SECURITIES AND EXCHANGE COMMISSION
                                              WASHINGTON, D.C. 20549
                                                ------------------

                                                     FORM 10-K
(Mark One)
<TABLE>
<CAPTION>
<S>                                                   <C>                            <C>

|X|      Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

         For fiscal year ended March 31, 1999                          OR

|_|      Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934

         For the transition period from ___________ to ____________

         Commission file number

                                             FIRST CITIZENS CORPORATION
---------------------------------------------------------------------------------------------------
                              (Exact Name of Registrant as Specified in Its Charter)

                  GEORGIA                                                       58-2232785
-----------------------------------------------                       -----------------------------
    (State or Other Jurisdiction of                                             (I.R.S. Employer
     Incorporation or Organization)                                             Identification No.)

     19 JEFFERSON STREET
     NEWNAN, GEORGIA                                                                    30263
----------------------------------------                              -----------------------------
     (Address of Principal Executive Offices)                                           (Zip Code)

                                                   (770) 253-5017
--------------------------------------------------------------------------------------------------
                               (Registrant's Telephone Number, Including Area Code)

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

Securities registered pursuant to Section 12(g) of the Act:

                                            COMMON STOCK, $1.00 PAR VALUE
--------------------------------------------------------------------------------------------------
                                                 (Title of Class)
</TABLE>

Indicate by check mark whether the registrant : (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 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
past 90 days.

Yes    X       No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|

Aggregate market value of the voting and non-voting common equity held by
non-affiliates of the Registrant, computed by reference to the average bid and
asked prices of such common equity as of June 11, 1999:
$107,115,000.

         Number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 2,934,658 shares of Common Stock at
June 11, 1999.


<PAGE>

                                     PART I

ITEM 1.           BUSINESS

GENERAL

         First Citizens Corporation (the "Company") is a Georgia corporation and
a bank/thrift holding company located on the Southside of the Metropolitan
Atlanta area. The Company provides financial services through its subsidiary
financial institutions (the "Banks") which offer a variety of banking and other
financial services to individuals and businesses. Its market area includes
Coweta, Fayette, Henry, Clayton and Troup Counties, Georgia.

         The Company was formed on August 22, 1996 when Newnan Savings Bank, FSB
(now known as First Citizens Bank) reorganized itself into a holding company,
Newnan Holdings, Inc. (now known as First Citizens Corporation). In this
reorganization, each shareholder of Newnan Savings Bank received stock in the
new parent company on a one-for-one basis. At the same time, Newnan Holdings
merged with Southside Financial Group, In., the parent company of Citizens Bank
and Trust of Fayette County (now known as First Citizens Bank of Georgia),
issuing 136,990 shares to Southside shareholders. As of March 11, 1997, the
Company acquired all the outstanding stock of Tara Bankshares Corporation, the
parent company of Tara State Bank (now merged into First Citizens Bank of
Georgia), issuing 221,773 shares of its stock to Tara shareholders.

         On January 14, 1997 Newnan Holdings, Inc. changed its name to First
Citizens Corporation and Newnan Savings Bank, FSB changed its name to First
Citizens Bank. On February 7, 1997, Citizens Bank and Trust of Fayette County
changed its name to First Citizens Bank of Fayette County. On February 12, 1999,
the Tara State Bank (which had previously changed its name to First Citizens
Bank of Clayton County) merged with First Citizens Bank of Fayette County, with
the resulting bank being known as "First Citizens Bank of Georgia."

         First Citizens Bank-Newnan is a federally chartered thrift located in
Newnan, Georgia. It was chartered by the State of Georgia in 1927 as Newnan
Building and Loan and converted to a federal charter in 1955. It maintains a
total of ten offices in Newnan, Peachtree City, LaGrange, Fayetteville,
Stockbridge and Hogansville, Georgia.

         First Citizens Bank of Georgia is a full-service state chartered
commercial bank located in Fayetteville, Georgia. It was chartered in 1991 and
maintains branch offices in Riverdale and Jonesboro, Georgia.

         The Company offers mortgage banking services through Citizens Mortgage
Group, Inc., an operating subsidiary of First Citizens Bank-Newnan. Real estate
appraisal services are offered through Newnan Financial Services, Inc., a wholly
owned subsidiary of First Citizens Bank-Newnan. In addition, through Newnan
Financial's subsidiary, Jefferson Ventures, Inc., real estate development was
formerly carried out at White Oak, a golf and lake community in Newnan Georgia.
Currently, Jefferson Ventures is selling its remaining tracts of undeveloped
land.

         On January 26, 1999, the Company entered into an Agreement and Plan of
Reorganization with BB&T Corporation ("BB&T"), pursuant to which the Company
will merge with and into BB&T. Shareholders of the Company will receive shares
of the Common Stock of BB&T in

                                       1

<PAGE>
exchange for their shares of Company Common Stock. During the second quarter of
2000, BB&T intends to merge the Banks into a subsidiary bank of BB&T.

SELECTED CONSOLIDATED FINANCIAL DATA

         [FC/M&J]

LENDING ACTIVITIES

         LOAN PORTFOLIO ANALYSIS. The Company makes real estate-mortgage loans,
real estate-construction loans, commercial loans, and consumer and other loans.
Such loans constituted 49%, 33%, 10% and 8%, respectively, of the Company's
total loans at March 31, 1999, and 45%, 30%, 17% and 8%, respectively, of the
Company's total loans at March 31, 1998.

LOAN PORTFOLIO

TYPES OF LOANS

The amount of loans outstanding at the indicated dates are shown in the
following table according to the type of loan.
<TABLE>
<CAPTION>
                                                                     At March 31,

                                                                (Dollars in Thousands)

                                         1999           1998           1997            1996            1995
                                     ------------- --------------- -------------- --------------------------------
<S>                                  <C>            <C>              <C>            <C>             <C>
Commercial, financial, agricultural  $     31,320   $      43,362    $    25,655    $       1,094   $           -
Real estate - construction                100,442          80,203         60,010           11,203          18,983
Real estate - mortgage (1)                155,824         122,730        152,027          115,938         101,747
Consumer and other                         22,784          21,341         11,456            4,088          10,826
                                     ------------- --------------- -------------- --------------------------------
                                     $    310,370   $     267,636    $   249,148    $     132,323   $     131,556

Less allowance for loan losses              5,012           3,852          3,739            1,371           1,435
                                     ------------- --------------- -------------- --------------------------------
Loans, net                           $    305,358   $     263,784    $   245,409    $     130,952   $     130,121
                                     ============= =============== ============== ================================
</TABLE>

      (1) Includes loans held for sale and is stated net of unearned income and
fees on loans.

MATURITIES AND SENSITIVITIES TO CHANGES IN INTEREST RATES

Total loans as of March 31, 1999 are shown in the following table according to
maturity classifications (1) one year or less, (2) after one year through five
years, and (3) after five years. The disclosure of loans by the above categories
is not available in making this determination; the Company has considered the
estimated expense and capabilities of its data processing system.

                                                              (Dollars in
                                                              Thousands)
                                                             --------------
                    MATURITY:
                    One year or less                         $      185,742
                    After one year through five years                71,855
                    After five years                                 52,773
                                                             --------------
                                                             $      310,370
                                                             ==============

         Residential and Commercial Real Estate Loans. The primary lending
activity of the Company is the granting of conventional loans to enable
borrowers to purchase existing homes. At March 31, 1999, approximately 25%
of the Company's total loan portfolio consisted of loans secured by residential
dwellings (excluding loans held for sale).

         The Company's lending policies generally limit the maximum
loan-to-value ratio on residential mortgage loans to 95% of the lesser of the
appraised value or purchase price, with the condition that private mortgage
insurance be required on any home loans with loan-to-value ratios in excess of
80%. Non-owner occupied residential loans are made up to 80% of the lesser of
the appraised value or purchase price. Multifamily residential and commercial
real estate loans and unimproved real estate loans generally do not exceed 75%
of value.

         The loan-to-value ratio, maturity and other provisions of the loans
made by the Company have generally reflected the policy of making less than the
maximum loan permissible under applicable regulations, in accordance with sound
lending practices, market conditions, and underwriting standards established by
the Company. Mortgage loans made by the Company are generally long-term loans,
amortized on a monthly basis, with principal and interest due each month. The
initial contractual loan payment period for residential loans typically ranges
from 15 to 30 years. The Company's experience indicates that real estate loans
remain outstanding for significantly shorter periods than their contractual
terms. Borrowers may refinance or prepay loans at their option.

         For loans held in its portfolio, the Company offers adjustable rate
mortgages that have rate adjustments each year based upon one-year Treasury
securities. The interest rates on these mortgages are adjustable once a year
with limitations on upward adjustments of 2% per year and 6% over the life of
the loan. The Company also offers loans which adjust a maximum 1% per year and
4% over the life of the loan with an option in which the borrower can convert to
a 30 year fixed-rate loan at 1/2% above the market rate at the time of
conversion.

         Commercial property loans, including loans secured by multifamily
apartment projects with more than four units, constituted approximately 26% of
the Company's loan portfolio at March 31, 1999. These loans are typically
secured by improved real estate located in the Company's primary

                                      2

<PAGE>


lending area. Permanent commercial loans are made up to 75% of the appraised
value of the property and generally have a 20-year amortization and five-year
balloon payment or interest rates that adjust monthly. Although commercial real
estate loans typically have shorter terms to maturity and higher interest rates
than residential mortgage loans, they also involve greater credit risks than
certain residential mortgage loans. Commercial real estate and construction
mortgage loans may involve large loan balances to single borrowers or to groups
of related borrowers. In addition, payment experience on loans secured by income
producing properties is typically dependent on the successful operation of the
properties and thus may be subject to a greater extent to adverse conditions in
the real estate market or in the economy generally. Although adjustable rate
commercial real estate loans provide certain benefits to the Company's
asset/liability management policy, they also pose potential credit risks to the
Company. Specifically, as interest rates rise, the underlying payment by the
borrower also rises, possibly increasing the potential for default. At the same
time, the marketability of the underlying property may be adversely affected by
higher interest rates.

         All improved real estate which serves as loan security to the Company
must be insured in the amount, and by such companies as may be approved by the
Company, against fire, extended coverage, vandalism, malicious mischief and
other hazards. Such insurance must be maintained through the entire term of the
loan and in an amount not less than the amounts necessary to pay the Company's
indebtedness in full.

         CONSTRUCTION LOANS. The Company provides construction financing for
single family dwellings. At March 31, 1999, the Company had construction loans
(net of undisbursed amounts) of approximately 30% of total loans outstanding.

         The Company's general practice is to provide construction loan
financing for a relatively small number of builder-developers. The Company's
policy is to grant single family construction loans up to 80% of the appraised
value for an individual's personal residence and up to 75% for builders.
Construction loans generally are made for a six-month to one-year term. This
period may be extended subject to negotiation and the payment of an extension
fee. Interest rates on loans made to builders are tied to a published prime
rate. The interest rate on other types of construction loans are also tied to a
published prime rate.

         Construction financing is generally considered to involve a higher
degree of credit risk than long term financing of residential properties. The
risk of loss on a construction loan is dependent largely upon the accuracy of
the initial estimate of the property's value at completion of construction or
development and the estimated cost (including interest) of construction. If the
estimate of construction cost and the salability of the property upon completion
of the project prove to be inaccurate, the lender may be required to advance
funds beyond the amount originally committed to permit completion of the
development. If the estimate of value proves to be inaccurate, the lender may be
confronted, at or prior to the maturity of the loan, with a project with a value
that is insufficient to assure full repayment. The company addresses these risks
by providing advances on construction loans only after the project has been
inspected by a party independent of the lending function. These advances are
computed as a percentage of the loan amount (rather than the builders' out of
pocket costs) and are dependent on the completion of certain phases of
construction. If these advances are not sufficient to enable the builder to make
payment to suppliers and subcontractors, the Company can become aware of such
problems through liens placed against the property or by complaints received
directly by the supplier or subcontractor involved. In these instances, the


                                       3

<PAGE>


Company can address the situation by ceasing to advance additional funds until
the problem is resolved, and if necessary, by ultimately foreclosing on the
property.

         The Company's underwriting criteria are designed to evaluate and
minimize the risks of each construction loan. Among other things, the Company
considers evidence of the availability of permanent financing or a takeout
commitment to the borrower, the reputation of the borrower and his or her
financial condition, the amount of the borrower's equity in the project, an
independent appraisal and review of cost estimates, pre-construction sale and
leasing information, and cash flow projections of the borrower. The Company sets
a limit for the amount of speculative construction loans each builder may have
outstanding from the Company. As applications are received from builders for
such loans, their total inventory of speculative loans (from both the Company
and other lenders) is evaluated in terms of both the dollars outstanding and the
turnover rate the builder has experienced on speculative homes built. If judged
to be excessive, the loan is denied.

         COMMERCIAL LOANS. The Company's commercial lending includes loans to
smaller business ventures, credit lines for working capital and short-term
seasonal or inventory financing, as well as occasional letters of credit.
Commercial borrowers typically secure their loans with assets of the business as
well as personal guaranties of their principals, often secured by second
mortgages on their residences. The Company has made a significant amount of
commercial loans which are classified as real estate loans because their
security is improved commercial property, the purchase or improvement of which
is often financed with the loan proceeds. Risks associated with these loans can
be significant. Risks include, but are not limited to, fraud, bankruptcy,
economic downturn, deteriorated or non-existing collateral, and changes in
interest rates.

         The Company sells participation interests in loans to other lenders
when a loan exceeds the Company's legal lending limits or in other cases,
typically the secured portion of a Small Business Administration ("SBA")
guaranteed loan, when the Company deems sale appropriate. Risks associated with
SBA loans include, but are not limited to, credit risk (for example, fraud,
bankruptcy, economic downturn, deteriorated or non-existing collateral and
changes in interest rates) and operational risks (for example, failure of the
Company to adhere to SBA funding and servicing requirements in order to secure
and maintain the SBA guarantees and servicing rights).

