to total loans
     is presented in the following tables:

<TABLE>
<CAPTION>
                                                      December 31,
                                                 -------------------
                                                   1996       1995
                                                 --------   --------
        Allocation of Allowance for Loan  Losses
        by Loan Type
        ----------------------------------------
                                                  Amount     Amount
                                                 --------   --------
        <S>                                      <C>        <C>
        Commercial, financial and agricultural   $ 54,578   $ 58,628
        Real estate - construction ...........     72,772     64,054
        Real estate - mortgage ...............    277,440    225,074
        Consumer .............................     50,030     79,906
                                                 --------   --------
                                                 $454,820   $427,662
                                                 ========   ========

                                                  Percent    Percent
                                                 --------   --------
        Loans Types as a Percentage of Total  Loans
        ------------------------------------------------

        Commercial, financial and agricultural      12%        14%
        Real estate - construction ...........      16%        15%
        Real estate - mortgage ...............      61%        58%
        Consumer .............................      11%        13%
                                                 --------   --------
                                                   100%       100%
                                                 ========   ========

</TABLE>




DEPOSITS

The  Bank  offers a full  range of  interest-bearing  and  non-interest  bearing
deposit amounts,  including commercial and retail checking accounts,  negotiable
order of withdrawal ("NOW") accounts, super NOW accounts, public funds accounts,
money market accounts with limited  transactions  and a variable  interest rate,
individual retirement accounts,  regular  interest-bearing  savings account, and
certificates  of deposit with fixed and  variable  rates and a range of maturity
date options. The sources of deposits are residents,  business, and employees of
business  within  the  Bank's  market  area,   obtained   through  the  personal
solicitation of the Bank's officers and directors, direct mail solicitation, and
advertisements  published in the local media. The Bank pays competitive interest
rates  on time  and  savings  deposits  up to the  maximum  permitted  by law or
regulation.  In addition,  the Bank has implemented a competitive service charge
fee schedule,  covering such matters as maintenance  fees on checking  accounts,
per item  processing fees on checking  accounts,  returned check charges and the
like.


<PAGE>
                                       23




The following table presents,  for the periods indicated,  the average amount of
and average rate paid on each of the following deposit categories:

<TABLE>
<CAPTION>

        Year Ended December 31, 1996
        ------------------------------
                                          Average         Average
                                           Amount        Rate Paid
                                        -----------      ---------
        Deposit Category
<S>                                     <C>                  <C>
        Non-interest bearing deposits   $ 7,839,227           n/a
        NOW  deposits ...............     9,291,178          3.74%
        Money market deposits .......     1,690,102          3.80%
        Savings deposits ............     6,945,750          3.50%
        Time deposits ...............    21,465,200          5.75%

        Year Ended December 31, 1995
        -----------------------------
                                          Average         Average
                                           Amount        Rate Paid
                                        -----------      ---------
        Deposit Category
        Non-interest bearing deposits   $ 6,534,999           n/a
        Now  deposits ...............     8,561,434          3.90%
        Money market deposits .......     1,402,700          3.79%
        Savings deposits ............     7,389,304          3.50%
        Time deposits ...............    17,453,221          5.73%

</TABLE>

The following is a summary of the remaining  maturities of time  certificates of
deposit of $100,000 or more outstanding at December 31, 1996:

<TABLE>
<CAPTION>
                                               Certificates
                                                of Deposit
                                               ------------
        <S>                                    <C>
        Three months or less ...............   $2,767,094
        Over three months through six months    1,742,324
        Over six months through one year ...    3,168,104
        Over one year ......................    1,286,016
                                               ----------
                                               $8,963,538
                                               ==========
</TABLE>



Return on Equity and Assets

Returns on average  consolidated assets and average  consolidated equity for the
periods indicated are as follows:

<TABLE>
<CAPTION>
                                                 Years Ended December 31,
                                                 ------------------------
                                                    1996           1995
                                                 ---------      ---------

        <S>                                         <C>            <C>
        Return on average assets .............       1.87%          1.85%
        Return on average equity .............      15.78%         15.24%
        Average equity to average assets ratio      11.84%         12.16%
        Dividend payout ratio ................        --             --

</TABLE>

<PAGE>
                                       24

Item 7.  Financial Statements and Supplementary Data.
-----------------------------------------------------

The  response  to this Item is  submitted  in a separate  section of this report
commencing on page 28.



Item 8.  Changes and Disagreements with Accountants on Accounting and Financial
-------------------------------------------------------------------------------
         Disclosures.
         ------------

There are no changes in or  disagreements  with  accountants  on accounting  and
financial disclosures.


                                    PART III


Item 9.  Directors and Executive Officers of the Registrant.
------------------------------------------------------------


The Company's directors and executive officers are as follows:
<TABLE>
<CAPTION>
                Name                               Position with Company
--------------------------------------------------------------------------
        <S>                                     <C>
          E. James Burnsed *                         Class I Director,
                                                       President and
                                                  Chief Executive Officer

           J. Carl Cox, Jr.                          Class I Director


           L. Carlton Gill                           Class I Director,
                                                Vice Chairman of the Board


         Thomas A. Lancaster                         Class II Director


         Juanita B. Phillips                        Class II Director,


        James T. Roberts, Sr.                        Class II Director


            James W. Royal                          Class III Director,
                                                         Secretary


           Jimmy F. Sommers                         Class III Director


         Charles L. Stafford                        Class III Director,
                                                   Chairman of the Board
<FN>
* Mr. Burnsed is the only executive officer of the Company.
</FN>
</TABLE>

Each of the above  persons has been a director of the Company  since March 1989.
The Company has a classified Board of Directors whereby one-third of the members
of the Board of Directors are elected each year at the Company's  Annual Meeting
of  Shareholders.  Upon such  election,  each  director will serve for a term of
three years. The Company's  officers are appointed by the Board of Directors and
hold office at the will of the Board.

E. James Burnsed, age 57, has served as President and Chief Executive Officer of
the Company  since  March 1989 and of the Bank since  April  1989.  From 1958 to
1989, Mr. Burnsed served in various capacities with First Union Bank of Savannah
(formerly  Savannah Bank and Trust Company),  including most recently,  Regional
Consumer Banking Manager.

<PAGE>
                                       25

J. Carl Cox,  Jr.,  age 54, has been the owner,  manager  and  operator of J. C.
Logging, which is engaged in the logging business, for the past 25 years.

L. Carlton Gill, age 56, has been employed by S. A. Allen, Inc. as a procurement
forester since 1964.

Thomas A.  Lancaster,  age 64, has served as a Vice  President  - Manager of the
Roofing Department and a Director of Metal Crafts, Inc., Savannah, Georgia since
1969.

Juanita  B.  Phillips,  age 68,  has  been  employed  by The New  England  as an
insurance agent since 1976.

James T. Roberts, Sr., age 52, has been the owner-manager of Roberts GMC Trucks,
Richmond Hill, Georgia since 1969.

James W. Royal, age 48, has served as Secretary of the Company since March 1994.
In addition,  he has been  President  of Royal  Brothers,  Inc.,  engaged in the
retail hardware  business in the Richmond Hill area under the name of Royal True
Value and Village True Value Hardware Stores, since 1980.

Jimmy F. Sommers, age 52, has been Vice President of the Sommers Company,  Inc.,
a convenience store and petroleum distribution business, since 1972.

Charles L. Stafford,  age 54, has served as Chairman of the Board of the Company
since March 1989.  In addition,  he is engaged in the land  development/property
management  business  through a number of  companies  that he owns or  controls.
Since  1975,  Mr.  Stafford  has  been  President  of C.  L.  Stafford  Building
Contractors, Inc.

Robert T.  Thompson,  Jr.,  age 56, has been  employed  by CSX  Incorporated,  a
railroad  company,  since 1962.  In addition from 1989 to 1990, he served as the
owner of The Hub, a men's clothing store and from 1985 to 1989, he served as the
general manager for Superior Sanitation Service, Inc.

The directors do not hold any other directorships in reporting companies.

