<PAGE>

                      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 March 31, 2000.

                                               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)

  Check whether the issuer: (1) 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
    ----     ----

                     APPLICABLE ONLY TO CORPORATE ISSUERS

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

  2,093,152 shares of common stock, $3.00 par value per share, issued and
outstanding as of April 30, 1999.


<PAGE>

<TABLE>
<CAPTION>
                               GEORGIA BANK FINANCIAL CORPORATION
                                            FORM 10-Q
                                              INDEX
<S>                                                                                     <C>
                                                                                          Page
Part I
        Item 1.   Financial Statements (Unaudited)

                  Consolidated Balance Sheets as of March 31,
                  2000 and December 31, 1999                                                3

                  Consolidated Statements of Income for the three
                  months ended March 31, 2000 and March 31, 1999                            4

                  Consolidated Statements of Cash Flows for the
                  three months ended March 31, 2000 and March 31, 1999                      5

                  Notes to Consolidated Financial Statements                                6

        Item 2.   Management's Discussion and Analysis of
                  Financial Condition and Results of Operations                             7

        Item 3    Quantitative and Qualitative Disclosures about Market Risk               14

Part II  Other Information                                                                 15
        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
        Item 5.   Other Information
        Item 6.   Exhibits and Reports on Form 8-K

Signature                                                                                  16

</TABLE>

                                       1
<PAGE>

                                     PART I

                             FINANCIAL INFORMATION

                                       2
<PAGE>

               GEORGIA BANK FINANCIAL CORPORATION AND SUBSIDIARY
                           Consolidated Balance Sheet
                                  (Unaudited)
<TABLE>
<CAPTION>

                                                                                   March 31,                   December 31,
ASSETS                                                                               2000                          1999
                                                                            -----------------------    --------------------------
<S>                                                                            <C>                       <C>
Cash and due from banks                                                                $ 15,892,563                  $ 13,642,007
Federal funds sold                                                                       18,750,000                     9,830,000
                                                                            -----------------------    --------------------------
    Cash and cash equivalents                                                            34,642,563                    23,472,007

Investment securities
   Available-for-sale                                                                    69,711,216                    60,054,449
   Held-to-maturity, at cost (fair values of
       $7,301,791 and $7,102,288, respectively)                                           7,450,729                     7,281,743

Loans                                                                                   251,313,006                   239,031,667
   Less allowance for loan losses                                                        (3,804,113)                   (3,591,613)
                                                                            -----------------------    --------------------------
      Loans, net                                                                        247,508,893                   235,440,054

Premises and equipment, net                                                              10,298,331                    10,481,160
Accrued interest receivable                                                               3,013,384                     2,792,978
Other real estate                                                                            16,942                        16,942
Intangible assets, net                                                                      462,035                       492,806
Other assets                                                                              2,477,298                     2,068,970
                                                                            -----------------------    --------------------------
                                                                                       $375,581,391                  $342,101,109
                                                                            =======================    ==========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
     Non-interest bearing                                                              $ 49,412,472                  $ 43,171,186
     Interest bearing
        NOW accounts                                                                     38,522,831                    34,659,905
        Savings                                                                          99,855,797                    94,010,408
        Money management accounts                                                        22,755,226                    14,674,717
        Time deposits over $100,000                                                      42,990,259                    45,454,055
        Other time deposits                                                              51,442,706                    51,150,474
                                                                            -----------------------    --------------------------
                                                                                        304,979,291                   283,120,745

Federal funds purchased and securities sold
    under repurchase agreements                                                          14,965,160                    11,331,388
Advances from Federal Home Loan Bank                                                     21,000,000                    15,000,000
Other borrowed funds                                                                        650,000                     1,000,000
Accrued interest and other liabilities                                                    2,884,838                     1,832,245
                                                                            -----------------------    --------------------------
          Total liabilities                                                             344,479,289                   312,284,378
                                                                            -----------------------    --------------------------