         CONSUMER AND OTHER LOANS. Federal regulations limit the secured and
unsecured consumer loans made by First Citizens Bank-Newnan, as a federal thrift
institution, to 30% of the institution's assets. In addition, a federal thrift
institution has lending authority above the 30% category for certain consumer
loans, such as home equity loans, property improvement loans, mobile home loans
and loans secured by savings accounts. These percentage-of-assets limitations do
not apply to loans made by First Citizens Bank of Georgia. The consumer loans
granted by the Company include loans on automobiles, and other consumer goods,
as well as education loans, and loans secured by savings accounts. The Company
generally limits the loan-to-value ratios on its secured consumer loans to 80%.
The Company has originated second mortgage loans for home improvement and other
purposes. These loans generally have a 15 year amortization and are renegotiable
in five years or have a seven year term with a fixed rate of interest. The
Company limits the loan-to-value ratios on its second mortgage loans to 80%. As
of March 31, 1999, consumer loans (which include second mortgage loans and home
improvement loans) and other secured consumer loans amounted to approximately
7% of the Company's total loan portfolio. The Company believes that the
shorter term and the normally higher interest rates available on these types of
loans have been helpful in maintaining a profitable spread between the Company's
average loan yield and its cost of funds.


                                       4


<PAGE>


         LOAN PURCHASES AND SALES. The Company has engaged in selling certain
loans it has originated in the secondary market. Such loans sold are generally
fixed-rate, long term mortgage loans. These sales, which are without recourse,
have been made to the Federal Home Loan Mortgage Corporation and the Federal
National Mortgage Association, both of which are quasi-governmental agencies
that purchase residential mortgage loans from federally insured financial
institutions and certain other lenders. in connection with such sales, the
Company may retain the servicing of the loans (i.e., collection of principal and
interest payments), for which it generally receives a fee payable monthly based
on the margin between the stated rates of the underlying loans and the rates
paid to the investors in the loans. Additionally, the Company sells loans to
other investors on a servicing-released basis in which an additional fee is paid
by the investor for the transfer of the servicing rights. During the year ended
March 31, 1999, the Company sold $87.6 million of loans as compared to $69.8
million during the comparable period in 1998.

         The sale of loans reduces the Company's risk to an increase in the
interest rates it pays for funds while holding long term, fixed-rate loans in
its portfolio and allows the Company to continue to make loans during periods
when deposit flows decline or funds are not otherwise available for lending
purposes.

         LOAN ORIGINATION AND OTHER FEES. In addition to interest earned on
loans, the Company receives loan origination fees or "points" for originating
loans. Loan points are a percentage of the principal amount of the mortgage loan
which are charged to the borrower for creation of the loan. To the extent that
loans are originated or acquired for the portfolio, generally accepted
accounting principles (`GAAP') limit immediate recognition of loan origination
or acquisition fees as revenues and requires that such income (net of certain
loan origination or acquisition costs) be deferred and amortized as an
adjustment of yield over the life of the loan using a method which approximates
the level yield method. Any deferred fees may be recognized immediately when the
related loan is sold.

         The Company's loan origination fees are generally 1% to 1-1/2% on
conventional residential mortgages and 1% to 2% for commercial real estate
loans. The total amount of deferred loan fees at March 31, 1999, was
$781,000.

         The Company also receives other fees and charges relating to existing
loans, which include prepayment penalties, late charges, and fees collected in
connection with a change in borrower or other loan modifications.

         PROBLEM ASSETS AND THEIR CLASSIFICATION.  [INFORMATION WITH RESPECT TO
THE COMPANY'S NON-PERFORMING ASSETS AT MARCH 31, 1999, 1998, 1997, 1996 AND 1995
TO BE INSERTED]

The following table presents at the dates indicated the aggregate of
nonperforming loans for the following categories:
<TABLE>
<CAPTION>
                                                                                       March 31,
                                                                                 (Dollars in Thousands)

                                                                 1999        1998       1997         1996         1995
                                                              ----------- ----------- ---------- ------------- ------------
<S>                                                           <C>         <C>          <C>         <C>         <C>
Loans accounted for on a nonaccrual basis                         $   619 $    2,886    $  2,796    $      713  $       872
Loans contractually past due ninety days or more as
   to interest or principal payments and still accruing                28        303          55           -            -
Loans, the terms of which have been renegotiated to
   provide a reduction or deferral of interest or
   principal because of deterioration in the financial
   position of the borrower (included above)                          613        894         -             -            -
Loans now current about which there are serious
   doubts as to the ability of the borrower to comply
   with present loan repayment terms.                                 -           -          -             -            -
</TABLE>

The reduction in interest income associated with nonaccrual loans as of March
31, 1999 is as follows:

                                                                (Dollars in
                                                                 Thousands)
                                                                ------------
      Interest income that would have been recorded on
         nonaccrual loans under original terms                  $      55
      Interest income that was recorded on nonaccrual loans            39
         Reduction in interest income                           $      16

Management considers all nonaccrual loans to be impaired. Loans past due greater
than ninety days and still accruing represents those loans which have adequate
collateral values, therefore minimizing the risk of loss of principal or
interest.

In the opinion of management, any loans classified by regulatory authorities as
doubtful, substandard, or special mention that have not been disclosed above do
not (1) represent or result from trends or uncertainties which management
reasonably expects will materially impact future operating results, liquidity,
or capital resources, or (2) represent material credits about which management
is aware of any information which causes management to have serious doubts as to
the ability of such borrowers to comply with the loan repayment terms. In the
event of non-performance by the borrower, these loans have collateral pledged
which would prevent the recognition of substantial losses. Any loans classified
by regulatory authorities as loss have been charged off.
<PAGE>

COMMITMENTS AND LINES OF CREDIT

In the ordinary course of business, the subsidiary Banks have granted
commitments to extend credit and standby letters of credit to approved
customers. Generally, these commitments to extend credit have been granted on a
temporary basis for seasonal or inventory requirements and have been approved by
the Banks' Board of Directors. These commitments are recorded in the financial
statements as they are funded. Commitments generally have fixed expiration dates
or other termination clauses and may require payment of a fee. Since many of the
commitment amounts expire without being drawn upon, the total commitment amounts
do not necessarily represent future cash requirements.

Following is a summary of the commitments outstanding at March 31, 1999, 1998,
and 1997.
<TABLE>
<CAPTION>
                                                1999               1998                 1997
                                           ----------------   ----------------    -----------------
<S>                                         <C>                 <C>                <C>
Unfunded mortgage loan commitments          $    7,283,000      $  14,786,000      $    17,794,000
Residential construction and commercial
   loan commitments                             49,320,000         25,825,000           26,702,846
Other commitments to extend credit              35,208,000         44,470,976           32,928,825
Standby letters of credit                        1,286,601          1,394,031            1,539,000
                                           ----------------   ----------------    -----------------
                                            $   93,097,601      $  86,476,007      $    78,964,671
                                           ================   ================    =================
</TABLE>

The following table summarizes the allowance for loan losses for each year.

<TABLE>
<CAPTION>
                                                                               MARCH 31,
                                                   1999             1998           1997           1996           1995
                                             -----------------  -------------- -------------- -------------- --------------
<S>                                            <C>                <C>           <C>             <C>            <C>
Average amount of loans outstanding            $      282,130     $   262,504   $    173,544    $   132,641    $   123,420
                                             =================  ============== ============== ============== ==============
Balance of allowance for loan
   losses at beginning of year                 $        3,852     $     3,739   $      1,371    $     1,435    $     1,315
                                             =================  ============== ============== ============== ==============
Charge-offs:
   Real estate                                             (5)           (101)           (38)           (54)            -
   Consumer                                              (281)            (56)           (33)           (38)           (37)
   Commercial                                            (367)           (253)           (76)            -              -
                                             -----------------  -------------- -------------- -------------- --------------
                                                         (653)           (410)          (147)           (92)           (37)
                                             -----------------  -------------- -------------- -------------- --------------
Recoveries:
   Real estate                                             90             155              3              4             -
   Consumer                                                39              19              2             14             49
   Commercial                                              70             114              -             -              -
                                             -----------------  -------------- -------------- -------------- --------------
                                                          199             288              5             18             49
                                             -----------------  -------------- -------------- -------------- --------------
Net (charge-offs) recoveries                             (454)           (122)          (142)           (74)            12
                                             -----------------  -------------- -------------- -------------- --------------
Additions to the allowance for loan losses:
  Reserves acquired in acquisitions                         -               -          2,325             -              -
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
<S>                                                     <C>               <C>            <C>             <C>           <C>
  Additions to allowance charged to
     operations                                         1,614             235            185             10            108
                                             -----------------  -------------- -------------- -------------- --------------
                                                        1,614             235          2,510             10            108
                                             -----------------  -------------- -------------- -------------- --------------
Balance of allowance for loan
   losses at end of year                       $        5,012     $     3,852   $      3,739    $     1,371    $     1,435
                                             =================  ============== ============== ============== ==============
Ratio of net loan (charge-offs) recoveries
   during the year to average loans
   outstanding during the year                          (0.16)%         (0.05)%        (0.08)%        (0.06)%         0.01%
</TABLE>

The following table summarizes the allocation of the allowance for loan losses
to types of loans as of the indicated dates.
<TABLE>
<CAPTION>
                                                        Year Ended March 31,
                                                       (Dollars in Thousands)

                                1999                             1998                             1997
                  ---------------------------------- ------------------------------  -------------------------------
                                      Percent of                     Percent of                       Percent of
                                     Loans in Each                  Loans in Each                   Loans in Each
                                      Category To                    Category To                     Category To
                      Amount          Total Loans       Amount       Total Loans         Amount      Total Loans
                  ----------------  ---------------- ------------- ----------------  -------------  ----------------
<S>               <C>                <C>             <C>             <C>             <C>             <C>
Commercial        $         2,181            18.47%  $      1,789           16.60%   $       1,531           10.30%
Real estate                 2,193             72.14         1,037            75.23           1,219            85.10
Consumer                      638              9.39         1,026             8.17             989             4.60
                  ----------------  ---------------- ------------- ----------------  -------------------------------
                   $        5,012           100.00%  $      3,852          100.00%    $      3,739          100.00%
                  ================  ================ ============= ================  =============  ================
</TABLE>

         As of March 31, 1999 the allowance for losses on loans was 1.61% of
outstanding loans.

         Over the years, there has been a greater level of scrutiny by
regulatory authorities of the loan portfolios of financial institutions,
undertaken as a part of the examination of the institutions by the FDIC, OTS, or
other federal or state regulators. Results of examinations indicate that these
regulators may be applying more conservative criteria in evaluating real estate
values, requiring

                                       5

<PAGE>

significantly increased provisions for probable loan losses. While the Company
believes it has established its existing allowance for loan losses in accordance
with generally accepted accounting principles at March 31, 1999, there can be no
assurance that regulators, when reviewing the Company's loan portfolio in the
future, will not request the Company to increase its allowance for loan losses,
thereby adversely affecting its earnings.

INVESTMENT ACTIVITIES

         Interest income from cash deposits and securities generally provides
the second largest source of income for the Company after interest payments on
loans. At March 31, 1999, the Company's securities portfolio consisted primarily
of U.S. Government and agency securities, state and municipal securities,
mortgage-backed securities, and equity securities (primarily stock in the FHLB
of Atlanta).

         The Company is required under federal regulations to maintain a minimum
amount of liquid assets which may be invested in specified short term securities
and is also permitted to make certain other investments.

LIQUIDITY

Liquidity represents the ability to meet the needs of customers desiring to
withdraw funds from deposit accounts to borrow funds to meet their credit needs.
Each of the Company's subsidiary institutions manage their liquidity needs in
such a way that the needs of depositors and borrowers are met in a timely basis
so that the operations of the Banks are not interrupted. Sources of liquidity
available to meet these needs include cash on deposit, federal funds, securities
available for sale, maturities of securities, and principal payments received on
loans. Growth in the banks' deposit bases provide additional sources as does
access to borrowed funds through relationships with correspondent banks and
advances from the Federal Home Loan Bank of Atlanta ("FHLBA"). Liquidity needs
at individual banks can also be met through loan participations sold to
affiliate banks.

At March 31, 1999 the liquidity position of all the subsidiary banks was
considered adequate and within guidelines set forth in the banks' liquidity
policies. Furthermore, the amount of unused line of credit from FHLBA totaled
$49.9 million.

The Parent Company also requires cash for operating expenses and dividends to
stockholders. The primary source of funds for these items is the dividend income
from the subsidiary banks. Management believes that the ability of its
subsidiaries to pay such dividends is adequate to meet its cash needs.


DEPOSIT ACTIVITIES AND OTHER SOURCES OF FUNDS

         Deposits are the major source of the Company's funds for lending and
other investment purposes. In addition to deposits, the Company derives funds
from loan principal repayments, interest payments, and advances from the FHLB of
Atlanta. Loan repayments and interest payments are a relatively stable source of
funds, while deposit inflows and outflows are significantly influenced by
general interest rates and money market conditions. Borrowings, including
repurchase agreements, may be used on a short term basis to compensate for
reductions in the availability of funds from other sources. They may also be
used on a longer term basis for general business purposes.

DEPOSITS

Average amount of deposits and average rates paid thereon, classified as to
noninterest-bearing demand deposits, interest-bearing and savings deposits and
time deposits, for the periods indicated are presented below. (1)
<TABLE>
<CAPTION>
                                                                         Year Ended March 31,
                                                     1999                         1998                       1997
                                          ---------------------------- --------------------------- --------------------------
                                              Amount         Rate         Amount         Rate         Amount        Rate
                                          --------------- ------------ -------------- ------------ ------------- ------------
                                                                        (Dollars in Thousands)
<S>                                               <C>           <C>           <C>           <C>          <C>           <C>
Noninterest-bearing demand deposits       $       43,272         -  %  $      41,197         -  %   $    20,420         -  %
Interest-bearing demand and savings
   deposits                                       93,997        3.05%         79,204        2.94%        54,683        2.85%
Time deposits                                    195,768        5.79%        165,759        5.77%       103,765        5.67%
                                          ---------------              --------------              -------------
                                          $      333,037                $    286,160                 $  178,868
                                          ===============              ==============              =============
</TABLE>

      (1) Average balances were determined using monthly average balances during
the year for each category.

The amounts of time certificates of deposit issued in amounts of $100,000 or
more as of March 31, 1999 are shown below by category, which is based on time
remaining until maturity of (1) three months or less, (2) over three through six
months, (3) over six through twelve months, and (4) over twelve months.

                                                                 (Dollars in
                                                                  Thousands)
                                                                  ----------
                    Three months or less                     $         7,118
                    Over three months through six months               7,586
                    Over six months through twelve months             14,258
                    Over twelve months                                14,159
                                                                      ------
                                                             $        43,121
                                                                      ======


         BORROWINGS. Deposit accounts are the primary source of funds of the
Company's lending and investment activities and for its other general business
purposes. However, during periods when the supply of lendable funds cannot meet
the demand for such loans, the FHLB System seeks to provide a portion of the
funds necessary through loans (advances) to its members. The FHLB of Atlanta has
served as the primary borrowing source for First Citizens Bank-Newnan and First
Citizen Bank of Georgia. Advances are made on a secured basis.