There are no family relationships  between any director or executive officer and
any other director or executive officer of the Company.

No director or executive  officer was involved in any bankruptcy  petition filed
by or against any business  with which the  director or executive  was a general
partner or executive  officer at the time of the  bankruptcy or within two years
prior to that time.

No director or executive  officer was involved in any  conviction  in a criminal
proceeding  or  subject  to a pending  criminal  proceeding  (excluding  traffic
violations or other minor offenses).

No director or executive  officer was subject to any order,  judgment or decree,
not  subsequently  reversed,  suspended  or vacated,  of any court of  competent
jurisdiction  permanently  or  temporarily  enjoining,  barring,  suspending  or
otherwise limiting his or her involvement in any type of business, securities or
banking activities.

No director or executive officer was found by a court of competent jurisdiction,
the SEC or the Commodity  Futures Trading  Commission to have violated a federal
or state securities or commodities law.

<PAGE>
                                       26
Item 10.  Executive Compensation.
--------  -----------------------

The following table provides certain summary information concerning compensation
paid or  accrued  by the Bank to or on  behalf  of the  Bank's  Chief  Executive
Officer  for the years  ended  December  31,  1996,  1995,  and  1994.  No other
executive officer's compensation exceeded $100,000 during 1996, 1995 or 1994.

<TABLE>
<CAPTION>
           Name and                                                               Long-term
       Principal Position              Annual Compensation Table                 Compensation
    -------------------------  --------------------------------------------     -------------
                                                              Other Annual                            Other
                               Year     Salary     Bonus       Compensation     Stock Options      Compensation
      <S>                      <C>     <C>        <C>            <C>              <C>                 <C>
       E. James Burnsed
      President and Chief                                                                                   2
       Executive Officer       1996    $90,000    $32,700                                             $5,821
                                                                                                            2
                               1995    $90,000    $41,200                                             $6,673
                                                                        1                                   2
                               1994    $80,000    $41,200        $21,412          4,000               $5,886

<FN>
1 Represents the value of amounts earned on exercise of warrants and paid during
the fiscal year,  calculated  by taking the  difference  between the fair market
value of the 6,571 warrants  purchased on the exercise date  ($15.00/share)  and
the exercise  price  (11.74/share).
2 Represents  the amount earned but not paid from the  Company's  profit-sharing
plan.
</FN>
</TABLE>

Item 11. Security Ownership of Certain Beneficial Owners and Management.
------------------------------------------------------------------------

The following table sets forth certain information as of December 31, 1996, with
respect to ownership of the  outstanding  common stock of the Company by (i) all
persons known to the Company to own beneficially more than 5% of the outstanding
shares of the common  stock of the Company,  (ii) each  director of the Company,
and (iii) all executive officers and directors of the Company as a group.

<TABLE>
<CAPTION>
        =================================== =============================== =============================
          NAME AND ADDRESS OF BENEFICIAL         AMOUNT AND NATURE OF             PERCENT OF CLASS
                                                                  1
                      OWNER                       BENEFICIAL OWNER
        =================================== =============================== =============================
             <S>                                       <C>                               <C>
                 E. James Burnsed                            2
                  173 Davis Road                       33,599                            6.40%
             Richmond Hill, GA 31324
        =================================== =============================== =============================
                 J. Carl Cox, Jr.                            3
                 7346 Highway 17                       20,015                            3.82%
             Richmond Hill, GA 31324
        =================================== =============================== =============================
                 L. Carlton Gill                             4
                   P. O. Box 59                        35,735                            6.81%
             Richmond Hill, GA 31324
        =================================== =============================== =============================
               Thomas A. Lancaster                           5
                  P. O. Box 1448                       15,602                            2.97%
             Richmond Hill, GA 31324
        =================================== =============================== =============================
               Juanita B. Phillips                           6
                197 Ogeechee Drive                     14,717                            2.81%
             Richmond Hill, GA 31324
        =================================== =============================== =============================
                 James T. Roberts                            7
                415 Whitehall Lane                     25,962                            4.95%
             Richmond Hill, GA 31324
        =================================== =============================== =============================
                  James W. Royal                             8
                  P. O. Box 1096                       21,263                            4.05%
             Richmond Hill, GA 31324
        =================================== =============================== =============================
                 Jimmy F. Sommers                            9
                  P. O. Box 556                        29,635                            5.65%
             Richmond Hill, GA 31324
        =================================== =============================== =============================
               Charles L. Stafford                           10
                   P.O. Box 460                        46,196                            8.81%
             Richmond Hill, GA 31324
        =================================== =============================== =============================
             Robert T. Thompson, Jr.                         11
            2369 Fort McAllister Road                  21,395                            4.08%
             Richmond Hill, GA 31324
        =================================== =============================== =============================

<PAGE>
                                       27
<FN>

1 Information  relating  to  beneficial  ownership  by  directors  is based upon
information furnished by each director using "beneficial Ownership" concepts set
forth in rules  promulgated  by the  Securities  and Exchange  Commission  under
Section 13(d) of the Securities Exchange Act of 1934.

2 Includes 20,000 shares subject to presently  exercisable stock options granted
in connection  with Mr.  Burnsed's  Employment  Agreement.  Of the 33,599 shares
beneficially owned by Mr. Burnsed,  7,256 shares are owned  individually,  5,653
shares are in his IRA,  200 shares are owned by his wife  individually,  and 490
shares are in his wife's IRA.

3 Of  the  20,015  shares  beneficially  owned  by Mr. Cox,  19,815  shares are
owned  individually  and 200 shares are owned by his wife.

4 Of the 35,735 shares beneficially  owned by Mr. Gill, 22,265 shares are owned
jointly  with  his  wife, 1,070 shares are  in  his IRA, 1,200 shares are in his
wife's IRA, and 10,600 shares are owned by the Estate of Louis C. Gill, of which
he is the Executor, and 600 shares are owned by his children.

5 Of the 15,602 shares beneficially  owned by Mr.  Lancaster,  11,202 shares are
owned  individually,  3,300  shares are in his IRA, 700 shares are in his wife's
IRA, and 400 shares are owned by his children.

6 Of  the 14,717 shares beneficially owned  by  Mrs. Phillips, 4,740 shares  are
owned individually, 6,277 shares  are  in  her IRA and 3,700 are  owned  by  her
children.

7 Of  the  25,962  shares  beneficially  owned by Mr. Roberts, 20,487 shares are
owned  individually, 2,975 shares  are  in  his IRA, 500 shares are owned by his
wife, and 2,000 shares are owned by his children.

8 Of the 21,263 shares beneficially owned by Mr. Royal,  19,263 shares are owned
individually, 1,800 shares are in his IRA, and 200 shares are owned jointly with
his children.

9 Of the  29,635  shares  beneficially  owned  by Mr. Sommers, 28,995 shares are
owned individually and 640 shares are owned jointly with his children.

10 Of the 46,196  shares  beneficially  owned by Mr. Stafford, 17,700 shares are
owned individually, 2,673 shares are in his IRA,  1,550  shares are owned by his
wife,  1,689  shares are in his wife's IRA, 250 shares are owned by his son, and
22,334 share are owned by C. L. Stafford Profit Sharing Plan.

11 Of the 21,395 shares beneficially  owned by Mr.  Thompson,  18,009 shares are
owned individually,  1,079 shares are in his IRA, 1,807 shares are in his wife's
IRA and 500 shares are owned by his children.

</FN>
</TABLE>


The  Company's  common stock  beneficially  owned by all directors and executive
officers as a group as of March 18, 1997 (10  persons)  totaled  264,119  shares
representing 50.35% of the Company's common stock.

The Company knows of no arrangements  which may result in a change of control of
the Company.

