SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark  One)

 X     Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act
---
       of  1934
       For the quarterly period ended June 30, 2003.
                                      ---------------

                                       or

     Transition  Report  under Section 13 or 15(d) of the Securities Exchange
---
     Act  of  1934
     For the transition period from  _______________  to  ________________.

                          Commission File No. 0-23980
                                              -------

                       Georgia Bank Financial Corporation
                      -------------------------------------
             (Exact name of registrant as specified in its charter)

            Georgia                                      58-2005097
            -------                                      ----------
     (State of Incorporation)               (I.R.S. Employer Identification No.)

                    3530 Wheeler Road, Augusta, Georgia 30909
                 ----------------------------------------------
                    (Address of principal executive offices)

                                 (706) 738-6990
                                ---------------
                (Issuer's telephone number, including area code)

                                 Not Applicable
                                ---------------
   (Former name, former address and former fiscal year, if changed since last
                                    report)

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

     Indicate  by  check  whether  the  registrant  is  an accelerated filer (as
defined  in  Rule  12b-2  of  the  Exchange  Act).   Yes        No  X
                                                        -----     -----

                      APPLICABLE ONLY TO CORPORATE ISSUERS

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

     2,385,280 shares of common stock, $3.00 par value per share, outstanding as
of  June  30,  2003.


<PAGE>
                       GEORGIA BANK FINANCIAL CORPORATION
                                    FORM 10-Q
                                      INDEX

                                                                            Page

Part  I        Financial  Information

       Item 1. Financial Statements (Unaudited)

               Consolidated Balance Sheets as of June 30, 2003 and
                 December 31, 2002                                             3

               Consolidated Statements of Income for the three and six months
                 ended June 30, 2003 and June 30, 2002                         4

               Consolidated Statements of Cash Flows for the
                 six months ended June 30, 2003 and June 30, 2002              6

               Notes to Consolidated Financial Statements                      8

       Item 2. Management's Discussion and Analysis of                        12
                 Financial  Condition  and  Results  of  Operations

       Item 3. Quantitative and Qualitative Disclosures about Market Risk     22

       Item 4. Controls  and  Procedures                                      22


Part  II       Other  Information

       Item 1. Legal Proceedings                                               *

       Item 2. Changes in Securities                                           *

       Item 3. Defaults Upon Senior Securities                                 *

       Item 4. Submission of Matters to a Vote of Security-Holders            23

       Item 5. Other Information                                               *

       Item 6. Exhibits and Reports on Form 8-K                               24

Signature                                                                     25

*  No  information  submitted  under  this  caption


                                        1
<PAGE>


                                     PART I
                              FINANCIAL INFORMATION


                                        2
<PAGE>
<TABLE>
<CAPTION>
                GEORGIA BANK FINANCIAL CORPORATION AND SUBSIDIARY
                          Consolidated Balance Sheets


                     ASSETS                          June 30,
                                                       2003        December 31,
                                                    (Unaudited)        2002
                                                   -------------  -------------
<S>                                                <C>            <C>
Cash and due from banks                            $ 19,905,985   $ 12,942,512
Federal funds sold                                   13,890,000      3,691,000
Interest bearing deposits in other banks                517,266        517,179
                                                   -------------  -------------
    Cash and cash equivalents                        34,313,251     17,150,691

Investment securities
   Available-for-sale                               128,147,695    133,971,802
   Held-to-maturity, at cost (fair values of
       $6,100,156 and $6,385,650, respectively)       5,637,143      6,138,889

Loans held for sale                                  30,684,630     24,296,598
Loans                                               390,415,229    372,402,679
   Less allowance for loan losses                    (7,075,304)    (6,534,417)
                                                   -------------  -------------
    Loans, net                                      383,339,925    365,868,262

Premises and equipment, net                          13,637,641     13,882,987
Accrued interest receivable                           3,704,002      3,688,630
Intangible assets, net                                  139,883        139,883
Other assets                                          7,394,211      4,694,668
                                                   -------------  -------------

                                                   $606,998,381   $569,832,410
                                                   =============  =============

            LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits
     Noninterest-bearing                           $ 78,905,716   $ 70,334,882
     Interest-bearing
        NOW accounts                                 61,007,512     63,115,877
        Savings                                     181,370,483    152,244,387
        Money management accounts                    24,901,136     28,687,166
        Time deposits over $100,000                  93,817,256     87,746,760
        Other time deposits                          36,134,701     37,427,629
                                                    -------------  -------------
                                                    476,136,804    439,556,701

Securities sold under repurchase agreements          38,988,602     42,987,681
Advances from Federal Home Loan Bank                 35,000,000     35,000,000
Other borrowed funds                                  1,000,000      1,000,000
Accrued interest and other liabilities                4,627,314      4,539,968
                                                   -------------  -------------
          Total liabilities                         555,752,720    523,084,350
                                                   -------------  -------------

Stockholders' equity
  Common Stock, $3.00 par value; 10,000,000
     shares authorized; 2,642,579 shares issued;
     2,623,808 shares outstanding                     7,927,737      7,927,737
  Additional paid-in capital                         42,274,797     29,871,341
  Retained earnings                                  11,300,595      7,471,434
  Stock dividend declared                           (12,403,456)             -
  Treasury stock, at cost 18,771 shares                (507,360)      (507,360)
  Accumulated other comprehensive income              2,653,348      1,984,908
                                                   -------------  -------------
          Total stockholders' equity                 51,245,661     46,748,060
                                                   -------------  -------------

                                                   $606,998,381   $569,832,410
                                                   =============  =============
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>
                          GEORGIA BANK FINANCIAL CORPORATION AND SUBSIDIARY
                                  Consolidated Statements of Income
                                              (Unaudited)


                                                   Three Months Ended        Six Months Ended
                                                        June 30,                  June 30,
                                                ------------------------  ------------------------
                                                   2003         2002         2003         2002
                                                -----------  -----------  -----------  -----------
<S>                                             <C>          <C>          <C>          <C>
Interest income:
   Loans, including fees                        $6,487,762   $ 5,950,058  $12,745,210  $11,822,596
   Investment securities                         1,560,293     1,746,683    3,181,665    3,370,160
   Federal funds sold                               26,764        30,822       59,870       66,140
   Interest-bearing deposits in other banks          2,304         3,790        3,580        9,457
                                                -----------  -----------  -----------  -----------
          Total interest income                  8,077,123     7,731,353   15,990,325   15,268,353
                                                -----------  -----------  -----------  -----------

Interest expense:
   Deposits                                      1,939,858     2,130,049    3,920,017    4,368,544
   Federal funds purchased and securities sold
      under repurchase agreements                  164,927       159,597      332,499      302,564
   Other borrowings                                447,920       492,408      891,006      980,183
                                                -----------  -----------  -----------  -----------
          Total interest expense                 2,552,705     2,782,054    5,143,522    5,651,291
                                                -----------  -----------  -----------  -----------

          Net interest income                    5,524,418     4,949,299   10,846,803    9,617,062