         The FHLB functions as a central reserve bank providing credit for
member financial institutions. As members, First Citizens Bank-Newnan and First
Citizens Bank of Georgia are required to own capital stock in the FHLB of
Atlanta and are authorized to apply for advances on the security of such stock
and certain of their home mortgages and other assets (principally, securities
which are obligations of, or guaranteed by, the United States) provided certain
standards related to creditworthiness have been met. Advances are made pursuant
to several different programs. Each credit program has its own interest rate and
range of maturities. Depending on the program, limitations on the amount of
advances are based either on a fixed percentage of an institution's net worth or
on the FHLB's assessment of the institution's creditworthiness.

                                       6

<PAGE>
SHORT TERM BORROWINGS

The following information is presented with respect to the Company's short term
borrowings as of and for the year ended March 31:
<TABLE>
<CAPTION>
                                                              Dollars in Thousands
                                            ----------------------------------------------------------
                                                   1999                1998                1997
                                            -------------------   ----------------   -----------------
<S>                                           <C>                   <C>               <C>
Balance at end of period                      $          1,400      $           -     $        10,058
   Weighted average rate                                 5.25%                  -               6.82%

Average amount outstanding during period      $             90      $       6,695     $         3,800
   Weighted average rate                                 4.21%              5.59%               5.59%

Maximum amount outstanding during period      $          2,300      $      10,058     $        10,058
</TABLE>

YIELDS EARNED AND RATES PAID

         The earnings of the Company depend significantly upon the difference
between the income it receives from its loan and investment portfolios and its
cost of money, consisting of the interest paid on deposit accounts and
borrowings, if any.


NET INTEREST INCOME

TABLE 1:  AVERAGE BALANCES, INTEREST INCOME, AND INTEREST EXPENSE

The following table contains condensed average balance sheets for the periods
indicated. In addition, the amount of the Company's interest income and interest
expense for each category of interest-earning assets and interest-bearing
liabilities and the related average interest rates, net interest spread and net
yield on average interest earning assets are included.
<TABLE>
<CAPTION>

TABLE 1                                    ANALYSIS OF NET INTEREST INCOME
                                            FOR THE YEARS ENDED MARCH 31,

                                              1999                          1998                    1997
                                              ----                          ----                    ----
                                                        Average                         Average                        Average
                               Average     Income/      Yield/     Average    Income/   Yield/     Average   Income/   Yield/
                             Balance(9)    Expense       Rate    Balance(9)   Expense    Rate    Balance(9)   Expense   Rate
                             ---------     -------       ---     ----------   -------    ----    ----------  --------   -----
                                                                        (Dollars in Thousands)
<S>                            <C>         <C>           <C>      <C>         <C>         <C>      <C>         <C>       <C>
Interest Earning Assets:
Loans (1)(2)(7)                $282,130    $26,198       9.29%    $262,504    $24,924     9.49%    $173,544    $15,985   9.21%
Federal funds sold(2)            15,859        862       5.44%       9,246        552     5.97%       2,909        157   5.40%
Interest bearing deposits(2)     19,954      1,064       5.33%       6,277        307     4.89%       4,038        212   5.25%
Nontaxable securities(2)          2,829        128       4.52%       2,693        141     5.24%       1,693         89   5.26%
Taxable securities(2)(8)         34,428      2,316       6.73%      32,830      1,982     6.04%      17,382      1,089   6.27%
                               --------    -------                --------    -------              --------    -------
     Total interest earning
         assets                $355,200    $30,568       8.61%    $313,550    $27,906     8.90%    $199,566    $17,532   8.79%
                                           -------                            -------                          -------

Cash and due from banks(3)       14,271                             11,530                            7,309
Allowance for loan losses(3)     (4,210)                            (3,913)                          (2,200)
Other assets(3)                  26,533                             21,895                           11,656
                               ---------                           -------                         --------
     Total assets              $391,794                           $343,062                         $216,331
                                =======                           ========                         ========
Interest Bearing Liabilities:
Interest bearing demand
   and savings(2)               $93,997     $2,864       3.05%   $  79,204     $2,331     2.94%     $54,683     $1,561   2.85%
Time deposits(2)                195,768     11,344       5.79%     165,760      9,567     5.77%     103,765      5,882   5.67%
FHLB advances and
   other borrowings(3)            9,649        635       6.58%      15,673      1,077     6.87%      12,003        692   5.77%
                               ---------                          --------                           ------        ---
     Total interest bearing
        liabilities            $299,414    $14,843       4.96%    $260,637    $12,975     4.98%   $170,451      $8,135   4.77%
                                           -------                             -------                          -------

Noninterest-bearing
   deposits(2)(6)                43,272                             41,197                           20,420
Other liabilities(3)              9,129                              7,952                            2,995
Stockholders equity(3)           39,979                             33,276                           22,465
                               ---------                          --------                         --------
     Total liabilities and
        stockholders' equity   $391,794                           $343,062                         $216,331
                                =======                           ========                         ========
Interest rate spread(4)                                  3.65%                            3.92%                          4.02%
                                                         ====                             ====                           ====
Net interest income/margin(5)              $15,725       4.43%                $14,931     4.76%                 $9,397   4.71%
                                           =======     ======                 =======     ====                  ======   ====
</TABLE>

------------
(1)  Includes loans held for sale and nonaccrual loans.
(2)  Daily average.
(3)  Monthly average.
(4)  Interest rate spread is the weighted average yield on interest earning
     assets minus average rate on interest bearing liabilities.
(5)  Net interest margin is net interest income divided by interest earning
     assets. (6) Noninterest bearing deposits include official checks
     outstanding.
(7)  Interest income from loans includes total fee income of approximately
     $797,000, $723,000, and $668,000 for the years ended March 31, 1999, 1998,
     and 1997, respectively.
(8)  Yields on nontaxable securities have not been computed on a tax equivalent
     basis.
(9)  The above information is prepared on a consolidated basis in which all
     loans and accounts with subsidiaries have been eliminated.


<PAGE>

TABLE 2 - RATE AND VOLUME ANALYSIS

The following table describes the extent to which changes in interest rates and
changes in volume of interest-earning assets and interest-bearing liabilities
have affected the Company's interest income and expense during the year
indicated. For each category of interest-earning assets and interest-bearing
liabilities, information is provided on changes attributable to (1) change in
volume (change in volume multiplied by previous year rate); (2) change in rate
(change in rate multiplied by previous year volume); and a combination of change
in rate and change in volume. The changes in interest income and interest
expense attributable to both volume and rate have been allocated proportionately
to the change due to volume and the change due to rate.
<TABLE>
<CAPTION>


                                                              ANALYSIS OF CHANGES IN NET INTEREST INCOME
                                                                     FOR THE YEARS ENDED MARCH 31,
                                                                            (In Thousands)

                                                   1999 Compared to 1998                       1998 Compared to 1997
                                                    Increase (decrease)                         Increase (decrease)
                                                     due to change in                            due to change in
                                            -----------------------------------------------------------------------------
                                            Rate          Volume            Total           Rate        Volume      Total
                                            ----          -------           -----           ----        ------      -----
<S>                                          <C>           <C>             <C>           <C>             <C>      <C>
Interest Income:
Loans                                        $(539)        $1,813          $  1,274      $   501         $8,438   $  8,939
Federal funds sold                             (53)           363               310           19            376        395
Interest bearing deposits                       30            727               757          (14)           109         95
Nontaxable securities                          (20)             7               (13)          (1)            53         52
Taxable securities                             234            100               334          (38)           931        893
                                              -----        ------            ------      -------         ------    -------
     Total interest income                   $(348)        $3,010            $2,662      $   467         $9,907    $10,374
                                              -----        ------            ------      -------         ------    -------

Interest Expense:
Interest bearing demand and savings         $   89        $   444         $     533      $    50        $   720   $    770
Time deposits                                   33          1,744             1,777          106          3,579      3,685
FHLB advances and other borrowings             (43)          (399)             (442)         148            237        385
                                              -----        ------            ------      -------         ------    -------
     Total interest expense                 $   79         $1,789          $  1,868       $  304         $4,536    $ 4,840
                                              -----        ------            ------      -------         ------    -------
     Net interest income                     $(427)        $1,221          $    794       $  163         $5,371    $ 5,534
                                              =====        ======            ======      =======         ======    =======
</TABLE>

SUBSIDIARY ACTIVITY

         First Citizens Bank-Newnan is permitted to invest an amount equal to 2%
of its assets in its service corporations, with an additional investment of 1%
of assets where such investment serves primarily community, inner-city and
community development purposes. In addition, federal savings institutions
meeting regulatory capital requirements and certain scheduled items tests may
invest up to 50% of their current risk-based capital in conforming first
mortgage loans to service corporations. Under such limitations, at March 31,
1999, First Citizens Bank-Newnan was authorized to invest up to approximately
$10.8 million in the stock of, or loans to, service corporations. The Company's
investments in its subsidiaries continues to be less than the limit permitted by
OTS regulations.

         Newnan has one wholly owned service corporation, Newnan Financial
Services, Inc. Newnan Financial Services owns Jefferson Ventures, Inc., which
consists of the White Oak residential development. White Oak consists of
property located in Coweta County that was acquired in July 1984. This property
originally included approximately 3,500 acres, 150 lots, a 53,000 square foot
building, marketable timber on approximately 1700 acres of the 3500 acres, a
swimming pool and tennis courts. This area is a planned housing community with a
golf course (36 holes), swimming pool, tennis courts and lakes. Newnan has
entered into a contract for the sale of this property.

COMPETITION

         The Company faces strong competition in the attraction of deposits (its
primary source of lendable funds) and in the origination of loans. Its most
direct competition for deposits and loans has historically come from other
financial institutions in the southern Metropolitan Atlanta area. Particularly
in times of high interest rates, the Company faces additional significant
competition for inventors' funds from short-term money market securities and
other corporate and government securities. The Company's competition for loans
comes principally from other financial institutions, mortgage banking companies
and other providers of financial services.

         The Company competes for loans principally through the interest rates
and loan fees it charges and the efficiency and quality of the services it
provides borrowers, real estate brokers, and

                                       7

<PAGE>

home builders. It competes for deposits by offering depositors and wide variety
of accounts, convenient office locations, tax-deferred retirement programs, and
other miscellaneous services.

PERSONNEL

         As of March 31, 1999, the Company had 162 full-time equivalent
employees. The employees are not represented by a collective bargaining
agreement. The Company believes its employee relations are good.

FORWARD LOOKING STATEMENTS

         This Annual Report on Form 10-K, other periodic reports filed by the
Company under the Securities Exchange Act of 1934, as amended, and any other
written or oral statements made by or on behalf of the Company may include
forward looking statements which reflect the Company's current views with
respect to future events and financial performance. Such forward looking
statements are based on general assumptions and are subject to various risks,
uncertainties, and other factors that may cause actual results to differ
materially from the views, beliefs, and projections expressed in such
statements. These risks, uncertainties and other factors include, but are not
limited to:

    (a)           Possible changes in economic and business conditions that may
                  affect the prevailing interest rates, the prevailing rates of
                  inflation, or the amount of growth, stagnation, or recession
                  in the global, U.S., and southeastern U.S. economies, the
                  value of investments, collectability of loans, and the
                  profitability of business entities;

    (b)           Possible changes in monetary and fiscal policies, laws, and
                  regulations, and other activities of governments, agencies,
                  and similar organizations;

    (c)           The effects of easing of restrictions on participants in the
                  financial services industry, such as banks, securities brokers
                  and dealers, investment companies, and finance companies, and
                  attendant changes in patterns and effects of competition in
                  the financial services industry;

    (d)           The cost and other effects of legal and administrative cases
                  and proceedings, claims, settlements, and judgments;

    (e)           The ability of the Company to achieve the earnings
                  expectations related to the acquired operations of
                  recently-completed and pending acquisitions. which depends on
                  a variety of factors, including (i) the ability of the Company
                  to achieve the anticipated cost savings and revenue
                  enhancements with respect to the acquired operations, (ii) the
                  assimilation of the acquired operations to the Company's
                  corporate culture, including the ability to instill the
                  Company's credit practices and efficient approach to the
                  acquired operations, (iii) the continued growth of the markets
                  in which the company operates consistent with recent
                  historical experience, (iv) the absence of material
                  contingencies related to the acquired operations, including
                  asset quality and litigation contingencies, and (v) the
                  Company's ability to expand into new markets and to maintain
                  profit margins in the face of pricing pressures.


                                       8

<PAGE>


         The words "believe", "expect", "anticipate", "project", and similar
expressions signify forward looking statements. Readers are cautioned not to
place undue reliance on any forward looking statements made by or on behalf of
the Company. Any such statements speaks only as of the date the statement was
made. The Company undertakes no obligation to update or revise any forward
looking statements.

SUPERVISION AND REGULATION

         The following discussion sets forth the material elements of the
regulatory framework applicable to bank holding companies and their bank and
thrift subsidiaries and provides certain specific information related to the
Company.

         GENERAL

         The Company is a bank holding company registered with the Board of
Governors of the Federal Reserve System (the "Federal Reserve") under the BHC
Act. As such, the Company and its non-bank subsidiaries are subject to the
supervision, examination, and reporting requirements of the BHC Act and the
regulations of the Federal Reserve. In addition, the Company's thrift is subject
to the regulation, supervision, examination, and reporting requirements of the
OTS.

         The BHC Act requires every bank holding company to obtain the prior
approval of the Federal Reserve before: (a) it may acquire direct or indirect
ownership or control of any voting shares of any bank if, after such
acquisition, the bank holding company will directly or indirectly own or control
more than 5% of the voting shares of the bank; (b) it or any of its
subsidiaries, other than a bank, may acquire all or substantially all of the
assets of any bank; or (c) it may merge or consolidate with any other bank
holding company.

         The BHC Act further provides that the Federal Reserve may not approve
any transaction that would result in a monopoly or would be in furtherance of
any combination or conspiracy to monopolize or attempt to monopolize the
business of banking in any section of the United States, or the effect of which
may be substantially to lessen competition or to tend to create a monopoly in
any section of the country, or that in any other manner would be in restraint of
trade, unless the anticompetitive effects of the proposed transaction are
clearly outweighed by the public interest in meeting the convenience and needs
of the community to be served. The Federal Reserve is also required to consider
the financial and managerial resources and future prospects of the bank holding
companies and banks concerned and the convenience and needs of the community to
be served. Consideration of financial resources generally focuses on capital
adequacy and consideration of convenience and needs issues including the
parties' performance under the Community Reinvestment Act of 1977 (the "CRA"),
both of which are discussed below.