Item 12.  Certain Relationships and Related Transactions.
---------------------------------------------------------


The Company's directors,  executive officers, and certain business organizations
and  individuals  associated  therewith,  have  been  customers  of and have had
banking  transactions  with Bryan Bank & Trust and are expected to continue such
relationships  in the  future.  Pursuant  to such  transactions,  the  Company's
directors  and executive  officers  from time to time have  borrowed  funds from
Bryan Bank & Trust for various business and personal  reasons.  These loans were
made in the ordinary  course of business,  were made on  substantially  the same
terms, including interest rates and collateral,  as those prevailing at the time
for comparable  transactions with persons not affiliated with the Company or the
Bank and did not involved more than the normal risk of collectibility or present
other unfavorable features.

<PAGE>
                                       28


Item 13. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
-------------------------------------------------------------------------

   (a) 1. Financial Statements.
          --------------------
          The  following  financial  statements  and  accountant's  report  have
          been filed as item 7 in Part II of this report:

           Independent Auditor's Report

           Consolidated Balance Sheets - December 31, 1996 and 1995

           Consolidated  Statements  of  Income  -   Years  ended  December  31,
           1996 and 1995

           Consolidated Statements of Shareholders' Equity - Years ended
           December 31, 1996 and 1995

           Consolidated Statements  of  Cash  Flows  -  Years ended December 31,
           1996 and 1995

           Notes to Consolidated Financial Statements


        2. Financial Statement Schedules.
           -----------------------------
           Financial statement schedules are omitted as the required information
           is inapplicable, or the information is  presented  in  the  financial
           statements or related notes.

        3. Exhibits.
           --------
           The following  exhibits  are  filed with or incorporated by reference
           into  this report.  The exhibits which are denominated by an asterisk
           (*) were  previously filed as a part of, and are hereby  incorporated
           by  reference  from  either  (i) a  Registration  Statement  on  Form
           S-18   under   the   Securities   Act   of   1933 for the Registrant,
           Registration  No.  33-28514-A ("S-18"),  (ii)  Amendment No. 1 to the
           Company's  Registration Statement on Form S-18 ("S-18  Amendment") or
           (iii) The Annual Report on Form 10-K for the  year ended December 31,
           1990 ("1990  10-K").  The exhibit number  corresponds  to the exhibit
           number in the referenced document.

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

             *3.1       -  Articles of Incorporation dated March 6, 1989 (S-18).

             *3.2       -  By-Laws adopted March 6, 1989 (S-18).

            *22.1       -  Subsidiaries of the Registrant (1990 10-K).



   (b)    Reports on Form 8-K.
          -------------------

          No  reports  on Form 8-K were  required  to be  filed  for the  fourth
          quarter of 1996.

<PAGE>
                                       29



                          INDEPENDENT AUDITOR'S REPORT


The Board of Directors and Shareholders
Bryan Bancorp of Georgia, Inc.
Richmond Hill, Georgia



We have audited the accompanying consolidated balance sheets of Bryan Bancorp of
Georgia,  Inc. and  subsidiary as of December 31, 1996 and 1995, and the related
consolidated statements of income,  shareholders' equity, and cash flows for the
years then ended.  These  financial  statements  are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

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

In our opinion the consolidated  financial  statements referred to above present
fairly,  in all material  respects,  the financial  position of Bryan Bancorp of
Georgia,  Inc. and  subsidiary  at December 31, 1996 and 1995 and the results of
their  operations  and their cash  flows for the years then ended in  conformity
with generally accepted accounting principles.




/s/Tiller, Stewart & Company, LLC
Savannah, Georgia
January  30, 1997



<PAGE>
                                       30

                  BRYAN BANCORP OF GEORGIA, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 1996 AND 1995

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                       1996            1995
                                                   ------------    ------------

ASSETS
<S>                                                <C>             <C>
Cash and due from banks ........................   $  2,296,408    $  2,406,895
Federal funds sold .............................      5,530,000       2,471,000
Investment securities available for sale .......      5,289,372       5,706,830
Investment securities held to maturity
 (estimated market value of $3,330,320
  in 1996 and $3,143,464 in 1995) ..............      3,194,200       3,059,077
Loans ..........................................     42,260,259      36,878,802
Less allowance for loan losses .................       (454,820)       (427,662)
                                                   ------------    ------------
          Loans, net ...........................     41,805,439      36,451,140
Interest receivable ............................        373,089         367,242
Premises and equipment, net ....................      1,456,993       1,088,777
Other assets ...................................        267,409         246,154
                                                   ------------    ------------
     Total assets ..............................   $ 60,212,910    $ 51,797,115
                                                   ============    ============

LIABILITIES
Deposits:
  Noninterest-bearing ..........................   $  9,624,367    $  7,563,837
  Interest-bearing .............................     42,979,709      35,933,211
                                                   ------------    ------------
     Total deposits ............................     52,604,076      43,497,048
Federal Home Loan Bank advances ................        380,000       1,300,000
Other borrowed funds ...........................         53,195          49,974
Interest payable ...............................        227,940         220,787
Other liabilities ..............................        177,195         355,299
                                                   ------------    ------------
     Total liabilities .........................     53,442,406      45,423,108
                                                   ------------    ------------

SHAREHOLDERS' EQUITY
Common stock - par value $1 per share;
    authorized 10,000,000 shares;
    issued 521,758 shares ......................        521,758         521,758
Additional paid-in capital .....................      4,869,485       4,869,485
Retained earnings ..............................      1,715,073       1,048,341
Net unrealized (loss) on investment
    securities available for sale ..............        (27,212)         (7,777)
                                                   ------------    ------------
                                                      7,079,104       6,431,807
Treasury stock at cost, 17,200 shares in 1996
     and 4,600 shares in 1995 ..................       (308,600)        (57,800)
                                                   ------------    ------------
     Total shareholders' equity ................      6,770,504       6,374,007
                                                   ------------    ------------
     Total liabilities and shareholders' equity    $ 60,212,910    $ 51,797,115
                                                   ============    ============


<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>

<PAGE>
                                       31

                  BRYAN BANCORP OF GEORGIA, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
                     YEARS ENDED DECEMBER 31, 1996 AND 1995

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                       1996            1995
                                                    -----------      -----------

INTEREST INCOME
<S>                                                 <C>              <C>
Loans .........................................     $ 3,898,485      $ 3,552,908
 Investment securities:
    Taxable ...................................         323,735          364,153
    Tax-exempt ................................         153,475          148,033
 Federal funds sold ...........................         141,655           46,699
 Deposits in other banks ......................           9,581           16,083
                                                    -----------      -----------
     Total interest income ....................       4,526,931        4,127,876
                                                    -----------      -----------

INTEREST EXPENSE
Deposits ......................................       1,888,093        1,645,895
Federal Home Loan Bank advances ...............          22,718           91,045
Other borrowed funds ..........................           4,700           35,796
                                                    -----------      -----------
     Total interest expense ...................       1,915,511        1,772,736
                                                    -----------      -----------
NET INTEREST INCOME ...........................       2,611,420        2,355,140
PROVISION FOR LOAN LOSSES .....................          90,000           85,000
                                                    -----------      -----------
NET INTEREST INCOME AFTER
  PROVISION FOR LOAN LOSSES ...................       2,521,420        2,270,140
                                                    -----------      -----------

NONINTEREST INCOME
Service charges on deposit accounts ...........         368,628          303,653
Loan servicing fees ...........................         268,054          262,609
Other service charges and fees ................         118,247           68,602
Net realized (loss) on sales of available
    for sale securities .......................                              (80)
Other .........................................          93,707           75,403
                                                    -----------      -----------
                                                        848,636          710,187
                                                    -----------      -----------
NONINTEREST EXPENSES
Salaries and employee benefits ................       1,002,542          797,604
Occupancy .....................................          99,701           98,011
Equipment and processing expense ..............         129,088          137,183
Other .........................................         609,402          575,027
                                                    -----------      -----------
                                                      1,840,733        1,607,825
                                                    -----------      -----------

INCOME BEFORE INCOME TAXES ....................       1,529,323        1,372,502
PROVISION FOR INCOME TAXES ....................         508,000          456,000
                                                    -----------      -----------
NET INCOME ....................................     $ 1,021,323      $   916,502
                                                    ===========      ===========