Provision for loan losses                          431,805       414,828      906,555    1,084,818
                                                -----------  -----------  -----------  -----------

          Net interest income after provision
             for loan losses                     5,092,613     4,534,471    9,940,248    8,532,244
                                                -----------  -----------  -----------  -----------

Noninterest income:
   Service charges and fees on deposits          1,139,770     1,125,479    2,222,419    2,155,654
   Gain on sale of loans                         2,531,502     1,239,165    4,319,232    2,374,884
   Investment securities (losses) gains, net       (17,420)        2,827       28,772       52,566
   Retail investment income                         82,452        82,850      173,389      139,430
   Trust service fees                               79,776        54,557      149,635       97,205
   Miscellaneous income                             93,992        96,316      191,304      194,391
                                                -----------  -----------  -----------  -----------
          Total noninterest income               3,910,072     2,601,194    7,084,751    5,014,430
                                                -----------  -----------  -----------  -----------

Noninterest expense:
   Salaries                                      3,236,655     2,441,083    5,992,428    4,764,454
   Employee benefits                               643,507       556,792    1,237,010    1,065,378
   Occupancy expenses                              596,657       574,892    1,178,003    1,141,633
   Other operating expenses                      1,472,096     1,319,570    2,743,559    2,465,161
                                                -----------  -----------  -----------  -----------
          Total noninterest expense              5,948,915     4,892,337   11,151,000    9,436,626
                                                -----------  -----------  -----------  -----------

          Income before income taxes             3,053,770     2,243,328    5,873,999    4,110,048

Income tax expense                               1,076,796       786,000    2,044,838    1,392,000
                                                -----------  -----------  -----------  -----------

          Net income                            $1,976,974   $ 1,457,328  $ 3,829,161  $ 2,718,048
                                                ===========  ===========  ===========  ===========
</TABLE>

                                        4
<PAGE>
<TABLE>
<CAPTION>
                GEORGIA BANK FINANCIAL CORPORATION AND SUBSIDIARY
                        Consolidated Statements of Income
                                  (Unaudited)


                                              Three Months Ended      Six Months Ended
                                                   June 30,                June 30,
                                            ----------------------  ----------------------
                                               2003        2002        2003        2002
                                            ----------  ----------  ----------  ----------
<S>                                         <C>         <C>         <C>         <C>
Basic net income per share                  $     0.75  $     0.56  $     1.46  $     1.04
                                            ==========  ==========  ==========  ==========

Diluted net income per share                $     0.74  $     0.55  $     1.44  $     1.03
                                            ==========  ==========  ==========  ==========

Weighted average common shares outstanding   2,623,808   2,623,808   2,623,808   2,623,808
                                            ==========  ==========  ==========  ==========

Weighted average number of common and
 common equivalent shares outstanding        2,653,816   2,640,371   2,652,094   2,638,878
                                            ==========  ==========  ==========  ==========
</TABLE>


                                        5
<PAGE>
<TABLE>
<CAPTION>
                         GEORGIA BANK FINANCIAL CORPORATION AND SUBSIDIARY
                                Consolidated Statements of Cash Flows
                                            (Unaudited)


                                                                    Six Months Ended June 30,
                                                                 -------------------------------
                                                                      2003            2002
                                                                 --------------  ---------------
<S>                                                              <C>             <C>
Cash flows from operating activities:
Net income                                                       $   3,829,161   $    2,718,048
  Adjustments to reconcile net income to net cash
  (used in) provided by operating activities
  Depreciation and amortization                                        647,613          677,576
  Provision for loan losses                                            906,555        1,084,818
  Net investment securities gains                                      (28,772)         (52,866)
  Net amortization of premium on investment
    securities                                                         403,743          161,884
  Loss on disposal of premises and equipment                               768           23,319
  Gain on the sale of other real estate                                      -           (5,923)
  Gain on sale of loans                                             (4,319,232)      (2,374,884)
  Real estate loans originated for sale                           (192,127,990)     (99,597,175)
  Proceeds from sales of real estate loans                         190,059,190      108,487,222
  Increase in accrued interest receivable                              (15,372)        (177,605)
  Decrease in other assets                                              72,902            5,025
  Increase (decrease) in accrued interest and other liabilities         87,346         (146,242)
                                                                 --------------  ---------------
    Net cash (used in) provided by operating activities               (484,088)      10,803,197
                                                                 --------------  ---------------

Cash flows from investing activities:
  Proceeds from sales of available for sale securities              23,937,827        9,428,761
  Proceeds from maturities of available for sale securities         36,996,656       17,525,829
  Proceeds from maturities of held to maturity securities              500,000          850,000
  Purchase of available for sale securities                        (54,470,813)     (43,030,437)
  Net increase in loans                                            (18,495,011)     (21,321,722)
  Purchase of Company-owned life insurance                          (3,000,000)               -
  Purchases of premises and equipment                                 (413,022)        (866,646)
  Proceeds from sale of other real estate                                    -           71,902
  Proceeds from sale of premises and equipment                           9,987           30,515
                                                                 --------------  ---------------
    Net cash used in investing activities                          (14,934,376)     (37,311,798)
                                                                 --------------  ---------------

Cash flows from financing activities:
  Net increase in deposits                                          36,580,103       31,480,953
  Net (decrease) increase in federal funds purchased and
    securities sold under repurchase agreements                     (3,999,079)      15,623,326
                                                                 --------------  ---------------
    Net cash provided by financing activities                       32,581,024       47,104,279
                                                                 --------------  ---------------
</TABLE>


                                        6
<PAGE>
<TABLE>
<CAPTION>

                GEORGIA BANK FINANCIAL CORPORATION AND SUBSIDIARY
                      Consolidated Statements of Cash Flows
                                  (Unaudited)


                                                                Six Months Ended June 30,
                                                              ------------------------------
                                                                   2003           2002
                                                              --------------  --------------
<S>                                                           <C>             <C>
    Net increase in cash and cash equivalents                     17,162,560     20,595,678

Cash and cash equivalents at beginning of period                  17,150,691     15,509,900

                                                              --------------  --------------
Cash and cash equivalents at end of period                    $   34,313,251  $  36,105,578
                                                              ==============  =============

Supplemental disclosures of cash paid during the period for:
          Interest                                            $    5,139,755  $   5,917,986
                                                              ==============  =============
          Income taxes                                        $    2,128,000  $   1,980,000
                                                              ==============  =============

Supplemental disclosures on noncash investing activities:
          Loans transferred to other real estate              $      116,793  $      65,979
                                                              ==============  =============
</TABLE>

See  accompanying  notes  to  consolidated  financial  statements.


                                        7
<PAGE>
                GEORGIA BANK FINANCIAL CORPORATION AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                                  June 30, 2003

Note  1  -  Basis  of  Presentation

The  accompanying  consolidated  financial  statements  include  the accounts of
Georgia Bank Financial Corporation and its wholly-owned subsidiary, Georgia Bank
&  Trust  Company  (the  "Company"  or  the  "Bank").  Significant  intercompany
transactions  and  accounts  are  eliminated  in  consolidation.