         The BHC Act, as amended by the interstate banking provisions of the
Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the
"Interstate Banking Act"), which became effective on September 29, 1995,
repealed the prior statutory restrictions on interstate acquisitions of banks by
bank holding companies, such that the Company, and any other bank holding
company located in Georgia may now acquire a bank located in any other state,
and any bank holding company located outside Georgia may lawfully acquire any
Georgia-based bank, regardless of state law to the contrary, in either case
subject to certain deposit-percentage, aging requirements, and other

                                       9

<PAGE>


restrictions. The Interstate Banking Act also generally provides that, as of
June 1, 1997, national and state-chartered banks may branch interstate through
acquisitions of banks in other states. By adopting legislation prior to that
date, a state had the ability either to "opt in" and accelerate the date after
which interstate branching is permissible or "opt out" and prohibit interstate
branching altogether.

         In response to the Interstate Banking Act, the Georgia General Assembly
adopted the Georgia Interstate Banking Act, which was effective on July 1, 1995.
The Georgia Interstate Banking Act provides that (a) interstate acquisitions by
institutions located in Georgia will be permitted in states that also allow
national interstate acquisitions and (b) interstate acquisitions of institutions
located in Georgia will be permitted by institutions in states that allow
national interstate acquisitions.

    Additionally, on January 26, 1996, the Georgia General Assembly adopted the
Georgia Interstate Branching Act, which permits Georgia-based banks and bank
holding companies owning or acquiring banks outside of Georgia and all
non-Georgia banks and bank holding companies owning or acquiring banks in
Georgia to merge any lawfully acquired bank into an interstate branch network.
The Georgia Interstate Branching Act also allows banks to establish de novo
branches on a limited basis. As of July 1, 1998, the number of de novo branches
that may be established is no longer limited.

         The BHC Act generally prohibits the Company from engaging in activities
other than banking or managing or controlling banks or other permissible
subsidiaries and from acquiring or retaining direct or indirect control of any
company engaged in any activities other than those activities determined by the
Federal Reserve to be so closely related to banking or managing or controlling
banks as to be a proper incident thereto. In determining whether a particular
activity is permissible, the Federal Reserve must consider whether the
performance of such an activity reasonably can be expected to produce benefits
to the public, such as greater convenience, increased competition, or gains in
efficiency, that outweigh possible adverse effects, such as undue concentration
of resources, decreased or unfair competition, conflicts of interest, or unsound
banking practices. For example, factoring accounts receivable, acquiring or
servicing loans, leasing personal property, conducting discount securities
brokerage activities, performing certain data processing services, acting as
agent or broker in selling credit life insurance and certain other types of
insurance in connection with credit transactions, and performing certain
insurance underwriting activities all have been determined by the Federal
Reserve to be permissible activities of bank holding companies. The BHC Act does
not place territorial limitations on permissible non-banking activities of bank
holding companies. Despite prior approval, the Federal Reserve has the power to
order a holding company or its subsidiaries to terminate any activity or to
terminate its ownership or control of any subsidiary when it has reasonable
cause to believe that continuation of such activity or such ownership or control
constitutes a serious risk to the financial safety, soundness, or stability of
any bank subsidiary of that bank holding company.

         The bank and thrift subsidiaries of the Company are members of the
FDIC, and as such, their deposits are insured by the FDIC to the maximum extent
provided by law. Such subsidiaries are also subject to numerous state and
federal statutes and regulations that affect their businesses, activities, and
operations, and they are supervised and examined by one or more state or federal
bank regulatory agencies.

                                       10

<PAGE>


         All of the Company's depository institution subsidiaries that are
state-chartered banks and are not members of the Federal Reserve System are
subject to supervision and examination by the FDIC and the Georgia Department of
Banking and Finance. The Company's subsidiary that is a federal savings bank is
subject to regulation, supervision, and examination by the OTS and the FDIC. The
federal banking regulator for each of the Company's subsidiaries, as well as the
Georgia Department of Banking and Finance for each of the subsidiary banks that
is a state chartered bank, regularly examines the operations of the subsidiary
banks and is given authority to approve or disapprove mergers, consolidations,
the establishment of branches, and similar corporate actions. The federal and
state banking regulators also have the power to prevent the continuance or
development of unsafe or unsound banking practices or other violations of law.

PAYMENT OF DIVIDENDS

         The Company is a legal entity separate and distinct from its
subsidiaries. The principal sources of cash flow of the Company, including cash
flow to pay dividends to its shareholders, are dividends by its bank and thrift
subsidiaries. There are statutory and regulatory limitations on the payment of
dividends by such subsidiaries to the Company as well as by the Company to its
shareholders.

         As to the payment of dividends, all of the Company's depository
institution subsidiaries that are state nonmember banks are subject to the laws
and regulations of the state of Georgia and to the regulations of the FDIC. The
Company's depository institution subsidiary that is a federal savings bank is
subject to the OTS' capital distributions regulation.

         If, in the opinion of the applicable federal banking regulator, a
depository institution under its jurisdiction is engaged in or is about to
engage in an unsafe or unsound practice (which, depending on the financial
condition of the depository institution, could include the payment of
dividends), such authority may require, after notice and hearing, that such
institution cease and desist from such practice. The federal banking agencies
have indicated that paying dividends that deplete a depository institution's
capital base to an inadequate level would be an unsafe and unsound banking
practice. Under the Federal Deposit Insurance Corporation Improvement Act of
1991 ("FDICIA"), a depository institution may not pay any dividend if payment
would cause it to become undercapitalized or if it already is undercapitalized.
See "-- Prompt Corrective Action." Moreover, the federal agencies have issued
policy statements that provide that bank holding companies and insured banks
should generally only pay dividends out of current operating earnings.

         At December 31, 1998, under dividend restrictions imposed under federal
and state laws, the bank and thrift subsidiaries of the Company, without
obtaining governmental approvals, could declare aggregate dividends to the
Company of up to approximately $2,000,000.

         The payment of dividends by the Company and its subsidiaries may also
be affected or limited by other factors, such as the requirement to maintain
adequate capital above regulatory guidelines.

CAPITAL ADEQUACY

                                       11
<PAGE>


          The Company and its depository institution subsidiaries are required
to comply with the capital adequacy standards established by the Federal Reserve
and the appropriate federal banking regulator in the case of its depository
institution subsidiaries. There are two basic measures of capital adequacy for
bank holding companies that have been promulgated by the Federal Reserve: a
risk-based measure and a leverage measure. All applicable capital standards must
be satisfied for a bank holding company to be considered in compliance.

         The risk-based capital standards are designed to make regulatory
capital requirements more sensitive to differences in risk profile among banks
and bank holding companies, to account for off-balance-sheet exposure, and to
minimize disincentives for holding liquid assets. Assets and off-balance-sheet
items are assigned to broad risk categories, each with appropriate weights. The
resulting capital ratios represent capital as a percentage of total
risk-weighted assets and off-balance-sheet items.

         The minimum guideline for the ratio (the "Total Risk-Based Capital
Ratio") of total capital ("Total Capital") to risk-weighted assets (including
certain off-balance-sheet items, such as standby letters of credit) is 8%. At
least half of Total Capital must comprise common stock, minority interests in
the equity accounts of consolidated subsidiaries, noncumulative perpetual
preferred stock, and a limited amount of cumulative perpetual preferred stock,
less goodwill and certain other intangible assets ("Tier 1 Capital"). The
remainder may consist of subordinated debt, other preferred stock, and a limited
amount of loan loss reserves ("Tier 2 Capital").

         In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio (the "Leverage Ratio") of Tier 1 Capital to average assets, less goodwill
and certain other intangible assets, of 3% for bank holding companies that meet
certain specified criteria, including having the highest regulatory rating. All
other bank holding companies generally are required to maintain a Leverage Ratio
of at least 3%, plus an additional cushion of 100 to 200 basis points. The
Company's Leverage Ratio at December 31, 1998 was 8.4%. The guidelines also
provide that bank holding companies experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions substantially
above the minimum supervisory levels without significant reliance on intangible
assets. Furthermore, the Federal Reserve has indicated that it will consider a
"tangible Tier 1 Capital Leverage Ratio" (deducting all intangibles) and other
indicia of capital strength in evaluating proposals for expansion or new
activities.

         The Company's depository institution subsidiaries are subject to
risk-based and leverage capital requirements adopted by their applicable federal
regulators, which are substantially similar to those adopted by the Federal
Reserve for bank holding companies. Such subsidiaries were in compliance with
applicable minimum capital requirements as of December 31, 1998. The Company has
not been advised by any federal banking agency of any specific minimum capital
ratio requirement applicable to it or its subsidiary depository institutions.

         Failure to meet capital guidelines could subject an institution to a
variety of enforcement remedies, including issuance of a capital directive, the
termination of deposit insurance by the FDIC, a prohibition on the taking of
brokered deposits, and certain other restrictions on its business. As described
below, substantial additional restrictions can be imposed upon FDIC-insured
depository institutions that fail to meet applicable capital requirements. See "
- Prompt Corrective Action."


                                       12

<PAGE>


         COMMUNITY REINVESTMENT

         The Company's subsidiaries are subject to the provisions of the CRA.
Under the terms of the CRA, the subsidiaries have a continuing and affirmative
obligation consistent with their safe and sound operation to help meet the
credit needs of their entire communities, including low- and moderate-income
neighborhoods. The CRA does not establish specific lending requirements or
programs for financial institutions nor does it limit an institution's
discretion to develop the types of products and services that it believes are
best suited to its particular community, consistent with the CRA. The CRA
requires each appropriate federal bank regulatory agency, in connection with its
examination of a subsidiary depository institution, to assess such institution's
record in assessing and meeting the credit needs of the community served by that
institution, including low- and moderate-income neighborhoods. The regulatory
agency's assessment of the institution's record is made available to the public.
Further, such assessment is required of any institution which has applied to:
(a) charter a national bank; (b) obtain deposit insurance coverage for a newly
chartered institution; (c) establish a new branch office that will accept
deposits; (d) relocate an office; or (e) merge or consolidate with, or acquire
the assets or assume the liabilities of, a federally regulated financial
institution. In the case of a bank holding company applying for approval to
acquire a bank or other bank holding company, the Federal Reserve will assess
the records of each subsidiary depository institution of the applicant bank
holding company, and such records may be the basis for denying the application.
All of the Company's subsidiary depository institutions received at least a
"satisfactory" CRA rating in their most recent examinations.

         In April 1995, the federal banking agencies adopted amendments revising
their CRA regulations, with a phase-in schedule applicable to various
provisions. Among other things, the amended CRA regulations, implemented on July
1, 1997, substitute for the prior process-based assessment factors a new
evaluation system that rates an institution based on its actual performance in
meeting community needs. In particular, the system focuses on three tests: (a) a
lending test, to evaluate the institution's record of making loans in its
service areas; (b) an investment test, to evaluate the institution's record of
investing in community development projects; and (c) a service test, to evaluate
the institution's delivery of services through its branches, ATM's and other
offices. The amended CRA regulations also clarify how an institution's CRA
performance will be considered in the application process.

         SUPPORT OF SUBSIDIARY INSTITUTIONS

         Under Federal Reserve policy, the Company is expected to act as a
source of financial strength for, and to commit resources to support, each of
its banking subsidiaries. This support may be required at times when, absent
such Federal Reserve policy, the Company may not be inclined to provide it. In
addition, any capital loans by a bank holding company to any of its depository
institution subsidiaries are subordinate in right of payment to deposits and to
certain other indebtedness of such banks. In the event of a bank holding
company's bankruptcy, any commitment by the bank holding company to a federal
bank regulatory agency to maintain the capital of a depository institution
subsidiaries will be assumed by the bankruptcy trustee and entitled to a
priority of payment.

         Under the Federal Deposit Insurance Act ("FDIA"), a depository
institution insured by the FDIC can be held liable for any loss incurred by, or
reasonably expected to be incurred by, the FDIC after August 9, 1989, in
connection with (a) the default of a commonly controlled FDIC-insured


                                       13
<PAGE>



depository institution or (b) any assistance provided by the FDIC to any
commonly controlled FDIC-insured depository institution "in danger of default."
"Default" is defined generally as the appointment of a conservator or receiver,
and "in danger of default" is defined generally as the existence of certain
conditions indicating that a default is likely to occur in the absence of
regulatory assistance. The FDIC's claim for damages is superior to claims of
shareholders of the insured depository institution or its holding company, but
is subordinate to claims of depositors, secured creditors, and holders of
subordinated debt (other than affiliates) of the commonly controlled insured
depository institution. The subsidiary depository institutions of the Company
are subject to these cross-guarantee provisions. As a result, any loss suffered
by the FDIC in respect of these subsidiaries would likely result in assertion of
the cross-guarantee provisions, the assessment of such estimated losses against
the depository institution's banking affiliates, and a potential loss of the
Company's investment in such other subsidiary depository institutions.

         PROMPT CORRECTIVE ACTION

         FDICIA establishes a system of prompt corrective action to resolve the
problems of undercapitalized institutions. Under this system, which became
effective in December 1992, the federal banking regulators are required to
establish five capital categories (well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized, and critically
undercapitalized) and to take certain mandatory supervisory actions, and are
authorized to take other discretionary actions, with respect to institutions in
the three undercapitalized categories, the severity of which will depend upon
the capital category in which the institution is placed. Generally, subject to a
narrow exception, FDICIA requires the regulator to appoint a receiver or
conservator for an institution that is critically undercapitalized. The federal
banking agencies have specified by regulation the relevant capital level for
each category.

         The capital levels established for each of the categories are as
follows:
<TABLE>
<CAPTION>
        <S>                        <C>                   <C>                       <C>               <C>

========================== ==================== ========================= ====================== ===================
                                                Total                     Tier 1 Risk-
Capital Category           Tier 1 Capital       Risk-Based Capital        Based Capital          Other
========================== ==================== ========================= ====================== ===================
                                                                                                 Not subject to a
Well Capitalized           5% or more           10% or more               6% or more             capital directive
========================== -------------------- ------------------------- ---------------------- ===================
Adequately Capitalized     4% or more           8% or more                4% or more                      --
========================== -------------------- ------------------------- ---------------------- ===================
Undercapitalized           Less than 4%         less than 8%              less than 4%                    --
========================== -------------------- ------------------------- ---------------------- ===================
Significantly
Undercapitalized           Less than 3%         less than 6%              less than 3%                    --
========================== ==================== ========================= ====================== ===================
Critically                 2%     or      less
Undercapitalized           tangible equity               --                        --                     --
========================== ==================== ========================= ====================== ===================
</TABLE>

         For purposes of the regulation, the term "tangible equity" includes
core capital elements counted as Tier 1 Capital for purposes of the risk-based
capital standards, plus the amount of outstanding cumulative perpetual preferred
stock (including related surplus), minus all intangible

                                       14


<PAGE>


assets with certain exceptions. A depository institution may be deemed to be in
a capitalization category that is lower than is indicated by its actual capital
position if it receives an unsatisfactory examination rating.