Stockholders' equity
  Common stock, $3.00 par value; 10,000,000 shares
     authorized; shares issued and outstanding of
     2,093,152 in 2000 and 1999                                                           6,279,456                     6,279,456
  Additional paid-in capital                                                             21,259,955                    21,259,955
  Retained earnings                                                                       4,075,930                     3,166,195
  Accumulated other comprehensive loss                                                     (513,239)                     (888,875)
                                                                            -----------------------    --------------------------
          Total stockholders' equity                                                     31,102,102                    29,816,731
                                                                            -----------------------    --------------------------
                                                                                       $375,581,391                  $342,101,109
                                                                            =======================    ==========================
See notes to consolidated financial statements.
</TABLE>

                                       3
<PAGE>

               GEORGIA BANK FINANCIAL CORPORATION AND SUBSIDIARY
                       Consolidated Statements of Income
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                                        Three Months Ended March 31,
                                                                        ---------------------------------------------------------
<S>                                                                       <C>                           <C>
                                                                                              2000                           1999
                                                                        --------------------------    ---------------------------
Interest income
   Loans, including fees                                                                $5,582,783                     $4,699,026
   Investment securities                                                                 1,153,489                        827,333
   Federal funds sold                                                                       97,606                         73,633
                                                                        --------------------------    ---------------------------
                                                                                         6,833,878                      5,599,992
                                                                        --------------------------    ---------------------------
Interest expense
   Deposits                                                                              2,895,656                      2,304,260
   Federal funds purchased and securities sold
       under repurchase agreements                                                         129,927                         47,850
   Other borrowings                                                                        233,194                        135,196
                                                                        --------------------------    ---------------------------
                                                                                         3,258,777                      2,487,306
                                                                        --------------------------    ---------------------------
Net interest income                                                                      3,575,101                      3,112,686

Provision for loan losses                                                                  258,000                        227,000
                                                                        --------------------------    ---------------------------
Net interest income after provision for loan losses                                      3,317,101                      2,885,686
                                                                        --------------------------    ---------------------------
Non-interest income
   Service charges and fees on deposits                                                    639,948                        655,420
   Gain on sale of loans                                                                   118,844                        198,011
   Investment securities losses, net                                                       (28,517)                        (1,128)
   Miscellaneous income                                                                     76,426                         74,260
                                                                        --------------------------    ---------------------------
                                                                                           806,701                        926,563
                                                                        --------------------------    ---------------------------

Non-interest expense
   Salaries                                                                              1,211,932                      1,123,123
   Employee benefits                                                                       360,567                        334,540
   Occupancy expenses                                                                      408,901                        408,455
   Other operating expenses                                                                753,467                        707,545
                                                                        --------------------------    ---------------------------
                                                                                         2,734,867                      2,573,663
                                                                        --------------------------    ---------------------------
Income before income taxes                                                               1,388,935                      1,238,586

Income tax expense                                                                         479,200                        448,051
                                                                        --------------------------    ---------------------------
Net income                                                                              $  909,735                     $  790,535
                                                                        ==========================    ===========================
Basic income per share                                                                       $0.43                          $0.38
                                                                        ==========================    ===========================
Weighted average common shares outstanding                                               2,093,152                      2,093,152
                                                                        ==========================    ===========================
See notes to consolidated financial statements.
</TABLE>

                                       4
<PAGE>

               GEORGIA BANK FINANCIAL CORPORATION AND SUBSIDIARY
                     Consolidated Statements of Cash Flows
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                         Three Months Ended March 31,
                                                                     2000                          1999
                                                                 ------------                  ------------
<S>                                                              <C>                            <C>
Cash flows from operating activities
Net income                                                       $    909,735                  $    790,535
  Adjustments to reconcile net income to net cash
   provided by operating activities
     Depreciation and amortization                                    279,735                       286,125
     Provision for loan losses                                        258,000                       227,000
     Net investment securities losses                                  28,517                         1,128
     Net (accretion) amortization of discount/premium
       on investment securities                                        (7,775)                       15,069
     Gain (loss) on disposal of premises and equipment                    204                          (870)
     Gain on the sale of other real estate                                 -                         (5,274)
     Gain on sale of loans                                           (118,844)                     (198,011)
     Real estate loans originated for sale                         (7,928,275)                   (8,933,767)
     Proceeds from sales of real estate loans                       7,583,875                     9,849,023
     Increase in accrued interest receivable                         (220,406)                     (100,751)
     Increase in prepaid expense                                     (116,709)                      (68,050)
     Increase in other assets                                        (485,127)                      787,004
     Increase in accrued interest and other liabilities             1,052,593                       489,614
                                                                 ------------                  ------------
       Net cash provided by operating activities                    1,235,523                     3,138,775
                                                                 ------------                  ------------
Cash flows from investing activities
     Proceeds from sales of available-for-sale securities           2,927,861                     3,841,698
     Proceeds from maturities of
       available-for-sale securities                                  725,680                     3,497,833
     Proceeds from maturities of held-to-maturity
       securities                                                      36,008                        16,315
     Purchase of held-to-maturity securities                         (207,532)                     (197,736)
     Purchase of available-for-sale securities                    (12,587,768)                  (10,058,041)
     Purchase of FHLB stock                                          (171,600)                            -
     Net increase in loans                                        (11,863,595)                  (10,287,513)
     Net purchase of premises and equipment                          (102,262)                      (82,044)
     Proceeds from the sale of other real estate                            -                       484,832
     Proceeds from the sale of premises and equipment                  35,923                        10,010
                                                                 ------------                  ------------
     Net cash used in investing activities                        (21,207,285)                  (12,774,646)
                                                                 ------------                  ------------
 Cash flows from financing activities
     Net increase in deposits                                      21,858,546                    17,282,960