The  financial  statements  for the three and six months ended June 30, 2003 and
2002  are unaudited and have been prepared pursuant to the rules and regulations
of  the  Securities  and  Exchange Commission.  Certain information and footnote
disclosures  normally  included  in  financial statements prepared in accordance
with  accounting  principles  generally accepted in the United States of America
have  been  condensed  or  omitted pursuant to such rules and regulations. These
consolidated financial statements should be read in conjunction with the audited
consolidated financial statements and footnotes included in the Company's annual
report  on  Form  10-K  for  the  year  ended  December  31,  2002.

In  the  opinion  of management, all adjustments necessary to present fairly the
financial  position and the results of operations and cash flows for the interim
periods  have  been made. All such adjustments are of a normal recurring nature.
The  results  of operations for the three and six months ended June 30, 2003 are
not  necessarily  indicative  of the results of operations which the Company may
achieve  for  the  entire  year.

Note  2  -  Recent  Accounting  Pronouncements

In  April 2002, the Financial Accounting Standards Board (FASB) issued Statement
of  Financial Accounting Standards (SFAS) No. 145, Rescission of FASB Statements
No.  4,  44,  and  64,  Amendment  of  FASB  Statement  No.  13,  and  Technical
Corrections. SFAS No. 145 updates, clarifies, and simplifies existing accounting
pronouncements.  SFAS  No.  145  requires that in certain circumstances previous
items  classified  as  extraordinary that do not meet the criteria in Accounting
Principals  Board  (APB)  Opinion  30  must  be  reclassified.  SFAS  No. 145 is
effective  for  fiscal  years beginning after May 15, 2002. The adoption of SFAS
No.  145  did not have a material effect on the Company's financial condition or
results  of  operations.

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit  or  Disposal  Activities.  SFAS No. 146 addresses financial accounting and
reporting  for  costs  associated with exit or disposal activities. SFAS No. 146
requires  recognition  of  a  liability  for  a  cost associated with an exit or
disposal  activity when the liability is incurred, as opposed to when the entity
commits  to  an  exit  plan. SFAS No. 146 is effective prospectively for exit or


                                        8
<PAGE>
disposal  activities initiated after December 31, 2002. The adoption of SFAS No.
146  did  not  have  a  material  impact on the Company's financial condition or
results  of  operations.

In October 2002, the FASB issued SFAS No. 147, Acquisitions of Certain Financial
Institutions.  SFAS  No. 147 removes acquisitions of financial institutions from
the scope of both SFAS No. 72, Accounting for Certain Acquisitions of Banking or
Thrift Institutions, and FASB Interpretation No. 9, Applying APB Opinions No. 16
and 17, When a Savings and Loan Association or a Similar Institution is Acquired
in a Business Combination Accounted for by the Purchase Method and requires that
those  transactions  be  accounted for in accordance with SFAS No. 141, Business
Combinations,  and  SFAS  No.  142,  Goodwill  and  Other  Intangible Assets. In
addition,  SFAS  No.  147  amends SFAS No. 144, Accounting for the Impairment or
Disposal  of  Long-Lived  Assets,  to  include  in  its  scope  long-term
customer-relationship  intangible  assets  of  financial  institutions  such  as
depositor-  and  borrower-relationship  intangible  assets and credit cardholder
intangible  assets.  SFAS  No.  147's  transition  provisions  require  affected
institutions  to  reclassify their SFAS No. 72 goodwill as SFAS No. 142 goodwill
as  of  the date the Company initially applied SFAS No. 142 in its entirety. The
adoption  of  SFAS  No.  147  did not have any impact on the Company's financial
condition  or  results  of  operations.

In  November 2002, the FASB issued Interpretation No. 45, Guarantor's Accounting
and  Disclosure  Requirements  for  Guarantees, Including Indirect Guarantees of
Indebtedness  of  Others (FIN 45). FIN 45 requires that the guarantor recognize,
at  the  inception  of certain guarantees, a liability for the fair value of the
obligation undertaken in issuing such guarantee. FIN 45 also requires additional
disclosure  about  the  guarantor's obligations under certain guarantees that it
has  issued.  The  initial  recognition  and  measurement  provisions  of  this
interpretation  are  applicable  on  a prospective basis to guarantees issued or
modified  after  December 31, 2002 and the disclosure requirements are effective
after  December  15, 2002. The adoption of FIN 45 did not have a material impact
on  the  Company's  financial  condition  or  results  of  operations.

In  January  2003,  the  FASB  issued  Interpretation  No.  46, Consolidation of
Variable  Interest  Entities  and  Interpretation of ARB No. 51 (FIN 46). FIN 46
establishes the criteria for consolidating variable interest entities. FIN 46 is
effective  for fiscal years or interim periods beginning after June 15, 2003, to
variable  entities  that  were acquired before February 1, 2003. The adoption of
FIN  46  did  not have a material impact on the Company's financial condition or
results  of  operations.

In  April  2003,  the  FASB  issued  SFAS No. 149, Amendment of Statement 133 on
Derivative  Instruments  and  Hedging  Activities.  SFAS  No.  149  amends  and
clarifies  financial  accounting  and  reporting  for  derivative  instruments,
including  certain  derivative  instruments  embedded  in  other  contracts
(collectively  referred to as derivatives) and for hedging activities under SFAS
No.  133. SFAS No. 149 is effective for contracts entered into or modified after
June  30,  2003.  The  Company  does  not  expect  that SFAS No. 149 will have a
significant  effect  on  its  consolidated  financial  statements.

In  May  2003,  the  FASB  issued SFAS No. 150, Accounting for Certain Financial
Instruments  with  Characteristics of both Liabilities and Equity.  SFAS No. 150
establishes  standards  for  how  an  issuer  classifies  and  measures  certain


                                        9
<PAGE>
financial  instruments  with characteristics of both liabilities and equity, and
imposes  certain  additional disclosure requirements. The provisions of SFAS No.
150  are  generally  effective  for  all  financial  instruments entered into or
modified  after May 31, 2003, and otherwise is effective at the beginning of the
first  interim period beginning after June 15, 2003. The Company does not expect
that  this standard will have a significant effect on its consolidated financial
statements.

Note  3  -  Comprehensive  Income

Other  comprehensive income for the Company consists of net unrealized gains and
losses  on  investment securities available for sale. Total comprehensive income
for  the  three months ended June 30, 2003 was $2,227,600 compared to $2,372,607
for  the  three  months ended June 30, 2002.  Total comprehensive income for the
six months ended June 30, 2003 was $4,497,601 compared to $3,060,358 for the six
months  ended  June  30,  2002.

Note  4  -  Stock-based  Compensation

In  December  2002,  the  FASB  issued  SFAS No. 148, Accounting for Stock-Based
Compensation  -  Transition  and Disclosure - an amendment of FASB Statement No.
123.  SFAS No. 148 amends SFAS No. 123, Accounting for Stock-Based Compensation,
to  provide  alternative  methods  of  transition for an entity that voluntarily
changes  to  the  fair value based method of accounting for stock-based employee
compensation.  It  also  amends  the  disclosure  provisions  of SFAS No. 123 to
require  prominent  disclosure  about  the  effects on reported net income of an
entity's  accounting  policy  decisions  with  respect  to  stock-based employee
compensation.  Finally,  SFAS  No.  148  also amends APB Opinion No. 28, Interim
Financial  Reporting,  to  require disclosure about those effects in the interim
financial  information.  The  Company  adopted  the  provisions  of SFAS No. 148
effective  December  31,  2002.