         An institution that is categorized as undercapitalized, significantly
undercapitalized, or critically undercapitalized is required to submit an
acceptable capital restoration plan to its appropriate federal banking agency.
Under FDICIA, a bank holding company must guarantee that a subsidiary depository
institution meets its capital restoration plan, subject to certain limitations.
The obligation of a controlling holding company under FDICIA to fund a capital
restoration plan is limited to the lesser of 5% of an undercapitalized
subsidiary's assets or the amount required to meet regulatory capital
requirements. An undercapitalized institution is also generally prohibited from
increasing its average total assets, making acquisitions, establishing any
branches, or engaging in any new line of business, except in accordance with an
accepted capital restoration plan or with the approval of the FDIC. In addition,
the appropriate federal banking agency is given authority with respect to any
undercapitalized depository institution to take any of the actions it is
required to or may take with respect to a significantly undercapitalized
institution as described below if it determines "that those actions are
necessary to carry out the purpose" of FDICIA.

         At March 31, 1999, the Company's depository institution subsidiaries
had the requisite capital levels to qualify as well capitalized.

         FDIC INSURANCE ASSESSMENTS

         Pursuant to FDICIA, the FDIC adopted a risk-based assessment system for
insured depository institutions that takes into account the risks attributable
to different categories and concentrations of assets and liabilities. The system
assigns an institution to one of three capital categories: (a) well capitalized;
(b) adequately capitalized; and (c) undercapitalized. These three categories are
substantially similar to the prompt corrective action categories described
above, with the "undercapitalized" category including institutions that are
undercapitalized, significantly undercapitalized, and critically
undercapitalized for prompt corrective action purposes. An institution is also
assigned by the FDIC to one of three supervisory subgroups within each capital
group. The supervisory subgroup to which an institution is assigned is based on
a supervisory evaluation provided to the FDIC by the institution's primary
federal regulator and information which the FDIC determines to be relevant to
the institution's financial condition and the risk posed to the deposit
insurance funds (which may include, if applicable, information provided by the
institution's state supervisor). An institution's insurance assessment rate is
then determined based on the capital category and supervisory category to which
it is assigned. Under the risk-based assessment system, there are nine
assessment risk classifications (i.e., combinations of capital groups and
supervisory subgroups) to which different assessment rates are applied.

         Pursuant to the Deposit Insurance Funds Act of 1996, the FDIC
implemented a special one-time assessment of approximately 65.7 basis points
(0.657%) on a depository institution's SAIF-insured deposits held as of March
31, 1995 (or approximately 52.6 basis points on SAIF deposits acquired by banks
in certain qualifying transactions) and adopted revisions to the assessment rate
schedules that would generally eliminate the disparity between assessment rates
applicable to the deposits insured by the Bank Insurance Fund ("BIF") and the
SAIF. The revisions in the assessment rate schedules reduced assessment rates on
SAIF-insured deposits and would generally equalize BIF

                                       15
<PAGE>

and SAIF assessment rates by January, 2000. The Company anticipates that the net
effect of the decrease in the premium assessment rate on SAIF deposits will
result in a reduction in its total deposit insurance premium assessments through
1999 as compared to years prior to 1997, assuming no further changes in
announced premium assessment rates.

         Under the FDIA, insurance of deposits may be terminated by the FDIC
upon a finding that the institution has engaged in unsafe and unsound practices,
is in an unsafe or unsound condition to continue operations, or has violated any
applicable law, regulation, rule, order, or condition imposed by the FDIC.

         PROPOSED LEGISLATION AND REGULATORY ACTION

         New statutes and regulations are regularly proposed that contain
wide-ranging proposals for altering the structures, regulations and competitive
relationships of the nation's financial institutions. It cannot be predicted
whether or what form any proposed statute or regulation will be adopted or the
extent to which the business of the Company may be affected by such statute or
regulation.


ITEM 2.           PROPERTIES

         The table set forth below shows the locations of the Company's offices
and other facilities, as well as certain additional information relating to
these offices and facilities as of March 31, 1999.

         All of the Company's offices are maintained in operating condition
suitable for retail banking.
<TABLE>
<CAPTION>

                                                                 YEAR FACILITY
                                                                   COMMENCED                LEASED
                         OFFICE LOCATION                           OPERATION               OR OWNED
                         ---------------                           ---------               --------
<S>                                                                   <C>                    <C>
       First Citizens-Newnan                                          1961                   Owned
       Main Office
       19 Jefferson Street
       Newnan, Georgia

       Operations Center                                              1984                   Owned
       10 Olive Center
       Newnan, Georgia

       Bullsboro Branch                                               1981                   Owned
       71 Bullsboro Drive
       Newnan, Georgia

       Peachtree City Branch                                          1981                   Owned
       705 Highway 54, East
       Peachtree City, Georgia
</TABLE>

                                            16
<PAGE>
<TABLE>
<CAPTION>
                                                                 YEAR FACILITY
                                                                   COMMENCED                LEASED
                         OFFICE LOCATION                           OPERATION               OR OWNED
                         ---------------                           ---------               --------


<S>                                                                   <C>                   <C>
       White Oak Branch                                               1987                  Leased
       1421 Highway 34, East
       Newnan, Georgia

       LaGrange Branch                                                1988                   Owned
       310 Broad Street
       LaGrange, Georgia

       Hogansville Branch                                             1988                   Owned
       410 East Main Street
       Hogansville, Georgia

       Hospital Road Branch                                           1989                   Owned
       14 Hospital Road
       Newnan, Georgia

       WalMart Branch                                                 1998                  Leased
       1025-A Bullsboro Drive
       Newnan, Georgia

       WalMart Branch                                                 1998                  Leased
       125 Pavilion Parkway
       Fayetteville, Georgia

       WalMart Branch                                                 1998                  Leased
       5600 North Henry Boulevard, Suite A
       Stockbridge, Georgia

       Closed Branch Facility                                         N/A                    Owned
       461 Highway 29 North
       Newnan, Georgia

       Proposed Branch Site                                           N/A                    Owned
       Highway 154
       Sharpsburg, Georgia

       First Citizens Bank of Georgia                                 1991                   Owned
       Main Office
       675 North Jeff Davis Drive
       Fayetteville, Georgia 30214

       Riverdale Branch                                               1984                   Owned
       6375 Highway 85
       Riverdale, Georgia 30274
</TABLE>

                                            17
<PAGE>
<TABLE>
<CAPTION>
                                                                 YEAR FACILITY
                                                                   COMMENCED                LEASED
                         OFFICE LOCATION                           OPERATION               OR OWNED
                         ---------------                           ---------               --------

<S>                                                                   <C>                   <C>
       Jonesboro Branch                                               1986                   Owned
       223 North Main Street
       Jonesboro, Georgia 30236
</TABLE>


                                       18
<PAGE>

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

         The Common Stock of the Company is traded on the Nasdaq Stock Market
under the symbol "FSTC." At June 1, 1999, the Company had 700 shareholders of
record. The following table sets forth, on a per share basis, the high and low
sales prices of the Company's Common Stock and the cash dividends paid by the
Company on a quarterly basis.
<TABLE>
<CAPTION>

                     QUARTER
                      ENDED               HIGH             LOW          DIVIDEND


<S>                                   <C>             <C>                  <C>
         March 31, 1999               $     40.88     $     25.50          .10

         December 31, 1998                  29.00           25.00          .10

         September 30, 1998                 30.80           22.00          .09

         June 30, 1998                      35.00           29.00          .08

         March 31, 1998                     35.00           29.25          .08

         December 31, 1997                  35.50           22.67          .07

         September 30, 1997                 23.53           17.50          .07
         June 30, 1997                      18.00           15.50          .07
</TABLE>


ITEM 6.  SELECTED FINANCIAL DATA

SELECTED FINANCIAL INFORMATION AND STATISTICAL DATA

The following selected financial data is derived from the consolidated financial
statements of the Company, and should be read in conjunction with its
consolidated financial statements and the related notes contained elsewhere in
this Annual Report.
<TABLE>
<CAPTION>
                                                         1999            1998            1997          1996          1995
                                                      ------------   -------------   -------------  ------------  ------------
                                                                 (Dollars in thousands, except per share amounts)
BALANCE SHEET:
<S>                                                   <C>            <C>             <C>            <C>           <C>
Total assets                                          $   411,268    $    367,812    $    326,365   $   182,010   $   169,477
Loans, net (1)                                            305,358         263,784         245,409       130,952       130,121
Investments (2)                                            66,125          70,704          45,451        32,451        23,508
Real estate held for development and sale                   2,321           2,321           3,292         3,740         5,070
Deposit accounts (3)                                      357,804         318,382         269,799       130,635       117,818
Borrowings (4)                                              8,859           9,602          17,805        29,489        33,528
Stockholders' equity                                       40,324          36,760          29,803        20,266        16,603

OPERATING DATA:
Interest income                                            30,568          27,906    $     17,532   $    12,412   $    10,830
Interest expense                                           14,843          12,975           8,135         6,512         5,492
Net interest income                                        15,725          14,931           9,397         5,900         5,338
Provision for loan losses                                   1,614             235             185            10           108
Other income                                                3,782           6,826           3,636         5,248         2,357
General and administrative expenses                        12,941          10,600           8,611         4,646         5,071
Income tax expense                                          1,576           3,707           1,585         2,442           896
Net earnings                                                3,376           7,215           2,652         4,050         1,620
Basic earnings per share                                     1.20            2.62            1.15          1.86          0.76
Diluted earnings per share                                   1.13            2.42            1.05          1.81          0.76
Cash dividends per share                                     0.36            0.31            0.29          0.23          0.15
- as a percentage of diluted earnings per share            31.86%          12.81%          27.62%        12.71%        19.74%
Net interest margin                                         4.43%           4.76%           4.71%         3.95%         3.77%

REGULATORY CAPITAL RATIOS (CONSOLIDATED)
Total risk-based                                            11.8%           12.6%           10.3%         20.3%         14.4%
Tier 1 to risk based assets                                 10.5%           11.4%            9.0%           n/a           n/a
Tier 1 to average total assets                               8.3%            8.4%            6.7%           n/a           n/a
Tangible (Thrift only)                                       7.9%            8.0%            6.3%         11.2%          9.1%
Core (Thrift only)                                           7.9%            8.0%            6.3%         11.2%          9.1%

SELECTED FINANCIAL RATIOS AND OTHER
  DATA (AS PERCENTAGES)
Return on average assets                                    0.86%           2.10%           1.23%         2.51%         1.06%
Return on average equity                                    8.44%          21.68%          11.81%        22.25%        10.29%
Average equity to average assets                           10.20%           9.70%          10.38%        11.29%        10.29%
Allowance for loan losses to total loans and OREO           1.61%           1.43%           1.50%         1.05%         1.09%
Nonperforming assets to total loans and OREO                0.55%           1.19%           1.25%         0.63%         0.76%
Allowance for loan losses to nonperforming loans          809.66%         133.46%         131.15%       192.29%       164.44%
Allowance for loan losses to nonperforming assets         292.19%         133.38%         119.96%       165.98%       143.90%
</TABLE>

----------
(1) Includes loans held for sale.
(2) Includes securities, Federal funds sold, and interest-bearing deposits in
    banks.
(3) Includes official checks outstanding. (4) Includes advances from
    Federal funds purchased, Federal Home Loan Bank and notes payable.


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                              RESULTS OF OPERATIONS

The following is a discussion of First Citizens Corporation's (the "Company")
financial condition at March 31, 1999 and 1998 and the results of operations for
the three year period ended March 31, 1999. The purpose of this discussion is to
focus on information about the Company's financial condition and results of
operations which are not otherwise apparent from the audited consolidated
financial statements. Reference should be made to those statements and the
selected financial data presented elsewhere in this report for an understanding
of the following discussion and analysis.

The consolidated balance sheets as of March 31, 1999 and 1998 include the
Company and subsidiaries. On August 22, 1996 Newnan Savings Bank formed a
holding company, Newnan Holdings, Inc. and at the same time merged with
Southside Financial Group, Inc. ("Southside"), the parent company of Citizens
Bank and Trust of Fayette County in a business combination accounted for under
the purchase method of accounting. On March 31, 1997, the Company acquired Tara
Bankshares, Inc. ("Tara"), the parent company of Tara State Bank. This
transaction was also accounted for under the purchase method of accounting.

The consolidated statement of income for the year ended March 31, 1997 includes
the operations of Southside Financial Group, Inc. and Tara Bankshares, Inc.
subsequent to the dates of acquisition. The consolidated statements of income
for the years ended March 31, 1999 and 1998 include the operations of the
Company and all subsidiaries for a full year.

RESULTS OF OPERATIONS FOR THE YEARS ENDED MARCH 31, 1999, 1998 AND 1997

NET EARNINGS

1999 Compared to 1998. For the year ended March 31, 1999, the Company recorded
net profits of $3.4 million or $1.13 per common share on a diluted basis. The
decrease in net earnings compared to 1998 is $3.8 million, or a decrease of
53.21%.

The most significant reason for the decrease in net income for the year ended
March 31, 1999 compared to 1998 was the decrease in gains on sale of real estate
held for development and sale, which decreased by $3.0 million. The decrease
accounts for 78% of the net decrease in net income. In addition, the provision
for loan losses increased by $1.4 million and provisions for other losses
increased by $775,000, both of which are discussed later in this discussion and
analysis.

The Company began consolidating the operations of the banking and thrift
subsidiaries during the fiscal year ended March 31, 1998. This consolidation
included the conversion to a common information technology system. The
conversion was completed during the fiscal year ended March 31, 1999.

1998 Compared to 1997. For the year ended March 31, 1998, the Company earned
record net profits of $7.2 million or $2.42 per common share on a diluted basis.
The increase in net earnings compared to 1997 was $4.6 million, or an increase
of 172%. In 1998, the Company's most significant item contributing to the
increase was the gain on sale of real estate held for development and sale held
by Jefferson Ventures, Inc. The gain in 1998 of $3.4 million represented an
increase of $2.3 million compared to 1997 and accounts for one-half of the
increase in net earnings for the year.