</TABLE>


                                       5
<PAGE>

<TABLE>
<CAPTION>

   <S>                                                         <C>                          <C>
     Net increase in federal funds purchased and
       securities sold under repurchase agreements                  3,633,772                     8,584,323
     Payments on notes and bonds payable                             (350,000)                     (550,000)
     Advances from Federal Home Loan Bank                          17,000,000                             -
     Payments of FHLB advances                                    (11,000,000)                            -
                                                             -----------------              ----------------
        Net cash provided by financing activities                  31,142,318                    25,317,283
                                                             -----------------              ----------------
        Net increase in cash and cash equivalents                  11,170,556                    15,681,412

Cash and cash equivalents at beginning of period                   23,472,007                     9,916,911
                                                             ----------------               ---------------
Cash and cash equivalents at end of period                       $ 34,642,563                  $ 25,598,323
                                                             ================               ===============

Supplemental disclosures of cash paid during the period for:
     Interest                                                       3,095,871                     2,457,604
     Income taxes                                                      12,000                        76,413
See notes to consolidated financial statements.
</TABLE>

                                       6
<PAGE>

               GEORGIA BANK FINANCIAL CORPORATION AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                      March 31, 2000 and December 31, 1999

Note 1 - Basis of Presentation

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

The financial statements for the three months ended March 31, 2000 and 1999 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 generally accepted accounting principles 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-KSB for the
year ended December 31, 1999.

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 are not necessarily indicative of the results of
operations which the Company may achieve for the entire year.

Note 2 - Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities."  SFAS No.. 133 is effective for financial
statements for all fiscal quarters  of fiscal years beginning after June 15,
1999.  In June 1999, the FASB issued SFAS No. 137, Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective Date of FASB
Statement No. 133 (an amendment of FASB Statement No. 133) SFAS No. 133, as
amended, is now effective for all fiscal quarters of fiscal years beginning
after June 15, 2000  The Company does not believe the provisions of SFAS No. 133
will have a significant impact on the financial statements upon adoption.

Note 3 - Comprehensive Income

Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income."  SFAS No. 130 establishes standards for reporting and
displaying comprehensive income and its components in a full set of general
purpose financial statements.  The primary component of the differences between
net income and comprehensive income for the Company is net unrealized gains and
losses on investment securities.  Total comprehensive income for the three
months ended March 31, 2000 was $1,285,371 compared to $1,147,865 for the three
months ended March 31, 1999.

                                       7
<PAGE>

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

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

  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.

Net Income
----------

The Company's net income was $910,000 for the first quarter of 2000, an increase
of $119,000 (15.0%) compared to net income of $791,000 for the first quarter of
1999.  Earnings per share were $0.43 in the first quarter of 2000 compared to
$0.38 for the first quarter 1999, an increase of 13.2%.  Total assets increased
to $376 million, an increase of $34 million (9.9%) from year-end 1999 and $54
million (16.8%) from March 31, 1999.