The  Company  applies  APB  Opinion  No.  25,  Accounting  for  Stock  Issued to
Employees, and related interpretations in accounting for its stock option plans.
Accordingly  compensation  cost is measured as the excess, if any, of the quoted
market  price  of  the  Company's  stock at the date of grant over the amount an
employee  must  pay to acquire the stock.  Had compensation cost been determined
based  upon the fair value of the options at the grant dates consistent with the
method  recommended  by  SFAS  No.  123, on a pro forma basis, the Company's net
income and income per share for the three and six months ended June 30, 2003 and
2002  is  indicated  below.


                                       10
<PAGE>
<TABLE>
<CAPTION>
                                       Three Months Ended       Six Months Ended
                                            June 30,                June 30,
                                     ----------------------  ----------------------
                                        2003        2002        2003        2002
                                     ----------  ----------  ----------  ----------
<S>                                  <C>         <C>         <C>         <C>

Net income                           $1,976,974  $1,457,328  $3,829,161  $2,718,048
Deduct: Total stock-based
    Compensation expense determined
    under fair value based method,
    net of related tax effect            36,534      24,692      69,729      44,332
                                     ----------  ----------  ----------  ----------
Pro Forma                            $1,940,440  $1,432,636  $3,759,432  $2,673,716
                                     ==========  ==========  ==========  ==========
Basic net income per share:
    As reported                      $     0.75  $     0.56  $     1.46  $     1.04
    Pro forma                        $     0.74  $     0.55  $     1.43  $     1.02

Diluted net income per share:
    As reported                      $     0.74  $     0.55  $     1.44  $     1.03
    Pro forma                        $     0.73  $     0.54  $     1.42  $     1.01
</TABLE>

Note  5  -  Stock  Dividend  Declared

On  July  16,  2003,  the board of directors of the Company declared a 10% stock
dividend for shareholders of record on August 8, 2003 which is payable on August
29,  2003. Stockholders' equity, including shares, at June 30, 2003 and December
31, 2002, has been retroactively restated to reflect the stock dividend. All per
share  amounts  and  weighted  average  shares outstanding have been restated to
reflect  the  stock  dividend.


                                       11
<PAGE>
Item  2.  Management's  Discussion  and  Analysis  of  Financial  Condition  and
          Results  of  Operations

Forward-Looking  Statements
---------------------------

Georgia  Bank Financial Corporation (the "Company") may, from time-to-time, make
written  or  oral  forward-looking statements, including statements contained in
the  Company's  filings  with  the  Securities  and  Exchange  Commission  (the
"Commission")  and  its  reports  to  shareholders.  Statements  made  in  such
documents,  other  than  those  concerning  historical  information,  should  be
considered forward-looking and subject to various risks and uncertainties.  Such
forward-looking  statements  are  made based upon management's belief as well as
assumptions made by, and information currently available to, management pursuant
to  "safe  harbor" provisions of the Private Securities Litigation Reform Act of
1995.  The  Company's  actual  results  may  differ  materially from the results
anticipated in forward-looking statements due to a variety of factors, including
governmental  monetary  and  fiscal  policies, deposit levels, loan demand, loan
collateral  values,  securities  portfolio  values,  and  interest  rate  risk
management;  the  effects  of  competition  in  the  banking business from other
commercial  banks,  savings  and  loan  associations,  mortgage  banking  firms,
consumer finance companies, credit unions, securities brokerage firms, insurance
companies,  money market mutual funds and other financial institutions operating
in  the  Company's  market  area and elsewhere, including institutions operating
through the Internet; changes in governmental regulation relating to the banking
industry,  including regulations relating to branching and acquisitions; failure
of  assumptions  underlying  the  establishment  of  reserves  for  loan losses,
including  the  value  of  collateral  underlying  delinquent  loans,  and other
factors.  The Company cautions that such factors are not exclusive.  The Company
does not undertake to update any forward-looking statement that may be made from
time  to  time  by,  or  on  behalf  of,  the  Company.

Critical  Accounting  Policies
------------------------------

The  accounting  and  financial  reporting  policies  of  Georgia Bank Financial
Corporation  and  subsidiary conform to accounting principles generally accepted
in  the  United States of America accounting principles and to general practices
within  the  banking industry.  Of these policies, management has identified the
allowance  for  loan  losses  as  a  critical  accounting  policy  that requires
difficult  subjective  judgment  and  is  important  to  the presentation of the
financial  condition  and  results  of  operations  of  the  Company.

The allowance for loan losses is established through a provision for loan losses
charged to expense. Loans are charged against the allowance for loan losses when
management  believes  that  the  collectibility  of  the  principal is unlikely.
Subsequent  recoveries  are  added  to the allowance. The allowance is an amount
that  management  believes  will  be adequate to absorb losses on existing loans
that  become uncollectible, based on evaluations of the collectibility of loans.
The  evaluations  take  into consideration such factors as changes in the nature
and  volume  of  the  loan  portfolio,  historical loss rates, overall portfolio
quality,  review  of specific problem loans, and current economic conditions and
trends  that  may  affect  a  borrower's  ability  to  repay.


                                       12
<PAGE>
The Company segments its allowance for loan losses into the following five major
categories:  1)  identified  losses  for impaired loans; 2) general reserves for
Classified/Watch loans; 3) general reserves for loans with satisfactory ratings;
4)  general  reserves based on economic and market risk qualitative factors, and
5)  an  unallocated  amount.  Risk  ratings are initially assigned in accordance
with  the  Bank's  loan  and  collection policy. An organizationally independent
department  reviews  grade  assignments on an ongoing basis.  Management reviews
current  information  and  events regarding a borrowers' financial condition and
strengths,  cash  flows  available  for  debt  repayment, the related collateral
supporting  the  loan and the effects of known and expected economic conditions.
When  the  evaluation  reflects  a  greater than normal risk associated with the
individual  loan,  management  classifies  the loan accordingly.  If the loan is
determined  to  be impaired, management determines the allowance for loan losses
for  that  loan  based upon the present value of future cash flows discounted at
the  loan's  effective  interest rate or the fair value of the collateral as the
measure for the amount of the impairment.  Impairment losses are included in the
allowance for loan losses through a charge to the provision for losses on loans.
Subsequent recoveries are added to the allowance for loan losses.  Cash receipts
for  accruing  loans are applied to principal and interest under the contractual
terms  of  the  loan  agreement.  Cash  receipts on impaired loans for which the
accrual  of  interest  has  been discontinued are applied first to principal and
then  to  interest income.  Impaired and Classified/Watch loans are aggressively
monitored.  The  allowance  for  loans  rated satisfactory is further subdivided
into  various  types  of loans as defined by call report codes.  The Company has
developed  specific qualitative factors to apply to each individual component of
the  allowance.  These  qualitative  factors are based upon economic, market and
industry conditions that are specific to the Company's local two county markets.
These  qualitative  factors  include, but are not limited to, national and local
economic  conditions,  bankruptcy  trends,  unemployment  trends,  loan
concentrations,  dependency  upon  government  installations and facilities, and
competitive  factors in the local market.  These allocations for the qualitative
factors  are  included in the various individual components of the allowance for
loan  losses.  The  qualitative  factors  are  subjective  in nature and require
considerable  judgment  on  the part of management.  However, it is management's
opinion  that  these  factors  represent  uncertainties  in  the Bank's business
environment  that  must  be factored into management's analysis of the allowance
for  loan losses.  Management is committed to developing more historical data in
the  future  to  reduce  the  dependence  on  these  qualitative  factors.  The
unallocated  component  of  the  allowance  is  established  for  losses  that
specifically  exist  in  the  remainder  of  the  portfolio,  but have yet to be
identified.