Net income per share ..........................     $      2.01      $      1.77
                                                    ===========      ===========

Weighted average number of common shares ......         507,902          516,961
  outstanding .................................     ===========      ===========


<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>


<PAGE>
                                       32


                  BRYAN BANCORP OF GEORGIA, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                     YEARS ENDED DECEMBER 31, 1995 AND 1994

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                  Net
                                                                                                Unrealized
                                                                                                Gain (Loss)
                                                                                               on Investment
                                                                      Additional                Securities
                                                    Common Stock        Paid-In     Retained     Available    Treasury
                                                 Shares       Amount    Capital     Earnings     for Sale       Stock       Total
                                              ----------- ----------- ----------- ----------- -------------  ---------  ------------
<S>                                           <C>         <C>         <C>         <C>         <C>            <C>        <C>

BALANCE - DECEMBER 31, 1994 ................. $   521,758 $   521,758 $ 4,869,485 $   442,133 $    (291,435) $ (57,800) $ 5,484,141

  Net income ................................                                         916,502                               916,502

  Dividends paid - $.60 per share ...........                                        (310,294)                             (310,294)

  Sale of 1,000 shares of treasury stock ....                                                                   15,000       15,000

  Purchase of 1,000 shares of treasury stock                                                                   (15,000)     (15,000)

  Net changes in unrealized gain (loss) on
    investment securities available for sale                                                        283,658                 283,658
                                              ----------- ----------- ----------- ----------- -------------  ---------  ------------
BALANCE - DECEMBER 31, 1995 .................     521,758     521,758   4,869,485   1,048,341        (7,777)   (57,800)   6,374,007

  Net income ................................                                       1,021,323                             1,021,323

  Dividends paid - $.70 per share ...........                                        (354,591)                             (354,591)

  Purchase of 12,600 shares of treasury stock                                                                 (250,800)    (250,800)

  Net changes in unrealized gain (loss) on
    investment securities available for sale                                                        (19,435)                (19,435)
                                              ----------- ----------- ----------- ----------- -------------  ---------  ------------
BALANCE - DECEMBER 31, 1996 ................. $   521,758 $   521,758 $ 4,869,485 $ 1,715,073 $     (27,212) $(308,600) $ 6,770,504
                                              =========== =========== =========== =========== =============  =========  ============


<FN>

See notes to consolidated financial statements.
</FN>
</TABLE>


<PAGE>
                                       33


                  BRYAN BANCORP OF GEORGIA, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 1996 AND 1995

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                 1996          1995
                                                             -----------    -----------

OPERATING ACTIVITIES
<S>                                                          <C>            <C>
  Net income .............................................   $ 1,021,323    $   916,502
  Adjustments to reconcile net income
    to net cash provided by operating activities:
       Depreciation ......................................       107,856         79,941
       Amortization and accretion, net ...................           534         (2,466)
       Provision for loan losses .........................        90,000         85,000
       Net realized loss on available for sale securities                            80
       Changes in:
          Interest receivable ............................        (5,847)       (45,392)
          Other assets ...................................        (8,299)       (77,861)
          Interest payable ...............................         7,153         81,262
          Other liabilities ..............................      (178,104)       (25,794)
                                                             -----------    -----------
              Net cash provided by operating activities ..     1,034,616      1,011,272
                                                             -----------    -----------

INVESTING ACTIVITIES
  Net decrease in time deposits in other banks ...........                    1,188,000
  Net increase in federal funds sold .....................    (3,059,000)    (2,330,000)
  Proceeds from maturities of investment securities:
    Held to maturity securities ..........................        50,000        452,100
    Available for sale securities ........................       881,310        727,656
  Proceeds  from sales of  available  for sale  securities                      300,765
  Purchase of investment securities:
    Held to maturity securities ..........................      (181,900)      (495,792)
    Available for sale securities ........................      (500,000)      (300,957)
  Net increase in loans ..................................    (5,444,299)    (3,971,110)
  Real estate acquired through foreclosure ...............                      (65,500)
  Additions to premises and equipment ....................      (476,072)       (79,672)
                                                             -----------    -----------
              Net cash used for investing activities .....    (8,729,961)    (4,574,510)
                                                             -----------    -----------

FINANCING ACTIVITIES
  Net increase in deposits ...............................     9,107,028      2,997,797
  Federal Home Loan Bank advance proceeds ................       400,000      5,775,000
  Repayment of Federal Home Loan Bank advances ...........    (1,320,000)    (4,475,000)
  Net  increase (decrease) in other borrowings ...........         3,221        (63,628)
  Dividends paid .........................................      (354,591)      (310,294)
  Acquisition of treasury stock ..........................      (250,800)       (15,000)
  Sale of treasury stock .................................                       15,000
                                                             -----------    -----------
              Net cash provided by financing activities ..     7,584,858      3,923,875
                                                             -----------    -----------

Increase (decrease) in cash and cash equivalents .........      (110,487)       360,637

Cash and cash equivalents - beginning ....................     2,406,895      2,046,258
                                                             -----------    -----------

Cash and cash equivalents - ending .......................   $ 2,296,408    $ 2,406,895
                                                             ===========    ===========



<FN>

See notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
                                       34

                  BRYAN BANCORP OF GEORGIA, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 1996 AND 1995

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




1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


     Nature of  Operations  - Bryan  Bancorp of Georgia,  Inc.  (the  "Company")
     through  its  wholly-owned  subsidiary,  Bryan Bank & Trust  (the  "Bank"),
     provides a full range of  banking  services  to  individuals  and  business
     throughout Bryan and surrounding counties.

     Basis of Presentation - The consolidated  financial  statements include the
     accounts of the Company and its wholly-owned  subsidiary.  All intercompany
     balances  and  transactions  have  been  eliminated.   The  accounting  and
     reporting  policies  and  practices  of the  Company  conform to  generally
     accepted  accounting  principles and to general practice within the banking
     industry.  The  following  is a  summary  of the more  significant  of such
     policies and practices.

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

     Material estimates that are particularly  susceptible to significant change
     relate to the determination of the allowance for loan losses. The allowance
     for loan losses is maintained at a level which, in  management's  judgment,
     is  adequate  to  absorb  credit  losses  inherent  in the loan  portfolio.
     Management's  periodic evaluation of the adequacy of the allowance is based
     on the  Bank's  past  loss  experience,  known  and  inherent  risks in the
     portfolio,  adverse  situations  that may affect the borrower's  ability to
     pay, the estimated  value of the underlying  collateral,  current  economic
     conditions,  and other pertinent factors.  The allowance for loan losses is
     increased by charges to income and recoveries on loans  previously  charged
     off as  uncollectible.  Decreases  in the  allowance  occur as loans deemed
     uncollectible are charged to the allowance.

     Investment  Securities Available for Sale - Investments  available for sale
     are carried at market value.  The related  unrealized  gain or loss, net of
     tax, is included as a separate component of shareholders' equity.  Premiums
     and discounts are amortized and accreted using a method which  approximates
     a level  yield.  Gains and losses  from  dispositions  are based on the net
     proceeds and adjusted  carrying  amounts of the securities  sold, using the
     specific identification method.

     Investment  Securities  Held to Maturity -  Investment  securities  held to
     maturity  are stated at cost,  adjusted  for  amortization  of premiums and
     accretion of discounts  which are  recognized  as  adjustments  to interest
     income.  The Company  has the intent and  ability to hold these  investment
     securities  to maturity.  Premiums and discounts are amortized and accreted
     using a method  which  approximates  a level  yield.  Gains  and  losses on
     dispositions  are  based  on the net  proceeds  and the  adjusted  carrying
     amounts of the security sold, using the specific identification method.

     Loans - Effective  January 1, 1995, the Bank adopted Statement of Financial
     Accounting  Standards  No. 114 (as  amended  by No.  118),  "Accounting  by
     Creditors for Impairment of a Loan." SFAS 114 establishes the accounting by
     creditors for  impairment of loans by specifying  how allowances for credit
     losses related to certain loans should be  determined.  This statement also
     addresses   the   accounting  by  creditors  for  certain  loans  that  are
     restructured in a troubled debt restructuring. When a loan is impaired, the
     amount of the impairment is measured based on the present value of expected
     future cash flows discounted at the loan's effective interest rate.