The increase in net income resulted primarily from an increase in net interest
income of $462,000.  Non-interest income decreased $120,000.  The Company's
provision for loan losses during the quarter was $258,000, an increase of
$31,000, and non-interest expense increased $161,000.  Income before income
taxes increased $150,000 (12.1%).

The return on average assets for the Company was 1.03% for the quarter ended
March 31, 2000, compared to 1.04% for the same period last year.  The decrease
in return on average assets is the result of significant growth in assets during
the first quarter of 2000, due primarily to growth in temporary deposits and
loan balances.  The return on average

                                       8
<PAGE>

equity for the three month period ended March 31, 2000 was 11.95%, compared to
10.83% for the comparable period in 1999.

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

Net interest income increased $462,000 (14.8%) during the first quarter of 2000
over the comparable period in 1999, primarily due to increases in interest
earning asset balances. Interest earning assets were $347.2 million at March 31,
2000, an increase of $31.0 million (9.8%) over year-end 1999 and $49.8 million
(16.75%) over March 31, 1999. Loans, the highest yielding component of interest
earning assets, were $251.3 million, an increase of $12.3 million (4.9%) over
year-end 1999 and $33.4 million (15.3%) over March 31, 1999. Investments in
securities were $77.2 million, an increase of $9.8 million (14.5%) from year-end
and $10.6 million (15.9%) from March 31, 1999. Federal funds sold increased over
year-end by $8.9 million, and increased $5.7 million from March 31, 1999. The
substantial increase in federal funds sold during the first quarter of 2000 is
attributable to temporary deposits of approximately $8.6 million received on
March 31, 2000. The growth in federal funds sold is temporary as a significant
amount of the deposits supporting this asset are expected to be withdrawn early
in the second quarter of 2000 and the remainder of the federal funds sold are
expected to be reinvested in higher yielding loans and securities.

Interest Income
---------------

Interest income increased $426,000 (6.3%) for the first quarter of 2000 from the
fourth quarter of 1999 and increased $1.2 million (21.4%) over the comparable
quarter in 1999.  Interest income on loans increased $276,000 (5.2%) for the
first quarter when compared to fourth quarter 1999 and increased $884,000
(18.8%) over the comparable quarter of 1999.  The increase in interest income on
loans is attributable to both higher interest rates as well as an increase in
loan balances.  Interest income earned on investment securities increased
$168,000 (17.1%) for the quarter from the fourth quarter of 1999 and increased
$326,000 (39.4%) from the first quarter of 1999.  The increase in interest
earned on investment securities is due to higher interest rates and an increase
in investment balances. Interest income from federal funds sold decreased
$19,000 (16.1%) over the fourth quarter of 1999 and increased $24,000 over the
comparable quarter ended March 31, 1999.  The decrease in Federal Funds Sold as
compared to the fourth quarter of 1999 is attributable to excess cash maintained
for Y2K in December 1999 while the increase over the comparable quarter ended
March 31, 1999 is due to fluctuating deposits.

Interest Expense
----------------

Interest expense totaled $3.3 million for the first quarter of 2000, an increase
of $242,000 (8.0%) from the fourth quarter of 1999, and an increase of $771,000
(31.0%) over the comparable quarter in 1999.  Interest on interest-bearing
deposits increased $175,000 (6.4%) over the fourth quarter of 1999 and $591,000
(25.7%) over the quarter ended March 31, 1999.  The increase is due to higher
interest rates and higher volumes of interest-bearing deposit balances.
Interest-bearing balances were $255.6 million at March

                                       9
<PAGE>

31, 2000, an increase of $15.6 million (6.5%) from December 31, 1999 and $28.8
million (12.7%) over March 31, 1999. However, approximately $5,000,000 of
temporary interest-bearing deposits were received on March 31, 2000. Interest
expense on Federal Funds purchased and securities sold under repurchase
agreements increased $33,000 (16.9%) and 82,000 (171.5%) over the quarters ended
December 31, 1999 and March 31, 1999, respectively. This increase is due to
higher interest rates and higher volumes of securities sold under repurchase
agreements. Interest expense on Other Borrowings increased 34,000 (16.9%) over
the quarter ended December 31, 1999, and $98,000 (72.5%) from the quarter ended
March 31, 1999. This increase is due to increased Federal Home Loan Bank
borrowings needed to support loan growth. Federal Home Loan Bank borrowings
increased $6.0 million (40.0%) from December 1999 and $12.0 million (133.3%)
from March 1999. However, $4.0 million of Federal Home Loan Bank borrowings at
March 31, 2000 were repaid on April 2, 2000.