Management  believes  that  the allowance for loan losses is adequate. While the
Company  has  74.25%  of  its  loan portfolio secured by real estate loans, this
percentage  is not significantly higher than in previous years.  Commercial real
estate  comprises  29.36 % of the loan portfolio and consists primarily of owner
occupied  properties  where  the operations of the commercial entity provide the
necessary cash flow to service the debt.  For this portion of real estate loans,
repayment  is  not  dependent upon liquidation of the real estate.  Construction
and  development (18.46%) has been an increasingly important portion of the real
estate  loan  portfolio.  The  Company  carefully  monitors  the  loans  in this
category  since  the  repayment  of  these loans is generally dependent upon the
liquidation  of  the  real estate and is impacted by national and local economic
conditions.  The  residential  category  represents those loans that the Company


                                       13
<PAGE>
chooses  to  maintain  in  its  portfolio rather than selling into the secondary
market  for  marketing  and  competitive reasons.  The residential held for sale
category  comprises  loans  that  are  in  the  process  of  being sold into the
secondary market.  The credit has been approved by the investor and the interest
rate locked so the Company takes no credit or interest rate risk with respect to
these  loans.  The  Company  has  no  large  loan  concentrations  to individual
borrowers  or  industries.  Only  12.57%  of the Company's portfolio consists of
consumer  loans.  Unsecured  loans  at  June  30,  2003  were  $8.8  million.

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

Performance  Overview  -  Net  Income
-------------------------------------

The  Company's  net  income for the second quarter of 2003 was $1,977,000, which
was  an  increase  of $520,000 (35.66%) compared to net income of $1,457,000 for
the  second quarter of 2002. Basic net income per share was $0.75 for the second
quarter  of 2003 compared to $0.56 for the second quarter of 2002.  Earnings per
share  for  both  periods  have  been adjusted to reflect the 10% stock dividend
declared  which  is discussed in Item 1, Note 5 above.  Net income for the first
six  months  of  2003 was $3,829,000, an increase of $1,111,000 (40.9%) compared
with net income of $2,718,000 for the first six months of 2002.  The increase in
net income for both the three and six months ended June 30, 2003 was primarily a
result  of  an increase in gain on sales of loans in the secondary market due to
increased home purchases and refinancing activity, as well as an increase in net
interest  income.  The  Bank  experienced  an increase in interest income due to
increased  loan  volume  which  was  somewhat offset by a decrease in investment
interest income, due to lower interest rates.  Interest expense decreased due to
the  lower  deposit  interest  rates for the three and six months ended June 30,
2003.  The income growth discussed above for the three and six months ended June
30,  2003,  was  partially offset by increases in salaries and employee benefits
expenses  due  to  higher  commissions  related to the secondary mortgage market
volume, and increased personnel to support growth. For the six months ended June
30,  2003  as  compared  with  the  six  months ended June 30, 2002, there was a
$178,000  decrease  in the provision for loan losses. In March 2003, the Company
began  segmenting  its  loan  losses  into  five major categories.  See Critical
Accounting  Policies  above.  This  resulted  in  an  increase  in  the  general
allowance  based  on  economic  and  market  risk  qualitative  factors  and was
partially  offset  by  a  decrease  in the unallocated portion of the allowance.
Increases  in  other operating expenses is due to increases in various areas due
to  growth,  with  the  largest  increases  noted  in  marketing and loan costs,
primarily  related  to  the  sale  of  mortgage  loans  in the secondary market.

Total  assets  increased  $37.2  million (6.5%) from December 31, 2002 and $75.4
million (14.2%) from June 30, 2002.  For the six months ended June 30, 2003, the
$37.2  million  of growth was primarily attributable to growth in loans of $24.4
million,  cash  and  due from banks of $7.0 million, federal funds sold of $10.2
million,  and  other  assets  of  $2.7  million,  which was somewhat offset by a


                                       14
<PAGE>
decrease  in  investments of $6.3 million.  Deposits increased $36.6 million and
securities  sold  under  repurchase agreements decreased $4.0 million during the
six  months  ended  June  30,  2003.  For the twelve months ended June 30, 2003,
loans  increased $67.3 million, investments increased $7.1 million, cash and due
from  banks  increased  $3.9  million  and  other assets increased $3.2 million,
somewhat offset by a decrease in federal funds sold of $5.7 million.  During the
past  twelve months, deposits increased $75.5 million, and securities sold under
repurchase  agreements  decreased  $9.1  million.

The  return on average assets for the Company was 1.31% for the six months ended
June  30,  2003, compared to 1.09% for the same period last year.  The return on
average  stockholders' equity was 15.76% for the six months ended June 30, 2003,
versus  13.34%  for  the  comparable  period  in  2002.

Net  Interest  Income
---------------------

Net  interest  income increased $575,000 (11.6%) over the second quarter of 2002
and  $1,230,000  (12.8%) during the first six months of 2003 over the comparable
period  in  2002.  Interest  income  on  loans increased $538,000 (9.0%) for the
second  quarter  2003  over the second quarter 2002, and $923,000 (7.8%) for the
six  months  ended  June  30, 2003 over the comparable six-month period in 2002.
Despite  lower interest rates, these increases are due to increased loan volume.
Investment  interest  income  decreased  $186,000 (10.7%) for the second quarter
2003  over the second quarter 2002, and $188,000 (5.6%) for the six months ended
June  30, 2003 over the comparable six-month period in 2002.  Interest income on
investment securities decreased due to the lower interest rates, in spite of the
increased  average balance.  Interest-earning assets were $569.3 million at June
30,  2003,  an  increase  of  $68.7 million (13.7%) over June 30, 2002 and $28.3
million  (5.2%)  over  December 31, 2002.  Despite increases in deposit volumes,
interest expense on deposits decreased $190,000 (8.9%) for the second quarter of
2003  over  the  second  quarter of 2002 and $449,000 (10.3%) for the six months
ended  June  30, 2003 over the comparable six-month period in 2002, due to lower
interest  rates  during 2003.  The decrease in other borrowings interest expense
in  both  the  three-month and six-month periods ended June 30, 2003 compared to
the same periods in 2002 is due to a $5.0 million Federal Home Loan Bank advance
prepayment in September 2002.  A $5.0 million Federal Home Loan Bank advance was
secured  December  30,  2002  at  a lower interest rate.  Despite higher average
balances,  interest  expense on securities sold under repurchase agreements only
had  a  minimal  increase  in  interest expense due to the lower interest rates.