<PAGE>
                                       35




     For collateral  dependent  loans,  impairment is measured based on a loan's
     observable  market price or the fair value of the collateral.  The adoption
     of  these  accounting  standards  did not  have a  material  effect  on the
     consolidated  financial  condition  and the  results of  operations  of the
     company as of the year ended December 31, 1995.

     Loans  that  management  has  the  intent  and  ability  to  hold  for  the
     foreseeable  future or until  maturity  or pay-off  are  reported  at their
     outstanding  principal amounts adjusted for any charge-offs,  the allowance
     for possible loan losses, and any deferred fees or costs. Interest on loans
     is  recognized  using the simple  interest  method  based on the  principal
     balance  outstanding.  Interest accruals  including accruals of interest on
     impaired loans are  discontinued  when either principal or interest becomes
     90 days  past  due,  or when in  management's  opinion,  after  considering
     economic  and  business  conditions  and  collection   efforts,   that  the
     borrower's  financial condition is such that it is not reasonable to expect
     such interest will be collected. Interest income is subsequently recognized
     only to the extent cash payments are received.

     Loan fees, net of direct origination costs, are deferred and amortized over
     the terms of the loans using a method which approximates a level yield.

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

     Income Taxes - Provisions for income taxes are based upon amounts  reported
     in the statements of income (after exclusion of non-taxable  income such as
     interest on state and  municipal  securities)  and include  deferred  taxes
     based on the  differences  between  financial  statement  and tax  bases of
     assets and  liabilities  using current enacted tax rates. As changes in tax
     laws or rates are enacted, deferred tax assets and liabilities are adjusted
     through the provision for income taxes.

     Net  Income  Per  Share - Net  income  per share is  computed  based on the
     weighted average number of common and common equivalent shares  outstanding
     during the year.

     Reclassifications  - Certain  amounts  in the 1995  consolidated  financial
     statements have been reclassified to conform to the 1996 presentation.

     Cash and Cash Equivalents - For purposes of reporting cash flows,  cash and
     cash equivalents include cash on hand and amounts due from banks.


2.  RESTRICTIONS ON CASH AND DUE FROM BANKS


     The Bank is required to maintain  certain  reserve  balances in the form of
     vault cash. Such reserve  requirements totaled  approximately  $338,000 and
     $241,000 at December 31, 1996 and 1995, respectively

<PAGE>
                                       36


3.  SECURITIES


     Debt and equity  securities have been classified  according to management's
     intent.  The amortized cost,  estimated  market value and gross  unrealized
     gains and losses on securities are as follows:

<TABLE>
<CAPTION>
                                                     Available For Sale Securities
                                           ------------------------------------------------
                                                          Gross        Gross
                                            Amortized    Unrealized   Unrealized     Fair
                                              Costs        Gains        Losses      Value
                                           ----------   ----------   ----------   ---------
        December 31, 1996:
        <S>                                <C>          <C>          <C>          <C>
        U.S. Treasury and
          U.S. Government agencies         $1,399,708   $       60   $    1,361   $1,398,407
        Mortgage-backed securities          3,928,861       20,054       64,106    3,884,809
                                           ----------   ----------   ----------   ----------
         Total debt securities ...          5,328,569       20,114       65,467    5,283,216
        Equity securities ........              6,156                                  6,156
                                           ----------   ----------   ----------   ----------
         Total ...................         $5,334,725   $   20,114   $   65,467   $5,289,372
                                           ==========   ==========   ==========   ==========
        December 31, 1995:
        U.S. Treasury and
          U.S. Government agencies         $1,698,753   $    5,877   $   16,316   $1,688,314
        Mortgage-backed securities          4,015,599       48,212       50,735    4,013,076
                                           ----------   ----------   ----------   ----------
        Total debt securities ....          5,714,352       54,089       67,051    5,701,390
        Equity securities ........              5,440                                  5,440
                                           ----------   ----------   ----------   ----------
        Total ....................         $5,719,792   $   54,089   $   67,051   $5,706,830
                                           ==========   ==========   ==========   ==========
</TABLE>
<TABLE>
<CAPTION>

                                                              Held To Maturity
                                           -------------------------------------------------
                                                          Gross        Gross
                                            Amortized   Unrealized   Unrealized      Fair
                                              Costs       Gains        Losses        Value
                                           ----------   ----------   ----------   ----------
        December 31, 1996:
        <S>                                <C>          <C>          <C>          <C>
        State and political subdivisions   $3,038,000   $  136,335   $      215   $3,174,120
        Other securities ...............      156,200                                156,200
                                           ----------   ----------   ----------   ----------
        Total ..........................   $3,194,200   $  136,335   $      215   $3,330,320
                                           ==========   ==========   ==========   ==========
        December 31, 1995:
        State and political subdivisions   $2,919,777   $   86,112   $    1,725   $3,004,164
        Other securities ...............      139,300                                139,300
                                           ----------   ----------   ----------   ----------
        Total ..........................   $3,059,077   $   86,112   $    1,725   $3,143,464
                                           ==========   ==========   ==========   ==========

</TABLE>




     Other securities  reported in  held-to-maturity  securities at December 31,
     1996 and 1995  represents  an  investment  in Federal  Home Loan Bank stock
     which is not traded on Exchanges and has only redemption capabilities.

     There were no sales of investment securities for sale during 1996. Proceeds
     from sales of  investment  securities  available  for sale during 1995 were
     $300,765 and resulted in gross realized losses of $80.

<PAGE>
                                       37


     The  amortized  cost  and  estimated  market  value of debt  securities  at
     December 31, 1996, by contractual maturity are as follows:

<TABLE>
<CAPTION>
                                          Available for sale         Held to maturity
                                       -----------------------   -----------------------
                                        Amortized     Market     Amortized      Market
                                          Cost         Value        Cost         Value
                                       ----------   ----------   ----------   ----------
        <S>                            <C>          <C>          <C>          <C>
        Due in one year or less ....   $  499,785   $  499,845   $   75,000   $   74,905
        Due after one year through
          five years ...............      399,923      398,562      718,026      738,605
        Due after five years through
          ten years ................      500,000      500,000    1,646,060    1,718,640
        Due after ten years ........                                598,914      641,970
        Mortgage-backed securities .    3,928,861    3,884,809
                                       ----------   ----------   ----------   ----------
                                       $5,328,569   $5,283,216   $3,038,000   $3,174,120
                                       ==========   ==========   ==========   ==========
</TABLE>



     Securities  with a carrying  amount of  $4,701,114 at December 31, 1996 and
     $4,917,622  at December 31, 1995 were pledged to secure  deposits of public
     funds and short-term obligations due the Federal Reserve Bank.


4.  LOANS


     Loans are summarized as follows:
<TABLE>
<CAPTION>

                                          December 31,
                                   ----------------------------
                                        1996            1995
                                   ------------    ------------
        <S>                        <C>             <C>
        Commercial real estate .   $ 17,839,771    $ 14,091,433
        Real estate construction      6,971,033       5,344,462
        Commercial .............      4,798,046       5,273,585
        Residential real estate       8,123,898       7,465,403
        Consumer ...............      4,604,984       4,767,349
                                   ------------    ------------
                                     42,337,732      36,942,232
        Net deferred loan fees .        (77,473)        (63,430)
                                   ------------    ------------
                                   $ 42,260,259    $ 36,878,802
                                   ============    ============
</TABLE>



     An analysis of the allowance for loan losses is as follows:

<TABLE>
<CAPTION>

                                         1996         1995
                                      ---------    ---------
        <S>                           <C>          <C>
        Balance, beginning of year    $ 427,662    $ 353,009
          Provision for loan losses      90,000       85,000
          Loans charged off .......     (89,659)     (16,180)
          Recoveries ..............      26,817        5,833
                                      ---------    ---------
        Balance, end of year ......   $ 454,820    $ 427,662
                                      =========    =========

</TABLE>


<PAGE>
                                       38


     Loans having recorded investments of approximately  $56,000 at December 31,
     1996 and approximately $32,000 at December 31, 1995 have been identified as
     impaired in  accordance  with the  provisions  of FASB No. 114. The average
     recorded  investment  in such loans during 1996 and 1995 was  approximately
     $56,700 and $33,000,  respectively.  The total  allowance for possible loan
     losses  related to these loans was $12,000 and $6,000 at December  31, 1996
     and 1995, respectively.