In addition to the gains on sale of real estate, income from operations for the
year ended March 31, 1998 included full-year operations of First Citizens Bank
of Fayette County and First Citizens Bank of Clayton
<PAGE>

County. The year ended March 31, 1997 included only seven months of operations
of First Citizens Bank of Fayette County and none of the operations of First
Citizens Bank of Clayton County. Their combined contribution to net consolidated
earnings was approximately $2.6 million in 1998 versus $851,000 in 1997.


1999 Compared to 1998. Net interest income increased by $794,000 for the year
ended March 31, 1999, or 5.3%. The increase is due primarily to the growth in
interest earning assets. The increase in net interest income due to increases in
volume of interest earning assets was offset by an overall decrease in rates.
For the year ended March 31, 1999, average interest earning assets increased by
$41.7 million, or 13.3%. This increase resulted in an increase in total interest
income of $2.7 million, or 9.5%. For the same period, average interest-bearing
liabilities increased by $38.8 million, or 14.9%, resulting in an increase of
$1.9 million in total interest expense.

The net interest margin decreased during the year from 4.76% to 4.43%. The
decrease in the net interest margin is consistent with the decrease in yield on
earning-assets which decreased by 29 basis points, and only a 2 basis point
decrease in the rate paid on interest bearing liabilities to 4.96%. The interest
spread for the same period decreased from 3.92% at March 31, 1998 to 3.65% at
March 31, 1999.

1998 Compared to 1997. Net interest income increased by $5.5 million for the
year ended March 31, 1998, or 58.9%. The significant increase is due to the
inclusion of the operations of First Citizens Bank of Fayette County and First
Citizens Bank of Clayton County for a full year, and to growth in the commercial
loan portfolio at First Citizens-Newnan. The net interest margin increased
slightly during the year from 4.71% to 4.76%. The slight increase in the net
interest margin is consistent with the increase in yield on earning-assets which
increased by 11 basis points. During the same period, the rate paid on interest
bearing liabilities increased by 21 basis points to 4.98%, resulting in a net
decrease in the interest rate spread of 10 basis points, or 3.92%. Over 97% of
the change in interest income and expense was attributable to the change in
volume for 1998.

For the year ended March 31, 1998, average rates earned on assets and paid on
liabilities differ little from rates in 1997. Overall, rates have increased
slightly which was attributed to the acquisitions of the two community banks.
These banks differ from the thrift in that they market commercial and consumer
loans, in addition to real estate loans which are primarily marketed by the
thrift. Commercial and consumer loans typically earn higher yields. The
increases in rates paid on liabilities was attributable to increased competition
for deposit growth.

PROVISION FOR LOAN LOSSES

The provision for loan losses is based on management's evaluation of economic
conditions, size and composition of the loan portfolio, the historical charge
off experience, the level of nonperforming and past due loans, and other
indicators derived from reviewing the loan portfolio. Management performs such
reviews periodically and determines the level of loan loss allowances needed. At
March 31, 1999 management believes that its allowance for loan losses was
adequate to provide for inherent losses in the loan portfolio.

For the year ended March 31, 1999, overall loan quality continued to improve for
the most part. A portion of the apparent improvement was the result of
charge-offs during the year. Net charge-offs increased during fiscal year 1999
to $454,000, or an increase of $331,000. This 270% increase included some loans
which had been on nonaccrual status previously. Nonaccrual loans as a percentage
of total loans
<PAGE>

decreased from 1.07% to .20% in 1999. The net charge-off ratio increased during
1999 to .16% from .05% at March 31, 1998.

Despite the improvement in problem loans, the provision for loan losses
increased by $1,379,000 for the year ended March 31, 1999. The provision over
and above the net charge off amount is attributable to the significant increase
in loans during fiscal 1999. Total loans increased from 1998 to 1999 by $42.3
million, or 15.7%. Management's evaluation of the allowance for loan losses
includes assigning risk factors to various types of loans based on prior
experience, current trends, specifically identified problem loans, and other
factors pertinent to the loan portfolio. Traditionally, one to four family
residential loans carry a smaller risk factor which is attributable to the
volume of losses recognized over the years, while commercial, acquisition and
development, construction, and consumer loans carry loss factors ranging from
 .75% to 20%.

During the year ended March 31, 1999, one to four family residential loans
decreased by $17.8 million, while commercial loans increased by $33.2 million,
acquisition and development loans increased by $9.7 million, construction loans
increased by $17.6 million, and consumer loans increased by $1.0 million. The
overall increase in loans accompanied by the shift in the composition of the
loan portfolio resulted in the significant increase in the provision for loan
losses.

At March 31, 1999 and 1998, the allowance for loan losses as a percentage of
total loans was 1.61% and 1.43%, respectively.

1998 Compared to 1997. The provision for loan losses increased to $235,000 from
$185,000 for the year ended March 31, 1998. The increase in the provision of
$50,000 is attributable to the increase in total loans of $18.9 million during
the year. The allowance for loan losses at March 31, 1998 was $3,852,000, or a
net increase of $113,000 for the year. Net charge-offs decreased from $143,000
in 1997 to $123,000 in 1998, representing a net charge-off ratio of 0.05%
compared to 0.08% in 1997. The allowance as a percentage of nonaccruing loans
decreased only slightly during 1998 to 133.46%, compared to 131.15% in 1997. The
continued improvement is attributable to the Company's lending environment along
with the overall general economy.

OTHER INCOME

1999 Compare to 1998. Other income decreased by $3,044,000 in 1999, or 44.6% in
1999 compared to 1998. Gains on sale of real estate held for development and
sale decreased by $3,005,000 or 89.20% which accounts for 99% of the total
decrease in other income (see "Real Estate Activities" below). Deposit and
service charge income increased by $183,000 for the year ended March 31, 1999.
This increase is primarily due to the $29 million growth in demand deposit
accounts. Gains on sale of loans decreased by $252,000, or 24.9% in 1999
compared to 1998. The decrease in gains on sale of loans was more than offset by
an increase in net realized gains on sale of securities of $280,000.

1998 Compared to 1997. Other income increased by $3,190,000 in 1998, or 87.7% in
1998 compared to 1997. Gains on sale of real estate held for development and
sale increased by $2,300,000, or 72% of the total increase. Deposit and service
charge income and other operating income increased by $525,000 and $317,000,
respectively for the year ended March 31, 1998. These increases were due
primarily to the inclusion of a full year's operations for the two acquired
banks which accounted for $589,000 of the total increase in deposit and service
charge income and other operating income. In addition, First Citizens-Newnan
grew $8.4 million in demand deposit accounts which contributes to the increase
in service charge income. Gains on sale of loans increased by $202,000, or 25%
in 1998 compared to 1997. This increase is attributable to the housing market in
the Company's market areas combined with the
<PAGE>

favorable mortgage rates offered during the year. During 1998, the Company
combined the mortgage operations of First Citizens Bank-Newnan and First
Citizens Bank of Fayette County. Total loans sold during 1998 was $69.8 million
compared to $55.7 million in 1997.

REAL ESTATE ACTIVITIES

The Company engages in real estate development through a wholly owned subsidiary
of First Citizens-Newnan, Jefferson Ventures, Inc., which owns the White Oak
residential development in Newnan, Georgia. Since 1991, as a result of
regulatory restrictions, Jefferson Ventures ceased its development activity and
adopted a strategy of selling off, in an orderly manner, remaining developed
lots to builders and undeveloped parcels to other developers. The table below
summarizes real estate sales for the periods shown:
<TABLE>
<CAPTION>

                                           Summary of Real Estate Sales
                                           For the Years Ended March 31,

                                          1999                1998                 1997
                                   -------------------  ------------------   -----------------
<S>                                  <C>                  <C>                 <C>
Number of lots sold                                 -                   3                  15
Acres of land sold                                  -                 485                 116
Net sales proceeds                   $              -     $     4,314,750     $     1,853,650
Less:  Basis of land sold                           -             946,007             448,044
Gains recognized (deferred)                   363,885                   -             349,808
                                   -------------------  ------------------   -----------------
Gain on sale of real estate          $        363,885     $     3,368,743     $     1,069,036
                                   ===================  ==================   =================
</TABLE>

Note: The above table represents pretax gains from real estate sales and not the
net earnings from Jefferson Ventures, Inc.

1999 Compared to 1998. During the year ended March 31, 1999, Jefferson Ventures,
Inc. did not sell any land. The gain on sale of real estate held for development
and sale represents deferred gains from previous sales that were able to be
recognized in fiscal year 1999. At March 31, 1999, the White Oak development
consisted of approximately 1,094 acres of open land. At March 31, the estimated
market value of the property continues to exceed its carrying value of $2.0
million.

1998 Compared to 1997. As mentioned above, net gains increased by $2,300,000 in
1998. At March 31, 1998, the White Oak development also consisted of
approximately 1,094 acres of open land.

In June 1996, the Company entered into an agreement to sell over time
approximately 1,400 acres of the remaining land. The first closing under this
contract occurred in June 1997 when the buyer purchased 400 acres. As a result
of that closing, Jefferson Ventures recognized a gain of $3.3 million. The
remaining land may be purchased by the buyer over an eight year period.

OTHER EXPENSES

1999 Compared to 1998. Other expenses increased during 1999 by $2,341,000
compared to the same period in 1998. The increase in other expenses is primarily
related to the data processing conversion and consolidation of the loan and
accounting operations. The increase in data processing expense of $711,000 is
directly related to the conversion from three separate systems to one data
processing system for the entire company. Included in this increase are
termination fees, training, and conversion costs. The provision for other
operating losses includes $501,000 provision for conversion losses and $274,000
for other loan losses related to a previous loss in 1997.
<PAGE>

Occupancy and equipment expenses increased by $606,000 for the year ended March
31, 1999 as compared to 1998. These increases reflect the acquisition of three
Wal-Mart store locations purchased as of December 31, 1998, significant repairs
to the Newnan main office, the disposal of furniture and equipment in connection
with the consolidation of data processing departments, and increased
depreciation expense related to the new data processing system.

During fiscal year 1999, salaries and benefits decreased by $330,000 which
reflects the conversion and consolidation of the Company's operations. This
trend is expected to continue as the consolidation is completed and the results
are realized in operating costs.

1998 Compared to 1997. Other expenses increased during 1998 by $1,978,000
compared to the same period in 1997. The significant increase is due to the full
year of operating expenses for the two commercial banks included in the year
ended March 31, 1998. This combined increase in other expenses related to the
inclusion of First Citizens Bank of Fayette County and First Citizens Bank of
Clayton County was $2,976,000. The increase in expenses attributable to the
acquired banks was offset by the nonrecurring expenses in 1997 of the $772,000
SAIF assessment and the other operating loss of $982,000. All other items of
other expenses increased approximately $756,000, of which $489,000 was an
increase in salaries and benefits at First Citizens Bank-Newnan.

Amortization of goodwill was $372,000 for the year and relates to amortization
of goodwill recorded in connection with the acquisition of the First Citizens
Bank of Fayette County and First Citizens Bank of Clayton County. Goodwill is
being amortized over a period of 20 years using the straight-line method.

BALANCE SHEET REVIEW

1999 Compared to 1998. Total assets increased in 1999 by $43.5 million, or
11.81%. The most significant increase in assets came in the growth of the loan
portfolio, which grew $42.3 million, or 15.7%. Total interest-earning assets
increased by $38 million, representing the shift from lower earning assets to
loans. Interest bearing deposits in banks and Federal funds sold combined
decreased $26.7 million while securities increased by $23.5 million. The most
significant categories of growth in assets by Bank subsidiary is as follows:

                                         First                 First Citizens
                                     Citizens Bank           Bank of Georgia(1)
                                     -------------           ----------------
                                               (Dollars in Thousands)

               Total loans                $8,184                     $34,550
               Total securities           22,342                        (205)
               Total assets              $22,860                     $19,624

(1) First Citizens-Fayette and First Citizens-Clayton were merged together
    during the first quarter of 1999.

Total deposits increased by $39.4 million, or 12.4% which was used to fund the
asset growth and reduce other borrowings. The most significant increase was in
interest bearing demand accounts which increased from $62.8 million to $83.3
million, or $20.5 million. The deposit growth by Bank subsidiary is as follows:
<PAGE>


                                      First                     First Citizens
                                  Citizens Bank                 Bank of Georgia
                                  -------------                 ---------------
                                            (Dollars in Thousands)

               Total deposits         $21,701                         $17,305

Federal Home Loan Bank advances decreased in 1999 by $1.3 million as various
advances matured during the year. Other borrowings decreased by $820,000 in
accordance with original amortization terms. Federal funds purchased increased
by $1.4 million in 1999 and is used for short term cash needs.

Stockholders' equity increased by $3.6 million. This increase was funded by net
earnings of $3.4 million, proceeds from issuance of stock of $1.3 million, less
unrealized losses on securities of $32,000 and dividends declared of $1.04
million.

1998 Compared to 1997. Total assets increased in 1998 by $41.4 million, or
12.7%. The most significant increase in assets came in the growth of the loan
portfolio, which grew $18.5 million, or 7.4%. Total interest-earning assets
increased by $43.7 million. Interest bearing deposits in banks and Federal funds
sold combined increased $23.0 million. The most significant categories of growth
in assets by Bank subsidiary is as follows:
<TABLE>
<CAPTION>
                                     NEWNAN             FAYETTE               CLAYTON
                               -------------------  -----------------    ------------------
                                                 (DOLLARS IN THOUSANDS)
<S>                              <C>                  <C>                  <C>
Total loans                      $          9,554     $        5,781       $         3,016
Total securities                            3,977                532                (2,208)
Interest bearing deposits                  16,932                  -                     -
Federal funds sold                              -              2,450                 3,570
Total assets                               28,600              7,954                 4,825

Total deposits increased by $48.6 million, or 18% which was used to fund the
asset growth and the reduction of other borrowings. The most significant
increase was in other time deposits which increased from $124.0 million to
$172.3 million, or $48.4 million. The deposit growth by Bank subsidiary is as
follows:
<CAPTION>

                                     NEWNAN             FAYETTE               CLAYTON
                               -------------------  -----------------    ------------------
                                                 (DOLLARS IN THOUSANDS)
<S>                                  <C>                  <C>                 <C>
Total deposits                   $         36,235     $        6,256       $         5,804
</TABLE>

Federal Home Loan Bank advances decreased in 1998 by $11.4 million as various
advances matured during the year. Other borrowings increased by a net of $3.2
million, which was due to long term debt incurred at the holding company
originally in the amount of $4,000,000. This debt is being amortized over five
years.