The  Company's  net  interest margin for the three and six months ended June 30,
2003  was  3.85%  and  3.86%,  respectively, compared to 4.05% and 4.06% for the
three  and  six  months  ended  June  30,  2002,  respectively.

Noninterest  Income
-------------------

Noninterest  income  increased  $1,309,000 (50.3%) during the three-month period
ended  June  30, 2003 compared to the three-month period ended June 30, 2002 and
$2,070,000  (41.3%)  during the six-month period ended June 30, 2003 compared to
the  six-month  period ended June 30, 2002.  These increases were primarily from
fee  income  from  the origination and sale of mortgages in the secondary market
which increased $1,292,000 (104.3%) during the three-month period ended June 30,
2003  compared  to  the  three-month  period  ended June 30, 2002 and $1,944,000
(81.9%)  during  the  six-month  period  ended  June  30,  2003  compared to the
six-month  period  ended June 30, 2002. These increases are the result of higher
volumes  of loans sold which are influenced by the low interest rate environment
during  2003.

Noninterest  Expense
--------------------

Noninterest  expense  totaled  $5,949,000  for  the  second  quarter of 2003, an
increase  of  $1,057,000  (21.6%)  over  the  second quarter of 2002 and totaled
$11,151,000  for  the  six months ended June 30, 2003, an increase of $1,714,000
(18.2%)  over  the  comparable  period in 2002. Salary expense of $3,237,000 and
$5,992,000  for  the  three  and  six  months ended June 30, 2003, respectively,


                                       15
<PAGE>
increased  $796,000  (32,6%)  over  the  second  quarter  of 2002 and $1,228,000
(25.8%)  over  the  six  months  ended  June  30,  2002.  Increases  in mortgage
commissions  and  salaries  directly  related  to  the secondary mortgage market
volume  accounted  for  $550,000 of the increase for the three months period and
$856,000  for  the  six-month  period.  Overall company growth accounted for the
remainder  of the increase.  Employee benefits increased $87,000 (15.6%) for the
three  months  ended  June  30, 2003 compared to the three months ended June 30,
2002, and $172,000 (16.1%) for the six months ended June 30, 2003 as compared to
the  six months ended June 30, 2002.  Increased mortgage production accounts for
$36,000 of the increase for the three month period and $73,000 for the six month
period,  while  increases  in medical and dental insurance and 401K expense were
somewhat  offset  by  a  decrease  in  long-term  compensation  expense.  Other
operating  expenses  increased  $153,000 (11.6%) over the second quarter of 2002
and  $278,000  (11.3%)  during  the first six months of 2003 over the comparable
period  in  2002.  The  increase is primarily attributable to expanded marketing
and  loan  costs  associated  with  the  increased  mortgage  volume.

Income  Taxes
-------------

Income  tax  expense  for  the  second  quarter  of  2003 totaled $1,177,000, an
increase  of  $291,000  (37.0%)  from  the  second  quarter of 2002.  Income tax
expense  for  the  six  months  ended  June  30,  2003 totaled $2,045,000 for an
effective  tax  rate  of 34.81% compared to 33.87% for the six months ended June
30,  2002.  The increase in the effective tax rate for the six months ended June
30,  2003  is  primarily  due  to an increase in Sec. 291 interest disallowance.
Income  taxes  are  estimated  on  a  quarterly  basis.

Asset  Quality
--------------

Table  1  which  follows  shows  the  current  and  prior  period  amounts  of
non-performing  assets.  Non-performing  assets  were  $3.0  million at June 30,
2003, compared to $1.9 million at December 31, 2002 and $1.5 million at June 30,
2002.  The impact of a slower economy is reflected in detoriation of a number of
smaller  commercial real estate loans. Additionally, it reflects a higher number
of  consumer  bankruptcies,  which  have  been  placed  on  nonaccrual  pending
disposition  of  bankruptcy  proceedings.  The ratio of non-performing assets to
total  loans and other real estate was 0.69% at June 30, 2003, compared to 0.48%
at  December 31, 2002 and 0.43% at June 30, 2002.  The control and monitoring of
non-performing  assets  continues  to  be  management's  priority.


                                       16
<PAGE>
At  June 30, 2003, December 31, 2002 and June 30, 2002, the Company had no loans
90  days  past  due  and  still  accruing.

Allowance  for  Loan  Losses
----------------------------

The  allowance  for loan losses represents a reserve for probable loan losses in
the  loan portfolio.  The adequacy of the allowance for loan losses is evaluated
periodically  based  on  a  review  of  all  significant  loans, with particular
emphasis  on  impaired,  non-accruing, past due, and other loans that management
believes require special attention.  The determination of the allowance for loan
losses  is considered a critical accounting policy of the Company. See "Critical
Accounting  Policies"  above  for  a  discussion  of  the  determination  of the
allowance.

The allowance for loan losses was $7.1 million at June 30, 2003 and $6.5 million
at  December  31,  2002.  Additions  to  the  allowance for loan losses are made
periodically  to  maintain  the  allowance  at  an  appropriate level based upon
management's  analysis of potential risk in the loan portfolio.  A provision for
losses  in  the  amount of $432,000 was charged to expense for the quarter ended
June  30,  2003  compared  to  $415,000 for the quarter ended June 30, 2002, and
$907,000  for  the six months ended June 30, 2003 compared to $1,085,000 for the
six  months  ended  June  30,  2002.

At June 30, 2003 the ratio of allowance for loan losses to total loans was 1.68%
compared  to  1.65%  at December 31, 2002 and 1.58% at June 30, 2002. Management
considers  the  current  allowance  for  loan  losses appropriate based upon its
analysis  of  the  potential  risk  in  the  portfolio, although there can be no
assurance  that  the  assumptions  underlying  such analysis will continue to be
correct.