     The Company is a party to financial instruments with off-balance-sheet risk
     in the normal course of its lending  activities to meet the financing needs
     of its customers. These financial instruments include commitments to extend
     credit and standby letters of credit. The Company's exposure to credit loss
     in the  event  of  non-performance  by the  other  party  of the  financial
     instrument for  commitments to extend credit and standby  letters of credit
     is represented by contractual amount of those instruments. The Company uses
     the  same  credit  policies  in  making  these  commitments  as it does for
     on-balance-sheet   instruments   and  evaluates  each   customer's   credit
     worthiness on a case-by-case  basis.  At December 31, 1996, the Company had
     outstanding  loan  commitments  of  approximately  $5,693,000  and  standby
     letters  of credit of  approximately  $194,000.  The  amount of  collateral
     obtained,  if deemed necessary,  for these commitments by the Company, upon
     extension of credit,  is based on  management's  credit  evaluation  of the
     customer.  Collateral  held,  if any,  varies  but may  include  inventory,
     equipment,  real estate, or other property.  The Bank's loans are primarily
     concentrated in its market area of Bryan and Chatham counties of Georgia.


5.  PREMISES AND EQUIPMENT

     Premises and equipment is summarized as follows:

<TABLE>
<CAPTION>
                                                December 31,
                                        -----------------------
                                           1996         1995
                                        ----------   ----------
        <S>                             <C>          <C>
        Building ....................   $  992,156   $  973,766
        Furniture and equipment .....      401,452      304,835
        Automobiles .................       40,412       18,012
                                        ----------   ----------
                                         1,434,020    1,296,613
        Less accumulated depreciation      380,576      309,890
                                        ----------   ----------
                                         1,053,444      986,723
        Land ........................      403,549      102,054
                                        ----------   ----------
                                        $1,456,993   $1,088,777
                                        ==========   ==========
</TABLE>


<PAGE>
                                       39



6.  INTEREST-BEARING DEPOSITS


     Interest-bearing  deposits  and related  interest  cost for the years ended
     December 31, 1996 and 1995 are summarized as follows:

<TABLE>
<CAPTION>

                                              1996                       1995
                                   -------------------------   -------------------------
                                      Deposits      Interest      Deposits      Interest
                                    -----------   -----------   -----------   -----------
        <S>                         <C>           <C>           <C>           <C>
        NOW .....................   $ 9,335,919   $   347,055   $ 8,287,706   $   333,656
        Money market ............     1,787,254        64,286     1,174,751        53,199
        Savings .................     6,719,504       243,010     6,993,368       258,553
        Certificates of deposits,
           $100,000 or more .....     8,963,538       380,948     5,806,392       309,872
        Other time deposits .....    16,173,494       852,794    13,670,994       690,615
                                    -----------   -----------   -----------   -----------
                                    $42,979,709   $ 1,888,093   $35,933,211   $ 1,645,895
                                    ===========   ===========   ===========   ===========
</TABLE>


     At December 31, 1996,  scheduled  maturities of certificates of deposit are
     as follows:

<TABLE>
<CAPTION>

                    <S>    <C>
                    1997   $21,882,641
                    1998     1,885,431
                    1999       693,369
                    2000       500,808
                    2001       174,783
                           -----------
                           $25,137,032
                           ===========
</TABLE>



7.  FEDERAL HOME LOAN BANK ADVANCES


     The Bank has an agreement  for  short-term  advances  with the Federal Home
     Loan Bank of Atlanta.  These advances are secured under a blanket  floating
     lien agreement which provides a security interest in all unencumbered first
     mortgage  residential  loans and by stock in the  Federal  Home Loan  Bank.
     Interest on outstanding  advances is at variable rates and payable monthly.
     The average  rate paid on  short-term  advances  from the Federal Home Loan
     Bank in 1996 was 6.84%.  As of December  31,  1996,  Federal Home Loan Bank
     advances were  collateralized  by unencumbered  first mortgage  residential
     loans  totaling  approximately  $6,575,700  and  $156,200  of  stock in the
     Federal Home Loan Bank.


8.  OTHER BORROWED FUNDS


     Other  borrowed  funds  consist of Short-term  borrowings  from the Federal
     Reserve  Bank under the  Treasury  Tax and Loan  Investment  Program.  This
     program permits the Bank to borrow treasury tax and loan funds by executing
     an open-ended  interest-bearing  note to the Federal Reserve Bank. Interest
     is  payable  monthly  at one  fourth of one  percent  below  Federal  Funds
     interest rate. The note is secured by  mortgage-backed  obligations  with a
     carrying value of approximately $ 682,600 at December 31, 1996.


<PAGE>
                                       40


9.  INCOME TAXES



     The provision for income taxes is as follows:
<TABLE>
<CAPTION>

                                             Years Ended December 31,
                                             ------------------------
                                                   1996         1995
                                              ---------    ---------
        <S>                                   <C>          <C>
        Current ...........................   $ 510,000    $ 538,000
        Deferred ..........................      (2,000)     (82,000)
                                              ---------    ---------
                                              $ 508,000    $ 456,000
                                              =========    =========
</TABLE>


     The  provision  for income  taxes is less than  computed  by  applying  the
     statutory  federal  income tax rate of 34% to income before income taxes as
     indicated by the following:
<TABLE>
<CAPTION>
                                           Years Ended December 31,
                                           ------------------------
                                              1996         1995
                                           ---------    ---------
        <S>                                <C>          <C>
        Income tax at statutory rate ...   $ 520,000    $ 467,000
        Increase (decrease) in taxes:
          Tax-exempt interest ..........     (52,000)     (50,000)
          State income taxes, net
           of federal income tax benefit      38,000       41,000
          Other ........................       2,000       (2,000)
                                           ---------    ---------
        Provision for income taxes .....   $ 508,000    $ 456,000
                                           =========    =========

</TABLE>


     The components of net deferred tax assets are as follows:

<TABLE>
<CAPTION>
                                                 December 31,
                                            -------------------
                                              1996       1995
                                            --------   --------
        <S>                                 <C>        <C>
        Deferred tax assets:
          Allowance for loan losses .....   $171,000   $166,500
          Deferred loan fees ............     31,000     25,000
          Unrealized loss on investment
            securities available for sale     18,141      5,185
          Deferred compensation .........     32,000     37,500
          Other .........................      4,000
                                            --------   --------
            Total deferred tax assets ...    256,141    234,185
        Deferred tax liabilities:
          Accumulated depreciation ......     78,000     76,000
          Other .........................     10,000
                                            --------   --------
        Net deferred tax assets .........   $168,141   $158,185
                                            ========   ========
</TABLE>

<PAGE>
                                       41


10. REGULATORY REQUIREMENTS


     The approval of the Georgia  Department  of Banking and Finance is required
     if  dividends  declared  by the Bank to the Company in any year will exceed
     50% of the net income of the Bank for the  previous  calendar  year.  As of
     December  31,  1996,  the Bank  could  declare  approximately  $511,000  of
     dividends without prior approval.