Non-interest Income
-------------------

Non-interest income for the first quarter decreased $55,000 (6.3%) from the
fourth quarter of 1999 and $120,000 (12.9%) from the first quarter of 1999.  The
decrease from the fourth quarter is a result of lower services charges and fees
on deposits of $55,000, primarily NSF income and safe deposit income and losses
on investment securities of  $21,000. The decrease was offset by gains on sale
of mortgage loans of $22,000 The  decrease in sale of mortgage loans to
attributable to the rising interest rates.  The decrease from the first quarter
of 1999 resulted from a $15,000 decrease in service charges and fees on deposits
due to lower NSF fees and ATM surcharge income resulting from the removal of
three ATM machines.  Non-interest income also decreased due to decreases in gain
on sale of mortgage loans of $79,000 resulting from lower volumes of loan
originations as well as an increase in losses on investment securities sales.

Non-interest Expense
--------------------

Non-interest expense totaled $2.7 million for the first quarter of 2000, an
increase of $12,000 (0.4%) above the fourth quarter of 1999 and an increase of
$161,000 (6.3%) over the comparable period in 1999.  The increase over the
fourth quarter of 1999 is the result due primarily to higher personnel expense
offset by lower processing costs than were incurred in the fourth quarter of
1999 resulting from Y2K and ATM conversion expenses.  The increase from the
comparable period in 1999 is primarily attributable to increases in personnel
expenses, professional fees, contributions, and communications expenses which
were offset by decreases in marketing and business development expenses.

The increase in non-interest expense from the comparable period in 1999 reflects
the continued growth in the Company's local market share. The increased
operating expenses and personnel expenses associated with operating seven
banking offices reflects increased volumes of loans and deposits. Management
continues to focus on expense control and improving operating efficiencies. The
operating efficiency ratio improved to 62.0% during the first quarter of 2000 as
compared to 63.7% for the first quarter of 1999.

                                       10
<PAGE>

Income taxes
------------

Income taxes in the first quarter of 2000 totaled $479,000; an increase of
$31,000 over the first quarter of 1999 as a result of increased income before
taxes.

Asset quality
-------------

The table on page 12 shows the current and prior period amounts of non-
performing assets.  Non-performing assets were $1.2 million at March 31, 2000,
compared to $1.2 million at December 31, 1999 and $2.2 million at March 31,
1999.  The ratio of non-performing assets to total loans and other real estate
was .46% at March 31, 2000, down from .94% at December 31, 1999 and down from
1.03% at March 31, 1999.  Reduction of non-performing assets continues to be a
priority of management.

Loans past due 90 days or more and still accruing interest totaled $375,000, up
from $251,000 at December 31, 1999 and up from $20,000 at March 31, 1999.  Based
upon information available to it, management believes that the value of
collateral securing each loan is sufficient to cover principal and interest.

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.  The amount of the loan loss provision is determined
by an evaluation of the level of loans outstanding, the level of non-performing
loans, historical loan loss experience, delinquency trends, the amount of actual
losses charged to the allowance in a given period, and assessment of present and
anticipated economic conditions.  A provision for losses in the amount of
$258,000 was charged to expense for the first quarter ended March 31, 2000
compared to $227,000 for the same quarter of 1999.  The increase in the loan
loss provision resulted from the continuing growth in the level of loans
outstanding.    At March 31, 2000, the ratio of allowance for loan losses to
total loans was 1.51%, compared to 1.50% at December 31, 1999 and 1.29% at March
31, 1999.  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 March 31, 2000 was 82.40% compared
to 84.43% at December 31, 1999 and 81.06% at March 31, 1999.  The decrease in
the loan to deposit ratio during the first quarter of 2000 is the result of
deposit balances increasing in greater proportion to loans as deposit balances
increased $21.9 million while loans increased $12.3 million.  The loan to
deposit ratio increased when compared to March 31, 1999 as the percentage
increase in loans increased faster (15.3%) than the percentage increase in
deposit balances (13.5%).  The Company utilizes the Federal Home Loan Bank as a
source of funds and had $21.0 million borrowed at March 31, 2000 and $15 million
borrowed at December 31, 1999.  The Company had $9.0 million in Federal Home
Loan

                                       11
<PAGE>

Bank borrowings outstanding at March 31, 1999.  The Company repaid $4.0
million Federal Home Loan Bank borrowings on April 2, 2000.