Liquidity  and  Capital  Resources
----------------------------------

The  Company's  liquidity  remains  adequate  to meet operating and loan funding
requirements.  The  loan to deposit ratio at June 30, 2003 was 88.3% compared to
90.3%  at  December  31, 2002 and 88.3% at June 30, 2002.  Loans increased $67.3
million from June 30, 2002 and $24.4 million during the first six months of 2003
while  deposits  increased  $75.5 million from June 30, 2002 and increased $36.6
million during the first six months of 2002.   Deposits at June 30, 2003 include
$25.0  million  of  brokered  certificates  of deposit, a $10.0 million increase
since  December  31,  2002.  The  Company  also  uses  Federal  Home  Loan  Bank
borrowings,  reverse  repurchase agreements and securities sold under repurchase
agreements to fund loan growth.  The Company maintains a line of credit with the
Federal  Home  Loan  Bank approximating 10% of the Bank's total assets.  Federal
Home Loan Bank advances are collateralized by eligible first mortgage loans, and
commercial  real  estate  loans.  The  Company  has  a  federal  funds purchased
accommodation  with The Bankers Bank, Atlanta, Georgia, for advances up to $12.8
million  and  with  SunTrust  Bank,  Atlanta,  Georgia  for advances up to $10.0
million.  The  Company  maintains  repurchase  lines  of  credit  with  SunTrust
Robinson  Humphrey,  Atlanta, Georgia, for advances up to $11.0 million and with
The  Bankers  Bank, Atlanta, Georgia, for advances up to $10.0 million.  At June
30,  2003,  securities sold under repurchase agreements included $6.0 million in


                                       17
<PAGE>
repurchase  agreements  with  SunTrust  Robinson  Humphrey,  Atlanta,  Georgia.
Additionally,  liquidity  needs  can  be  satisfied  by  the  structuring of the
maturities  of investment securities and the pricing and maturities on loans and
deposits  offered to customers. While there were no increases in FHLB borrowings
from  June  30,  2002  and  from  December  31,  2002, an advance was prepaid in
September  2002  and  another  advance secured at a lower rate in December 2002.
Securities sold under repurchase agreements decreased $9.1 million from June 30,
2002  and  $4.0  million  from  December  31,  2002.

Shareholders'  equity to total assets was 8.4% at June 30, 2003 compared to 8.1%
at  June 30, 2002 and 8.2% at December 31, 2002.  The capital of the Company and
the  Bank  exceeded  all  required  regulatory guidelines at June 30, 2003.  The
Company's  Tier  1 risk-based, total risk-based and leverage capital ratios were
10.21%, 11.46%, and 8.09%, respectively, at June 30, 2003. Table 2 which follows
reflects  the  current  regulatory  capital  levels  in  more  detail, including
comparisons  to  the  regulatory  minimums.

Management  is  not  aware  of  any  events or uncertainties that are reasonably
likely  to  have a material effect on the Company's liquidity, capital resources
or  operations.

Commitments  and  Contractual  Obligations
------------------------------------------

The Bank is a party to lines of credit with off-balance sheet risk in the normal
course  of  business  to  meet  the  financing needs of its customers.  Lines of
credit are unfunded commitments to extend credit.  These instruments involve, in
varying  degrees,  exposure  to  credit  and interest rate risk in excess of the
amounts  recognized  in the financial statements.  The Bank's exposure to credit
loss  in  the  event  of  nonperformance  by  the  other  party to the financial
instrument  for  unfunded  commitments to extend credit and letters of credit is
represented  by the contractual amount of those instruments.  The Bank evaluates
construction  and acquisition and development loans for the percentage completed
before  extending  additional credit.  The Bank follows the same credit policies
in  making  commitments  and  conditional  obligations as it does for on-balance
sheet  instruments.

Unfunded commitments to extend credit where contract amounts represent potential
credit  risk  totaled  $90,320,000  at  June  30,  2003.  These  commitments are
primarily  at  variable  interest  rates.

The  Company's  commitments  are  funded  through  internal  funding  sources of
scheduled  repayments of loans and sales and maturities of investment securities
available  for  sale  or external funding sources through acceptance of deposits
from  customers  or  borrowings  from  other  financial  institutions.

The  following table is a summary of the Company's commitments to extend credit,
commitments  under  contractual  leases  as  well  as  the  Company' contractual


                                       18
<PAGE>
obligations,  consisting  of deposits, FHLB advances, which are subject to early
termination  options,  and  borrowed  funds by contractual maturity date for the
next  five  years.

<TABLE>
<CAPTION>

       Commitments and            Due in       Due in       Due in       Due in       Due in
   Contractual Obligations        1 Year       2 Years      3 Years      4 Years      5 Years
-----------------------------  ------------  -----------  -----------  -----------  -----------
<S>                            <C>           <C>          <C>          <C>          <C>

Lines of credit                $ 90,320,000            -            -            -            -
Lease agreements                    154,534       84,489       50,934       36,350       12,700
Deposits                        223,548,274   79,793,089   72,696,755   29,768,451   29,209,125
Securities sold under
   repurchase agreements         38,988,602            -            -            -            -
FHLB advances                     5,000,000            -            -            -            -
Other borrowings                  1,000,000            -            -            -            -
                               ------------  -----------  -----------  -----------  -----------
   Total commitments and
      contractual obligations  $359,011,410  $79,877,578  $72,747,689  $29,804,801  $29,221,825
                               ============  ===========  ===========  ===========  ===========
</TABLE>

Although management regularly monitors the balance of outstanding commitments to
fund  loans  to  ensure  funding  availability should the need arise, management
believes  that  the  risk  of  all customers fully drawing on all these lines of
credit  at  the  same  time  is  remote.

Effects  of  Inflation  and  Changing  Prices
---------------------------------------------

Inflation  generally  increases  the cost of funds and operating overhead and to
the  extent  loans  and  other  assets  bear  variable rates, the yields on such
assets.  Unlike  most  industrial  companies,  virtually  all  of the assets and
liabilities  of  a  financial  institution are monetary in nature.  As a result,
interest  rates generally have a more significant impact on the performance of a
financial institution than the effects of general levels of inflation.  Although
interest  rates  do  not  necessarily move in the same direction and to the same
extent  as  the  prices  of goods and services, increases in inflation generally
have  resulted in increased interest rates.  In addition, inflation can increase
a  financial  institution's  cost  of  goods and services purchased, the cost of
salaries  and  benefits,  occupancy  expense  and  similar items.  Inflation and
related  increases  in  interest  rates  generally  decrease the market value of
investments  and  loans  held  and may adversely affect liquidity, earnings, and
stockholders'  equity.  Mortgage  originations  and refinancings tend to slow as
interest  rates  increase,  and  can  reduce  the  Company's  earnings from such
activities  and  the  income  from the sale of residential mortgage loans in the
secondary  market.