     The Bank is subject to various regulatory capital requirements administered
     by  the  federal  banking   agencies.   Failure  to  meet  minimum  capital
     requirements  can  initiate  certain  mandatory  and  possible   additional
     discretionary  actions by  regulators  that,  if  undertaken,  could have a
     direct material effect on the Bank's  financial  statements.  Under capital
     adequacy  guidelines  and the  regulatory  framework for prompt  corrective
     action,  the Bank  must  meet  specific  capital  guidelines  that  involve
     quantitative  measures  of the  Bank's  assets,  liabilities,  and  certain
     off-balance   sheet  items  as  calculated  under   regulatory   accounting
     practices.  The Bank's  capital  amounts  and the  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 Bank to maintain  minimum  amounts and ratios (set forth in the
     table  below) of Tier 1 capital  (as defined in the  regulations)  to total
     average  assets (as defined) and minimum ratios of Tier 1 and total capital
     (as defined) to risk-weighted assets (as defined).  Management believes, as
     of December 31, 1996, that the Bank meets all capital adequacy requirements
     to which it is subject.

     As of  December  31,  1995,  the  most  recent  notification  from the FDIC
     categorized the Bank as well capitalized under the regulatory framework for
     prompt  corrective  action.  To be categorized as well capitalized the Bank
     must maintain  minimum  total  risk-based,  Tier I  risk-based,  and Tier I
     leverage  ratios as set forth in the  table.  There  are no  conditions  or
     events since that  notification  that management  believes have changed the
     institution's category.

<TABLE>
<CAPTION>

                                                                                                   To Be Well Capitalized
                                                                              For Capital         Under Prompt Corrective
                                                      Actual               Adequacy  Purposes        Action Provisions
                                                      Amount     Ratio     Amount       Ratio       Amount        Ratio
                                                    ------------------    -------------------     -----------------------
        December 31, 1996:
        <S>                                         <C>          <C>      <C>           <C>       <C>              <C>
        Total Capital  (to Risk Weighted Assets)
           Consolidated .........................   $7,252,536   15.53%   $3,735,650    8.00%     $4,669,562       10.00%
           Bank .................................   $6,917,375   14.81%   $3,735,849    8.00%     $4,669,812       10.00%
        Tier 1 Capital  (to Risk Weighted Assets)
           Consolidated .........................   $6,797,716   14.56%   $1,867,825    4.00%     $2,801,737        6.00%
           Bank .................................   $6,462,555   13.84%   $1,867,925    4.00%     $2,801,887        6.00%
        Tier 1 Capital (to Average Assets)
           Consolidated .........................   $6,797,716   12.44%   $2,186,093    4.00%     $2,732,616        5.00%
           Bank .................................   $6,462,555   11.87%   $2,177,771    4.00%     $2,722,214        5.00%
        December 31, 1995:
        Total Capital  (to Risk Weighted Assets)
           Consolidated .........................   $6,809,446   17.28%   $3,151,728    8.00%     $3,939,659       10.00%
           Bank .................................   $6,316,503   15.74%   $3,210,037    8.00%     $4,012,547       10.00%
        Tier 1 Capital  (to Risk Weighted Assets)
           Consolidated .........................   $6,381,784   16.20%   $1,575,864    4.00%     $2,363,796        6.00%
           Bank .................................   $5,888,841   14.68%   $1,605,019    4.00%     $2,407,528        6.00%
        Tier 1 Capital (to Average Assets)
           Consolidated .........................   $6,381,784   12.91%   $1,977,395    4.00%     $2,471,744        5.00%
           Bank .................................   $5,888,841   12.69%   $1,856,473    4.00%     $2,320,592        5.00%

</TABLE>

<PAGE>
                                       42



11. STOCK OPTIONS


     Under the terms of a stock  option  agreement  which  expired  December 31,
     1994,  certain officers of the Bank were granted options to purchase shares
     of the Company's common stock at a price of book value per share at date of
     grant.  All options are  exerciseable  upon grant and expire  beginning  in
     December  1997 through  December  2001. At December 31, 1996 and 1995 there
     were 25,000 options  outstanding  and  exerciseable  at prices ranging from
     $9.63 to $11.72 per share.


12. RELATED PARTY TRANSACTIONS


     In the ordinary course of business,  the Bank has direct and indirect loans
     outstanding  to  certain  directors,   executive  officers,  and  principal
     shareholders,  including their associates.  Such loans are made on the same
     terms as those  prevailing  at the time for  comparable  transactions  with
     unaffiliated customers.

     The following is a summary of the activity of loans to directors, executive
     officers, and principal shareholders:

<TABLE>
<CAPTION>
                                              December 31,
                                     --------------------------
                                         1996           1995
                                     -----------    -----------
        <S>                          <C>            <C>
        Balance, beginning of year   $ 2,209,000    $ 2,244,000
        Amounts advanced .........       641,500      1,446,000
        Repayments ...............    (1,048,000)    (1,481,000)
                                     -----------    -----------
        Balance, end of year .....   $ 1,802,500    $ 2,209,000
                                     ===========    ===========
</TABLE>




13. CREDIT ARRANGEMENTS


     At December 31, 1996, federal funds line of credit arrangements aggregating
     $3,000,000   were  available  to  the  Bank  from   corresponding   banking
     institutions.  There are no commitment fees and  compensation  balances are
     not required.  The Bank also has a Blanket Floating Lien Agreement with the
     Federal  Home Loan Bank of Atlanta.  Under this  agreement,  the Bank has a
     credit line up to seventy-five percent of the book value of its one-to-four
     family first mortgage loans. These credit arrangements principally serve as
     liquidity back-up for the Bank.


14. PROFIT SHARING PLAN


     Effective  January 1, 1996,  the Bank  amended its profit  sharing  plan to
     allow salary  deferrals  under Internal  Revenue code section  401(k).  All
     employees of the Bank can  participate  in the plan after they meet certain
     eligibility  requirements.  Employer  contributions  to the plan are at the
     discretion  of the Board of  Directors.  The Bank  contributed  $31,592 and
     $37,836 to the plan in 1996 and 1995, respectively.

<PAGE>
                                       43



15. OTHER NON-INTEREST EXPENSES


     The major components of other non-interest expenses are as follows:

<TABLE>
<CAPTION>
                                          December 31,
                                     -------------------
                                       1996       1995
                                     --------   --------
        <S>                          <C>        <C>
        Postage ..................   $ 52,185   $ 46,416
        Stationery and supplies ..     48,344     57,403
        FDIC insurance ...........      2,000     46,534
        Professional services ....     58,599     59,116
        Correspondent bank charges     83,346     43,703
        Director fees ............     46,000     43,650
        Other ....................    318,928    278,205
                                     --------   --------
             Total ...............   $609,402   $575,027
                                     ========   ========

</TABLE>


16. FAIR VALUES OF FINANCIAL INSTRUMENTS


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

     The  following  methods  and  assumptions  were  used  by  the  Company  in
     estimating fair values of financial instruments:

     Cash and Cash  Equivalents  - The carrying  amounts of cash and  short-term
     instruments approximate their fair value.

     Investments Securities - Available for sale and Held to maturity securities
     are based on quoted market prices.

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

     Deposit  liabilities - Fair values of certificates of deposit are estimated
     using a  discounted  cash flow  calculation  that  applies  interest  rates
     currently  being offered on  certificates  of similar terms and maturities.
     The  carrying  amounts  of  all  other  deposits,   due  to  their  nature,
     approximate their fair values.


<PAGE>
                                       44



     Short-term  borrowings - The carrying  amounts of advances from the Federal
     Home Loan Bank and  other  short-term  borrowings  approximate  their  fair
     values.

     Commitments to Extend Credit and Standby Letters of Credit - The fair value
     of commitments is estimated using the fees currently  charged to enter into
     similar  agreements,  taking  into  account  the  remaining  terms  of  the
     agreements and the present creditworthiness of the counterparties. The fair
     value of letters of credit is based on fees  currently  charged for similar
     agreements or on the estimated cost to terminate  them or otherwise  settle
     the obligations with the counterparties at the reporting date.