     Total stockholders' equity was $31.1 million at March 31, 2000, increasing
$1.3 million or 4.3% from December 31, 1999.  The increase was comprised of
earnings of $910,000 and other comprehensive income of $376,000.  The increase
in other comprehensive income represents unrealized gains on investments,
including equity securities.

     Shareholders' equity to total assets was 8.28% at March 31, 2000, compared
to 8.72% at December 31, 1999.  This decrease reflects the $33 million growth of
total assets during the first quarter of 2000.  The capital of the Company and
the Bank exceeded all required regulatory guidelines at March 31, 2000.  The
Company's Tier 1 risk-based, total risk-based and the leverage capital ratios
were 11.04%, 12.30% and 8.82%, respectively, at the end of the first quarter of
2000.  The schedule on page 13 reflects the current capital levels in more
detail, including comparisons to regulatory requirements.

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 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.

                                       12
<PAGE>

                       GEORGIA BANK FINANCIAL CORPORATION
                          CONSOLIDATED FINANCIAL DATA
                             (Dollars in Thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                          Three Months Ended March 31,
                                                                          -----------------------------
<S>                                                                     <C>                      <C>
PROFITABILITY                                                               2000                     1999
-------------                                                              ------                   ------
Return on average assets *                                                  1.03%                    1.04%

Return on average equity *                                                 11.95%                   10.83%


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

Beginning balance, January 1                                              $3,592                   $2,715
Provision charged to expense                                                 258                      227
Recoveries                                                                    30                       16
Loans charged off                                                             76                      141
Ending balance, March 31                                                  $3,804                   $2,817

NON-PERFORMING ASSETS                                   March 31, 2000          December 31, 1999      March 31, 1999
---------------------

Non-accrual loans                                               $1,150                     $1,190               $2,223
Other real estate owned                                             17                         17                   20
Restructured loans                                                  --                         --                   --
                                                      ----------------          -----------------        -------------
Total non-performing assets                                     $1,167                     $1,207               $2,243
                                                      ================          =================        =============
LOANS PAST DUE 90 DAYS OR
MORE AND STILL ACCRUING                                         $  375                     $  251               $   20
                                                      ================          =================        =============
</TABLE>
*  Annualized

                                       13
<PAGE>

                      Georgia Bank Financial Corporation
                                     And
                         Georgia Bank & Trust Company
                       Regulatory Capital Requirements
                                March 31, 2000
                           (Dollars in Thousands)
<TABLE>
<CAPTION>

                                                     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                           31,153           11.04%         11,284           4.00%          19,869         7.04%
   Total capital                            34,704           12.30%         22,568           8.00%          12,136         4.30%
Tier 1 leverage ratio                       31,153            8.82%         14,131           4.00%          17,022         4.82%

Georgia Bank & Trust Company

Risk-based capital:
   Tier 1 capital                           28,835           10.30%         11,193           4.00%          17,642         6.30%
   Total capital                            32,337           11.56%         22,386           8.00%           9,951         3.56%
Tier 1 leverage ratio                       28,835            8.21%         14,056           4.00%          14,779         4.21%
</TABLE>

                                       14
<PAGE>

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
         MARKET RISK

  The Company has not provided quantitative and qualitative disclosures about
market risk as required by Item 305 of Regulations S-K because it has previously
met the requirements of a small business issuer.  The Company will be required
to provide this disclosure for the year ending December 31, 2000 and interim
periods subsequent to that date.

                                       15
<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 to 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.

  None.

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-SB, dated April 29, 1994).

       27.1  Financial Data Schedule

  (b)  Reports on Form 8-K

       None.

                                       16
<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:     May 11, 2000          By: /s/ Ronald L. Thigpen
    ------------------              --------------------------
                                Ronald L. Thigpen
                                Executive Vice President, Chief Operating
                                Officer (Duly Authorized Officer of
                                Registrant and Principal Financial Officer)

                                       17