Stockholders' equity increased by $7.0 million. This increase was funded by net
earnings of $7.2 million, proceeds from exercise of stock options totaling
$636,000, plus unrealized gains on securities of $155,000, less treasury stock
purchased of $201,000 and dividends declared of $847,000.
<PAGE>



SECURITIES PORTFOLIO

The carrying amounts of securities at the dates indicated are summarized as
follows:
<TABLE>
<CAPTION>
                                                                   (DOLLARS IN THOUSANDS)
                                           -----------------------------------------------------------------------
                                                                         MARCH 31,
                                           -----------------------------------------------------------------------
                                                   1999                     1998                     1997
                                           ----------------------  -----------------------   ---------------------
<S>                                           <C>                    <C>                      <C>
U.S. Treasury and other U.S. Government
    agencies and corporations                 $           46,252     $             33,997     $            31,865
State and municipal securities                             2,714                    2,841                   2,727
Equity securities                                         11,431                    1,422                   1,368
                                           ----------------------  -----------------------   ---------------------
                                              $           60,397     $             38,260     $            35,960
                                           ======================  =======================   =====================


The carrying amounts of securities in each category as of March 31, 1999 are
shown in the following table according to maturity classifications. Equity
securities are excluded from the table below because they have no contractual
maturity.
<CAPTION>
                                                                (Dollars in Thousands)
                                             U.S. Treasury and Other
                                             U.S. Government Agencies              State and Municipal
                                                 and Corporations                      Securities
                                         ---------------------------------  ----------------------------------
                                            Carrying                           Carrying
                                             Amount            Yield            Amount            Yield
                                         ---------------- ----------------  ---------------- -----------------
<S>                                           <C>                    <C>                      <C>
One year or less                         $         4,492            5.27%   $             -               - %
After one year through five years                 28,941            5.20%               824             4.83%
After five years through ten years                10,234            5.84%             1,890             5.21%
After ten years                                    2,585            5.28%                 -               - %
                                         ---------------- ----------------  ---------------- -----------------
                                         $        46,252            5.35%    $        2,714             5.09%
                                         ================ ================  ================ =================
</TABLE>

REGULATORY CAPITAL REQUIREMENTS

The Company and its subsidiary banks are subject to minimum capital standards as
set forth by federal bank regulatory agencies.

The Company's capital for regulatory purposes differs from the Company's equity
as determined under generally accepted accounting principles. Generally, "Tier
1" regulatory capital will equal capital as determined under generally accepted
accounting principles less goodwill and any unrealized gains or losses on
securities available for sale while "Tier 2" capital consists of the allowance
for loan losses up to certain limitations. Risk based capital is the sum of Tier
1 and Tier 2 capital. The Company's capital ratios and required minimums at
March 31, 1999 are shown below:
<PAGE>

                                                  Minimum
                                                 Regulatory
                                                Requirement       Actual
                                           -----------------  ----------------
Tier 1 capital to risk adjusted assets               4.00%             10.53%
Risk based capital to risk adjusted assets           8.00%             11.79%
Tier 1 leverage ratio (to total assets)              3.00%              8.28%

First Citizens-Newnan is also subject to additional capital requirements of core
capital of 3% of adjusted total assets and tangible capital of 1.5% of adjusted
assets. These requirements are set forth by the Office of Thrift Supervision,
its primary regulator. At March 31, 1999, the Bank was in compliance with these
measures.

Total capital at the subsidiary banks also has an important effect on the amount
of FDIC insurance premiums paid. Institutions not considered well capitalized
can be subject to higher rates for FDIC insurance.

ASSET/LIABILITY MANAGEMENT

It is the Company's objective to manage assets and liabilities to provide a
satisfactory, consistent level of profitability within the framework of
established cash, loan, investment, borrowing, and capital policies. Certain
officers within each subsidiary bank are charged with the responsibility for
monitoring policies and procedures that are designed to ensure acceptable
composition of the asset/liability mix.

Each subsidiary institution's asset/liability mix is monitored on a regular
basis with a report reflecting the interest rate sensitive assets and interest
rate sensitive liabilities being prepared and presented to the Board of
Directors and management's Asset/Liability Committee on a quarterly basis. The
objective is to monitor interest rate sensitive assets and liabilities so as to
minimize the impact of substantial movements in interest rates on earnings. An
asset or liability is considered to be interest rate-sensitive if it will
reprice or mature within the time period analyzed, usually one year or less. The
interest rate-sensitivity gap is the difference between the interest-earning
assets and interest-bearing liabilities scheduled to mature or reprice within
such time period. A gap is considered positive when the amount of interest
rate-sensitive assets exceeds the amount of interest rate-sensitive liabilities.
A gap is considered negative when the amount of interest rate-sensitive
liabilities exceeds the interest rate-sensitive assets. During a period of
rising interest rates, a negative gap would tend to adversely affect net
interest income, while a positive gap would tend to result in an increase in net
interest income. Conversely, during a period of falling interest rates, a
negative gap would tend to result in an increase in net interest income, while a
positive gap would tend to adversely affect net interest income. If the
Company's assets and liabilities were equally flexible and moved concurrently,
the impact of any increase or decrease in interest rates on net interest income
would be minimal.

A simple interest rate "gap" analysis by itself may not be an accurate indicator
of how net interest income will be affected by changes in interest rates.
Accordingly, the Company also evaluates how the repayment of particular assets
and liabilities is impacted by changes in interest rates. Income associated with
interest-earning assets and costs associated with interest-bearing liabilities
may not be affected uniformly by changes in interest rates. In addition, the
magnitude and duration of changes in interest rates may have a significant
impact on net interest income. For example, although certain assets and
liabilities may have similar maturities or periods of repricing, they may react
in different degrees to changes in market interest rates. Interest rates on
certain types of assets and liabilities fluctuate in advance of changes in
general market rates, while interest rates on other types may lag behind changes
in general market rates. In
<PAGE>

addition, certain assets, such as adjustable rate mortgage loans, have features
(generally referred to as "interest rate caps") which limit changes in interest
rates. Prepayment and early withdrawal levels also could deviate significantly
from those assumed in calculating the interest rate gap. The ability of many
borrowers to service their debts also may decrease in the event of an interest
rate increase.
<TABLE>
<CAPTION>
                                         Analysis of Interest Sensitivity
                                               As of March 31, 1999
                                              (Dollars in Thousands)

                                                             0 - 3         3 - 12        1 - 5         OVER 5
                                                             MONTHS        MONTHS        YEARS         YEARS         TOTAL
                                                          ------------- ------------- ------------- ------------- -------------
<S>                                                             <C>            <C>          <C>            <C>          <C>
     Interest-bearing deposits                            $      1,458  $          -  $          -  $          -  $      1,458
     Federal funds sold                                          4,270                                                   4,270
     Investment securities                                      14,657         6,662        34,114         4,964        60,397
     Loans held for sale                                         9,008             -             -             -         9,008
     Loans receivable, net (1)                                 160,223        36,889        73,513        30,737       301,362
                                                          ------------- ------------- ------------- ------------- -------------
              Total interest-earning assets               $    189,616  $     43,551  $    107,627  $     35,701  $    376,495
                                                          ------------- ------------- ------------- ------------- -------------
Interest-bearing liabilities:
     Interest-bearing demand deposits                           83,372             -             -             -        83,372
     Savings                                                    24,632             -             -             -        24,632
     Time deposits                                              42,927       107,123        48,064            30       198,144
     FHLB advances and other borrowings                          4,117           971         3,171           600         8,859
                                                          ------------- ------------- ------------- ------------- -------------
               Total interest-bearing liabilities              155,048       108,094        51,235           630       315,007
                                                          ------------- ------------- ------------- ------------- -------------

Interest rate sensitivity gap                             $     34,568  $   (64,543)  $     56,392  $     35,071  $     61,488
                                                          ============= ============= ============= ============= =============

Cumulative interest rate sensitivity gap                  $     34,568  $   (29,975)  $     26,417  $     61,488
                                                          ============= ============= ============= =============

Interest rate sensitivity gap ratio                               1.22          0.40          2.10         56.67
                                                          ============= ============= ============= =============

Cumulative interest rate sensitivity gap ratio                    1.22          0.89          1.08          1.20
                                                          ============= ============= ============= =============
</TABLE>

(1) Includes nonaccrual loans.

The above table summarizes interest-sensitive assets and liabilities for the
Company as of March 31, 1999. Adjustable rate loans are included in the period
in which their interest rates are scheduled to adjust. Fixed rate loans are
included in the periods in which they are anticipated to be repaid based on
scheduled maturities and anticipated prepayments. Investment securities are
included in their period of maturity while mortgage backed securities are
included according to expected repayment. Certificates of deposit, Federal Home
Loan Bank advances, and notes payable are presented according to contractual
maturity.

As shown in the above table, the cumulative interest sensitivity gap for the one
year period is a negative $30 million. At March 31, 1999, the Company's
cumulative one year interest rate sensitivity gap ratio was 89%. The Bank's
targeted ratio is 80% to 120% in this time horizon. This indicates that the
interest-earning assets will reprice during this period at a rate slower than
the interest-bearing liabilities. The Company's experience has been that not all
liabilities shown as being subject to repricing will in fact reprice with
changes in market rates. The Company has a base of core deposits consisting of
interest
<PAGE>

bearing checking accounts and passbook savings accounts whose average balances
and rates paid thereon will not fluctuate with changes in the levels of market
interest rates.

In conjunction with the Company's mortgage banking operation conducted through
its subsidiary, exposure to changes in interest rates is managed by originating
short-term or adjustable rate mortgages and construction loans to be held in the
loan portfolio while originating fixed-rate mortgages underwritten to
specifications such that they can be sold in the secondary market or to private
investors. Fixed rate mortgages are sold to investors on a forward basis at the
time the Company commits to a certain interest rate with the customer involved.

EFFECTS OF INFLATION

First Citizens' consolidated financial statements and related data presented
herein have been prepared in accordance with generally accepted accounting
principles which require the measure of financial position and operational
results in terms of historic dollars, without considering changes in the
relative purchasing power of money over time due to inflation.

Unlike most industrial companies, virtually all of the assets and liabilities of
a financial institution are monetary in nature. As a result, interest rates have
a more significant impact on a financial institution's performance than the
effects of inflation. Interest rates do not necessarily move in the same
direction or in the same magnitude as the price of goods and services, since
such prices are affected by inflation. The yield and maturity structure of the
institution's assets and liabilities is critical to the maintenance of
acceptable performance levels.
<TABLE>
<CAPTION>
QUARTERLY RESULTS

                                                                          1999 FISCAL YEAR, QUARTER ENDED
                                                         JUNE 30       SEPTEMBER 30      DECEMBER 31        MARCH 31
                                                      --------------- ---------------- ----------------  ---------------
                                                                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE)
<S>                                                   <C>             <C>              <C>               <C>
Interest income                                       $        7,826  $         7,983  $         8,050   $        6,709
Interest expense                                               3,704            3,772            3,655            3,712
Net interest income                                            4,122            4,211            4,395            2,997
Provision for credit losses                                       65               75            1,474                -
Securities gains                                                 208               15               59                7
Earnings before income taxes                                   1,943            1,879            (864)            1,994
Net income (loss)                                              1,339            1,270            (504)            1,271
Net income (loss) per share                                     0.48             0.45           (0.18)             0.45
Net income (loss) per share diluted                             0.44             0.43           (0.17)             0.43
</TABLE>



<PAGE>
<TABLE>
<CAPTION>
                                                                          1998 FISCAL YEAR, QUARTER ENDED
                                                         JUNE 30       SEPTEMBER 30      DECEMBER 31        MARCH 31
                                                      --------------- ---------------- ----------------  ---------------
                                                                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE)
<S>                                                   <C>             <C>              <C>               <C>
Interest income                                       $        6,568  $         6,850  $         7,166   $        7,322
Interest expense                                               2,969            3,119            3,351            3,536
Net interest income                                            3,599            3,731            3,815            3,786
Provision for credit losses                                       40               70               80               45
Securities (losses) gains                                        (3)                2                2                7
Earnings before income taxes                                   5,045            1,978            1,991            1,908
Net income                                                     3,228            1,309            1,361            1,317
Net income per share                                            1.18             0.47             0.49             0.48
Net income per share diluted                                    1.09             0.45             0.45             0.43
</TABLE>

YEAR 2000 DISCLOSURES

The Year 2000 Issue: As the end of this century draws near, there is worldwide
concern that Year 2000 technology problems may cause problems for the global
economies. No country, government, business, or person is immune from the
potential effects of Year 2000 problems. The Year 2000 problem arose because
many existing computer systems and software programs use a two-digit year field.
Because of this, some computers will not properly recognize the turn of the
century. A computer with a two-digit year field may recognize the year 2000 as
1900. If not corrected, many computer applications could fail or miscalculate
data, creating erroneous results.

The Company's State of Readiness: To address the Year 2000 problems, the Company
formed a "Year 2000 Project Team" made up of key employees. This team has been
charged with the responsibility of assessing the problem, overseeing corrective
action, as well as testing the Year 2000 readiness of all equipment, software,
and applications after upgrades have been made.

Critical systems, hardware, and software have received priority attention. As of
March 31, 1999, all critical systems have been upgraded or replaced and the
related software has been upgraded to meet Year 2000 standards and are presently
in the "testing phase" to ensure proper functioning in a Year 2000 environment.
These critical systems include core bank processing hardware and FiServ software
as well as the communication system to the subsidiary banks' correspondent bank,
and our automated new accounts and loan document preparation software. All
critical station personal computers have been upgraded or replaced with Year
2000 compliant hardware and software. Several other software systems have been
upgraded to be Year 2000 compliant and are currently in the testing phase.

Since the Company is heavily reliant on outside vendors for many services such
as electricity, phone service, water, gas, ATM processing, bond accounting, and
bank related forms, the company has developed a system of obtaining vendor
information to help determine a vendor's state of Year 2000 readiness. The
Company is in the process of obtaining and evaluating vendor provided
information related to Year 2000.


<PAGE>

Contingency Plans: Due to the critical nature of the core processing system and
the automated platform for new accounts and loan document preparation, the
Company has developed contingency plans that will be put into operation should
any of these systems not pass Year 2000 readiness testing. These plans have been
developed to minimize the impact of interruptions in business resulting from
problems related to the Year 2000. These plans encompass several alternative
means, including manual processing, to meet a minimum of services necessary to
facilitate customers' banking needs.