     The carrying  values and estimated  fair values of the Company's  financial
     instruments were as follows:

<TABLE>
<CAPTION>

                                               December 31, 1996          December 31, 1995
                                         -------------------------   -------------------------
                                           Carrying         Fair        Carrying       Fair
                                            Value          Value         Value         Value
                                         -----------   -----------   -----------   -----------
        Financial assets:
        <S>                              <C>           <C>           <C>           <C>
          Cash and due from banks ....   $ 2,296,408   $ 2,296,408   $ 2,406,895   $ 2,406,895
          Federal funds sold .........     5,530,000     5,530,000     2,471,000     2,471,000
          Investment securities:
             Available for sale ......     5,289,372     5,289,372     5,706,830     5,706,830
             Held to maturity ........     3,194,200     3,330,320     3,059,077     3,143,464
          Loans, net .................    41,805,439    41,870,811    36,451,140    36,367,958
          Accrued interest receivable        373,089       373,089       367,242       367,242

        Financial liabilities:
          Deposits ...................   $52,604,076   $52,734,792   $43,497,048   $43,615,883
          Federal Home Loan advances .       380,000       380,000     1,300,000     1,300,000
          Other borrowed funds .......        53,195        53,195        49,974        49,974

        Off-balance sheet liabilities:
          Commitments to extend credit   $ 5,693,000   $ 6,550,516   $ 5,226,929   $ 5,226,929
          Standby letters of credit ..       194,000       194,027       632,683       632,683
</TABLE>



17. SUPPLEMENTAL CASH FLOW INFORMATION


     Certain  supplemental  disclosure  of cash  flow  information  and  noncash
     investing and financing activities:

<TABLE>
<CAPTION>
                            Years Ended December 31,
                                                      --------------------------
                                                         1996           1995
                                                      -----------    -----------
        <S>                                           <C>            <C>
        Cash paid during the year for:
          Income taxes ............................   $   685,301    $   555,809
                                                      ===========    ===========
          Interest ................................   $ 1,908,358    $ 1,691,474
                                                      ===========    ===========

        Noncash investing and financing activities:
          Net unrealized gain (loss) on investment
            securities available for sale .........   $   (19,435)   $   283,658
                                                      ===========    ===========

</TABLE>


<PAGE>
                                       45



18. BRYAN BANCORP OF GEORGIA, INC.  (PARENT ONLY) FINANCIAL INFORMATION
-----------------------------------------------------------------------

     Bryan Bancorp of Georgia,  Inc.  condensed  balance  sheets and the related
     condensed statements of income and cash flows are as follows:

<TABLE>
<CAPTION>
        Condensed Balance Sheets
        --------------------------------------------------
                                                                   December 31,
                                                          --------------------------
                                                              1996           1995
                                                          -----------    -----------
        Assets
        <S>                                               <C>            <C>
          Cash ........................................   $    49,667    $   514,365
          Land ........................................       301,494
          Other Assets ................................        22,000         16,578
          Investment in subsidiary ....................     6,435,343      5,881,064
                                                          -----------    -----------
             Total Assets .............................   $ 6,808,504    $ 6,412,007
                                                          ===========    ===========
        Liabilities
          Deferred compensation payable ...............   $    38,000    $    38,000
                                                          -----------    -----------

        Shareholders' equity
          Common Stock ................................       521,758        521,758
          Additional paid-in capital ..................     4,869,485      4,869,485
           Retained Earnings ..........................     1,715,073      1,048,341
          Net unrealized loss on investment
            securities available for sale .............       (27,212)        (7,777)
                                                          -----------    -----------
                                                            7,079,104      6,431,807
          Tresury stock ...............................      (308,600)       (57,800)
                                                          -----------    -----------
             Total shareholders' equity ...............     6,770,504      6,374,007
                                                          -----------    -----------
             Total liabilities and shareholders' equity   $ 6,808,504    $ 6,412,007

                                                          ===========    ===========
</TABLE>

<TABLE>
<CAPTION>

        Condensed  Statements of Income
        --------------------------------------------------
                                                          Years Ended December 31,
                                                          ------------------------
                                                              1996           1995
                                                          ----------   ----------
        Income
        <S>                                               <C>          <C>
          Dividends from subsidiary ...................   $  458,000
          Interest income .............................        5,859   $   17,239
                                                          ----------   ----------
                                                             463,859       17,239
        Expenses ......................................       23,250       22,837
                                                          ----------   ----------
        Income (loss) before income tax benefit and
          equity  in undistributed income of subsidiary      440,609       (5,598)
        Income tax benefit ............................        7,000        2,000
                                                          ----------   ----------
        Income (loss) before equity in
          undistributed income of subsidiary ..........      447,609       (3,598)
        Equity in undistributed income of subsidiary ..      573,714      920,100
                                                          ----------   ----------
        Net income ....................................   $1,021,323   $  916,502
                                                          ==========   ==========
</TABLE>

<PAGE>
                                       46

<TABLE>
<CAPTION>

        Condensed Statements of Cash Flows
        --------------------------------------------------
                                                               Years Ended December 31,
                                                              --------------------------
                                                                 1996           1995
                                                              -----------    -----------
        Operating Activities
        <S>                                                   <C>            <C>
           Net income .....................................   $ 1,021,323    $   916,502
           Adjustments to reconcile net income
            to net cash provided by operating activities:
               Equity in undistributed income of subsidiary      (573,714)      (920,100)
               Net decrease (increase) in other assets ....        (5,422)        42,500
                                                              -----------    -----------
                  Net cash provided by operating activities       442,187         38,902
                                                              -----------    -----------

        Investing Activities
          Purchase of land ................................      (301,494)
                                                              -----------    -----------
                  Net cash (used) for investing activities       (301,494)
                                                              -----------    -----------

        Financing Activities
          Purchase of treasury stock ......................      (250,800)       (15,000)
          Proceeds from issuance of stock .................                       15,000
          Dividends paid ..................................      (354,591)      (310,294)
                                                              -----------    -----------
                  Net cash (used) for financing activities       (605,391)      (310,294)
                                                              -----------    -----------

        Decrease in cash ..................................      (464,698)      (271,392)
        Cash - beginning of year ..........................       514,365        785,757
                                                              -----------    -----------
        Cash - end of year ................................   $    49,667    $   514,365
                                                              ===========    ===========
</TABLE>


<PAGE>
                                       47



                                   SIGNATURES

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

                               BRYAN BANCORP OF GEORGIA, INC.


Date: March 26, 1997           By:/s/ E. James Burnsed
      --------------              ---------------------------------------------
                                  E. James Burnsed
                                  President and Chief Executive Officer
                                  (principal executive, financial and accounting
                                  officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has  been signed below  by the following  persons on behalf of the Registrant in
the capacities and on the dates indicated.

SIGNATURES                            TITLE                        DATE
----------                            -----                        ----


/s/ E. James Bunsed         President, Chief Executive         March 26, 1997
E. James Burnsed              Officer and Director



/s/ J. Carl Cox, Jr.                Director                   March 26, 1997
J. Carl Cox, Jr.



/s/ L. Carlton Gill                 Director                   March 26, 1997
L. Carlton Gill



/s/ Thomas A. Lancaster             Director                   March 26, 1997
Thomas A. Lancaster



/s/ Juanita B. Phillips             Director                   March 26, 1997
Juanita B. Phillips



/s/ James T. Roberts, Sr.           Director                   March 26,1997
James T. Roberts, Sr.


                       (SIGNATURES CONTINUED ON NEXT PAGE)

<PAGE>
                                       48






SIGNATURES                            TITLE                        DATE
----------                            -----                        ----


/s/ James W. Royal            Secretary and Director           March 26, 1997
James W. Royal



/s/ Jimmy F. Sommers                Director                   March 26, 1997
Jimmy F. Sommers



/s/ Charles L. Stafford       Chairman of the Board            March 26, 1997
Charles L. Stafford



/s/ Robert T. Thompson              Director                   March 26, 1997
Robert T. Thompson





SUPPLEMENTAL  INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION 12 OF THE ACT.

No annual  report or proxy has been sent to  security  holders as of the date of
filing this report.  An annual report and proxy  materials  will be furnished to
security  holders  subsequent to the filing if this report,  and the  Registrant
shall furnish  copies of such material to the  Commission  when they are sent to
security holders.