                                       19
<PAGE>
TABLE  1
--------
<TABLE>
<CAPTION>
                GEORGIA BANK FINANCIAL CORPORATION AND SUBSIDIARY
                           CONSOLIDATED FINANCIAL DATA
                             (Dollars in Thousands)
                                   (Unaudited)



                                  Six Months Ended June 30,
                               ------------------------------
<S>                            <C>           <C>
PROFITABILITY                       2003            2002
-------------                  ------------  ----------------

Return on average assets *            1.31%             1.09%

Return on average equity *           15.76%            13.34%

ALLOWANCE FOR LOAN LOSSES
-------------------------

Beginning balance, January 1,  $     6,534   $         5,109
Provision charged to expense           907             1,085
Recoveries                             310               254
Loans charged off                      676               858
                               ------------  ----------------
Ending balance, June 30,       $     7,075   $         5,590
                               ============  ================
</TABLE>

<TABLE>
<CAPTION>
NON-PERFORMING ASSETS        June 30, 2003   December 31, 2002   June 30, 2002
---------------------------  --------------  ------------------  --------------
<S>                          <C>             <C>                 <C>
Non-accrual loans            $        2,917  $            1,897  $        1,526
Other real estate owned                 117                   0               0
                             --------------  ------------------  --------------

Total non-performing assets  $        3,034  $            1,897  $        1,526
                             ==============  ==================  ==============
</TABLE>

*  Annualized


                                       20
<PAGE>
TABLE  2
--------
<TABLE>
<CAPTION>
                       Georgia Bank Financial Corporation
                                       and
                           Georgia Bank & Trust Company
                         Regulatory Capital Requirements
                                  June 30, 2003
                             (Dollars in Thousands)


                            Actual            Required           Excess
                        Amount   Percent   Amount  Percent   Amount  Percent
                        -----------------  ----------------  ----------------
<S>                     <C>      <C>       <C>     <C>       <C>     <C>
Georgia Bank Financial
Corporation
Risk-based capital:
   Tier 1 capital       $48,453    10.21%  18,980     4.00%  29,473     6.21%
   Total capital         54,398    11.46%  37,959     8.00%  16,439     3.46%
Tier 1 leverage ratio    48,453     8.09%  23,946     4.00%  24,507     4.09%


Georgia Bank & Trust
Company
Risk-based capital:
   Tier 1 capital       $45,752     9.68%  18,915     4.00%  26,837     5.68%
   Total capital         51,677    10.93%  37,829     8.00%  13,848     2.93%
Tier 1 leverage ratio    45,752     7.66%  23,882     4.00%  21,870     3.66%
</TABLE>


                                       21
<PAGE>
Item  3.  Quantitative  and  Qualitative  Disclosures  About  Market  Risk

As  of  June  30,  2003,  there were no substantial changes in the interest rate
sensitivity  analysis or the sensitivity of market value of portfolio equity for
various  changes  in  interest  rates  calculated  as of December 31, 2002.  The
foregoing  disclosures  related to the market risk of the Company should be read
in  conjunction  with  the  Company's audited consolidated financial statements,
related  notes  and  management's discussion and analysis of financial condition
and  results  of operations for the year ended December 31, 2002 included in the
Company's  2002  Annual  Report  on  Form  10-K,  Item  7A.

Item  4.  Controls  and  Procedures

As  of  the end of the period covered by this report, the Company carried out an
evaluation,  under  the  supervision and with the participation of the Company's
management,  including  the  Company's  President  and  Chief  Executive Officer
(principal  executive  officer)  and  its  Executive  Vice  President  and Chief
Operating  Officer  (principal  financial  officer), of the effectiveness of the
design  and  operation  of  the  Company's  disclosure  controls  and procedures
pursuant to Exchange Act Rule 13a-15.  Based upon that evaluation, such officers
concluded that the Company's disclosure controls and procedures are effective in
timely  alerting them to material information relating to the Company (including
its  consolidated subsidiaries) that is required to be included in the Company's
periodic  filings  with the Securities and Exchange Commission.  There have been
no  significant  changes in the Company's internal controls or, to the Company's
knowledge,  in  other  factors  that  could  significantly affect those internal
controls  subsequent  to  the  date  the Company carried out its evaluation, and
there  have  been no corrective actions with respect to significant deficiencies
or  material  weaknesses.


                                       22
<PAGE>
                                     Part II
                                OTHER INFORMATION


Item 1.  Legal  Proceedings

          There  are  no material pending legal proceedings to which the Company
          or  any  of  its  subsidiaries  is  a  party  or of which any of their
          property  is  subject.

Item 2.  Changes  in  Securities

          Not  applicable

Item 3.  Defaults  Upon  Senior  Securities

          Not  applicable

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

     (a)  The  Annual  Meeting of Shareholders was held on April 16, 2003 at the
          Company's  office  located  at  3530  Wheeler  Road, Augusta, Georgia.

     (b)  The  following directors were elected for a term of one year and until
          a  successor  is  duly  qualified  and  elected:

               William  J.  Badger
               R.  Daniel  Blanton
               Warren  Daniel
               Edward  G.  Meybohm
               Robert  W.  Pollard,  Jr.
               Randolph  R.  Smith
               Ronald  L.  Thigpen
               John  W.  Trulock,  Jr.

     (c)  The  following  matters were voted on at the meeting as was previously
          identified  in  the  Proxy  materials  forwarded  to each shareholder:


                                       23
<PAGE>
          1.   Proposal to elect the nine individuals nominated by management as
               Directors.

              Votes  were  cast  as  follows:

          Director                       For       Withhold        Abstain
          --------                       ---       --------        -------

          William  J.  Badger          2,199,524      0               55
          R.  Daniel  Blanton          2,199,524      0               55
          Warren  Daniel               2,199,524      0               55
          Edward  G.  Meybohm          2,199,524      0               55
          Robert  W. Pollard, Jr.      2,199,524      0               55
          Randolph  R.  Smith,  M.D.   2,199,524      0               55
          Ronald  L.  Thigpen          2,199,524      0               55
          John  W.  Trulock,  Jr.      2,199,524      0               55

Item 5.  Other  Information

          None

Item 6.  Exhibits  and  Reports  on  Form  8-K.

     (a)  Exhibits

          3.1  Articles  of  Incorporation  of  the  Company  (Incorporated  by
          reference from the Company's registration statement on Form SB-2 filed
          August  20,  1997  (Registration  No.  333-34037)).

          3.2  Bylaws of the Company (Incorporated by reference to the Company's
          Form  10-KSB,  dated  April  29,  1994).

          31.1  Certification of Chief Executive Officer Pursuant to Section 302
          of  the  Sarbanes  -  Oxley  Act  of  2002.

          31.2  Certification of Chief Financial Officer Pursuant to Section 302
          of  the  Sarbanes  -  Oxley  Act  of  2002.

          32.1  Certification  of  Chief  Executive  Officer and Chief Financial
          Officer  Pursuant  to Section 906 of the Sarbanes - Oxley Act of 2002.

     (b)  Reports  on  Form  8-K

          Form  8-K  filed  on  April 29, 2003, reporting earnings for the first
          quarter  of  2003  under  Item 9 Pursuant to instructions contained in
          Item  12  and  SEC  Release  No.  33-8176  and  34-47226.


                                       24
<PAGE>
                       GEORGIA BANK FINANCIAL CORPORATION
                              Form 10-Q Signatures


     Pursuant  to  the  requirements of the Securities Exchange Act of 1934, the
registrant  caused  this  report  to be signed on its behalf by the undersigned,
thereunto  duly  authorized.

                              GEORGIA  BANK  FINANCIAL  CORPORATION



Date:  August 13,  2003    By:     /s/  Ronald L. Thigpen
       ----------------       -------------------------------
                                   Ronald  L.  Thigpen
                                   Executive  Vice  President,  Chief  Operating
                                   Officer  (Duly  Authorized  Officer  of
                                   Registrant  and  Principal Financial Officer)


                                       25
<PAGE>