Cost: After the assessment phase to determine the extent of the Year 2000
problem, the Board of Directors approved expenditures in excess of $1.2 million
to address the Year 2000 issue. In order to ensure adequate funds are provided
to resolve Year 2000 issues, including those that may not be presently known,
the Year 2000 budget is subject to continuous review and amendment. Management
does not expect the cost of remediation to vary significantly from our present
budget, although there can be no assurances in this regard.

As of March 31, 1999, the Company has recognized expenditures of $1,221,000 in
Year 2000 expenses. These expenditures breaks down as follows: $1,000 for
testing of hardware and software, $1,200,000 system upgrade and replacement, and
$20,000 on education, training, and customer awareness. The data processing
system upgrade was in connection with a planned consolidation of the subsidiary
banks to a common system.

Consequences of Year 2000 Problems: For a bank, Year 2000 problems could be a
concern if loan or deposit interest accruals are not calculated properly. A Year
2000 caused disruption of business could cause the bank to lose a significant
portion of its customer base. This could result in material adverse consequences
for the Bank.

Another area of Year 2000 concern for the Bank is customer awareness and
preparedness. In particular, loan customers who are not Year 2000 compliant
could experience business interruptions which could affect their ability to
repay debts owed to the Bank resulting in adverse bank performance. The customer
awareness and education expenses have been incurred in an effort to insure
customers are aware of the Year 2000 problem and understand the potential impact
on their business. Loan customers considered to have Year 2000 exposure, that
subject the bank to moderate potential credit risk were required to complete a
questionnaire in order to assess their Year 2000 readiness. No customers were
considered to pose a significant credit risk to the Bank.

The foregoing are forward-looking statements reflecting management's current
assessment and estimates with respect to the Company's Year 2000 compliance
efforts and the impact of Year 2000 issues on the Company's business and
operations. Various factors could cause actual plans and results to differ
materially from those contemplated by such assessments, estimates and
forward-looking statements, many of which are beyond the control of the Company.
Some of these factors include, but are not limited to representations by the
Company's vendors and counterparties, technological advances, economic
considerations, and consumer perceptions. The Company's Year 2000 compliance
program is an ongoing process involving continual evaluation and may be subject
to change in response to new developments.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed only to U.S. dollar interest rate changes and
accordingly, the Company manages exposure by considering the possible changes in
the net interest margin. The Company does not have any trading instruments nor
does it classify any portion of the investment portfolio as held for trading.
The Company does not engage in any hedging activities or enter into any
derivative instruments with a higher degree of risk than mortgage backed
securities which are commonly passed through securities. Finally, the Company
has no exposure to foreign currency exchange rate risk, commodity price risk,
and other market risks. Interest rates play a major part in the net interest
income of a financial institution. The
<PAGE>

sensitivity to rate changes is known as "interest rate risk". The repricing of
interest earning assets and interest-bearing liabilities can influence the
changes in net interest income. As part of the Company's asset/liability
management program, the timing of repriced assets and liabilities is referred to
as Gap management. It is the policy of the Company to maintain Gap ratio in the
one-year time horizon of .80 to 1.20. See "Asset/Liability Management". GAP
management alone is not enough to properly manage interest rate sensitivity,
because interest rates do not respond at the same speed or at the same level to
market rate changes. For example, savings and money market rates are more stable
than loans tied to a "Prime" rate and thus respond with less volatility to a
market rate change. The Company uses a simulation model to monitor changes in
net interest income due to changes in market rates. The model of rising, falling
and stable interest rate scenarios allows management to monitor and adjust
interest rate sensitivity to minimize the impact of market rate swings. The
analysis of impact on net interest margins as well as market value of equity
over a twelve month period is subjected to a 200 basis point increase and
decrease in rate. The April model reflects an increase of 2% in net interest
income and a 6% decrease in market value equity for a 200 basis point increase
in rates. The same model shows a 2% decrease in net interest income and a 7%
increase in market value equity for a 200 basis point decrease in rates. The
Company's policy is to allow no more than +- 8% change in net interest income
and no more than +- 25% change in market value equity for these scenarios.
Therefore, the Company is within its policy guidelines and is protected from any
significant impact due to market rate changes.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<PAGE>



                           FIRST CITIZENS CORPORATION
                                AND SUBSIDIARIES

                          CONSOLIDATED FINANCIAL REPORT

                                 MARCH 31, 1999


<PAGE>


                           FIRST CITIZENS CORPORATION
                                AND SUBSIDIARIES

                          CONSOLIDATED FINANCIAL REPORT
                                 MARCH 31, 1999

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

                                TABLE OF CONTENTS
                                -----------------

                                                                     PAGE

INDEPENDENT AUDITOR'S REPORT.............................................1

FINANCIAL STATEMENTS

     CONSOLIDATED BALANCE SHEETS.........................................2
     CONSOLIDATED STATEMENTS OF INCOME...................................3
     CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME.....................4
     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY.....................5
     CONSOLIDATED STATEMENTS OF CASH FLOWS.........................6 AND 7
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.......................8-43




<PAGE>
                          INDEPENDENT AUDITOR'S REPORT

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


TO THE BOARD OF DIRECTORS
FIRST CITIZENS CORPORATION AND SUBSIDIARIES
NEWNAN, GEORGIA


                  We have audited the accompanying consolidated balance sheets
of FIRST CITIZENS CORPORATION AND SUBSIDIARIES as of March 31, 1999 and 1998,
and the related consolidated statements of income, comprehensive income,
stockholders' equity and cash flows for the three years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.


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


                  In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position of
First Citizens Corporation and Subsidiaries as of March 31, 1999 and 1998, and
the results of their operations and their cash flows for the three years then
ended, in conformity with generally accepted accounting principles.



                                                      /s/ Mauldin & Jenkins, LLC




Atlanta, Georgia
May 19, 1999

<PAGE>
<TABLE>
<CAPTION>
                                                FIRST CITIZENS CORPORATION
                                                     AND SUBSIDIARIES

                                                CONSOLIDATED BALANCE SHEETS
                                                  MARCH 31, 1999 AND 1998

----------------------------------------------------------------------------------------------------------------------------
                                   ASSETS                                                1999                    1998
                                   ------                                    ----------------------   ---------------------
<S>                                                                           <C>                      <C>
Cash and due from banks                                                       $          15,776,625    $         13,057,128
Interest-bearing deposits in banks                                                        1,457,872              18,603,707
Federal funds sold                                                                        4,270,000              13,840,000
Securities available-for-sale                                                            59,834,134              36,380,214
Securities held-to-maturity, at amortized cost, fair value $568,731
    and $1,881,250, respectively                                                            562,715               1,879,748
Loans held for sale                                                                       9,008,036               7,473,800
Loans receivable, net                                                                   296,349,982             256,310,581
Real estate held for development and sale                                                 2,320,521               2,320,521
Premises and equipment                                                                    8,179,945               7,371,409
Goodwill and other intangibles                                                            6,675,378               7,009,308
Other assets                                                                              6,832,948               3,565,672
                                                                              ----------------------   ---------------------

          TOTAL ASSETS                                                        $         411,268,156    $        367,812,088
                                                                              ======================   =====================

                    LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits
    Noninterest-bearing demand                                                $          51,656,213    $         43,194,962
    Interest-bearing demand                                                              83,371,571              62,823,293
    Savings                                                                              24,632,052              20,516,630
    Time, $100,000 and over                                                              43,121,279              37,733,682
    Other time                                                                          155,022,525             154,113,488
                                                                              ----------------------   ---------------------
          Total deposits                                                                357,803,640             318,382,055
Federal funds purchased                                                                   1,400,000                       0
Federal Home Loan Bank advances                                                           5,059,329               6,382,660
Other borrowings                                                                          2,400,000               3,219,705
Other liabilities                                                                         4,280,873               3,067,797
                                                                              ----------------------   ---------------------
          Total liabilities                                                             370,943,842             331,052,217
                                                                              ----------------------   ---------------------
Commitments and contingencies

Stockholders' equity
    Preferred stock, no par value, 8,000,000 shares                                               0                       0
        authorized; none issued
    Common stock, $1 par value, 8,000,000 shares authorized;
        2,878,344 and 2,835,897 shares issued, respectively                               2,878,344               2,835,897
    Additional paid-in capital                                                           13,704,079              12,914,173
    Retained earnings                                                                    23,618,297              21,287,420
    Accumulated other comprehensive income                                                  123,594                 155,502
                                                                              ----------------------   ---------------------
                                                                                         40,324,314              37,192,992
    Less cost of 41,028 shares acquired for
     the treasury in 1998                                                                         0                -433,121
                                                                              ----------------------   ---------------------
          Total stockholders' equity                                                     40,324,314              36,759,871
                                                                              ----------------------   ---------------------

          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                          $         411,268,156    $        367,812,088
                                                                              ======================   =====================
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<PAGE>
<TABLE>
<CAPTION>
                                                              FIRST CITIZENS CORPORATION
                                                                   AND SUBSIDIARIES

                                                          CONSOLIDATED STATEMENTS OF INCOME
                                                      YEARS ENDED MARCH 31, 1999, 1998 AND 1997

---------------------------------------------------------------------------------------------------------------------
                                                  1999                       1998                      1997
                                          ----------------------     ---------------------     ----------------------
<S>                                       <C>                        <C>                       <C>
INTEREST INCOME:
    Loans                                 $          26,197,732      $         24,923,405      $          15,985,095
    Interest-bearing deposits in banks                1,063,892                   307,366                    211,910
    Taxable securities                                2,315,708                 1,982,325                  1,088,863
    Nontaxable securities                               128,817                   141,052                     88,495
    Federal funds sold                                  862,038                   551,829                    157,271
                                          ----------------------     ---------------------     ----------------------
          TOTAL INTEREST INCOME                      30,568,187                27,905,977                 17,531,634
                                          ----------------------     ---------------------     ----------------------

INTEREST EXPENSE:
    Deposits                                         14,207,964                11,898,718                  7,442,806
    Other borrowings                                    635,476                 1,076,504                    692,404
                                          ----------------------     ---------------------     ----------------------
          TOTAL INTEREST EXPENSE                     14,843,440                12,975,222                  8,135,210
                                          ----------------------     ---------------------     ----------------------

          NET INTEREST INCOME                        15,724,747                14,930,755                  9,396,424
Provision for loan losses                             1,614,000                   235,000                    185,000
                                          ----------------------     ---------------------     ----------------------
          NET INTEREST INCOME AFTER
            PROVISION FOR LOAN LOSSES                14,110,747                14,695,755                  9,211,424
                                          ----------------------     ---------------------     ----------------------

OTHER INCOME:
    Loan servicing and other fees                       205,671                   291,271                    453,628
    Deposit and other service charge
      income                                          1,676,707                 1,493,830                    969,151
    Gain on sale of loans                               760,749                 1,012,326                    810,110
    Gain on sale of real estate held
      for development and sale                          363,885                 3,368,743                  1,069,036
    Net realized gains on sale of
      securities available-for-sale                     288,529                     8,488                          0
    Other operating income                              486,077                   651,261                    334,289
                                          ----------------------     ---------------------     ----------------------
          TOTAL OTHER INCOME                          3,781,618                 6,825,919                  3,636,214
                                          ----------------------     ---------------------     ----------------------

OTHER EXPENSES:
    Salaries and benefits                             4,986,199                 5,316,318                  3,272,574
    Occupancy and equipment expenses                  2,113,143                 1,507,509                  1,118,608
    Federal insurance premiums
      and assessments                                   121,609                   110,771                    999,651
    Data processing                                   1,266,350                   555,118                    306,836
    Goodwill amortization                               371,929                   371,913                    210,079
    Provision for other operating losses                775,000                         0                    982,000
    Other operating expenses                          3,306,594                 2,737,840                  1,721,495
                                          ----------------------     ---------------------     ----------------------
          TOTAL OTHER EXPENSES                       12,940,824                10,599,469                  8,611,243
                                          ----------------------     ---------------------     ----------------------

          INCOME BEFORE INCOME TAXES                  4,951,541                10,922,205                  4,236,395

INCOME TAX EXPENSE                                    1,575,687                 3,707,334                  1,584,709
                                          ----------------------     ---------------------     ----------------------

          NET INCOME                      $           3,375,854      $          7,214,871      $           2,651,686
                                          ======================     =====================     ======================

BASIC EARNINGS PER COMMON SHARE           $                1.20      $               2.62      $                1.15
                                          ======================     =====================     ======================


DILUTED EARNINGS PER COMMON SHARE         $                1.13      $               2.42      $                1.05
                                          ======================     =====================     ======================
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
<CAPTION>
                                                              FIRST CITIZENS CORPORATION
                                                                   AND SUBSIDIARIES

                                                   CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                                      YEARS ENDED MARCH 31, 1999, 1998 AND 1997

-----------------------------------------------------------------------------------------------------------------------------------
                                                                        1999                       1998                     1997
                                                                 --------------------     --------------------    -----------------
<S>                                                              <C>                      <C>                 <C>
NET INCOME                                                       $         3,375,854      $     7,214,871     $          2,651,686
                                                                 --------------------     --------------------    -----------------

OTHER COMPREHENSIVE INCOME (LOSS):

    Unrealized gains on securities available-for-sale:

        Unrealized holding gains arising during period, net of
            tax of $81,295, $86,960, and 1,494, respectively                 156,089              160,524                      651

         Reclassification adjustment for gains realized
            in net income, net of  tax of $100,532, $3,007,
            and $ - - , respectively                                        -187,997               -5,481                        -
                                                                 --------------------     --------------------    -----------------

OTHER COMPREHENSIVE INCOME (LOSS)                                            -31,908              155,043                      651
                                                                 --------------------     --------------------    -----------------

COMPREHENSIVE INCOME                                             $         3,343,946      $     7,369,914         $      2,652,337
                                                                 ====================     ====================    =================
</TABLE>


SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
<CAPTION>
                                              FIRST CITIZENS CORPORATION
                                                   AND SUBSIDIARIES

                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                       YEARS ENDED MARCH 31, 1999, 1998 AND 1997

------------------------------------------------------------------------------------------------------------------------
                                                                                                       ADDITIONAL
                                                                   COMMON STOCK                          PAID-IN
                                                     -----------------------------------------
                                                         SHARES                PAR VALUE                 CAPITAL
                                                     ----------------     --------------------    ----------------------

<S>                  <C>                                   <C>            <C>                     <C>
BALANCE AT MARCH 31, 1996                                  1,458,307      $         1,458,307     $           5,853,830
    Net income                                                     0                        0                         0
    Shares issued in acquisition                             358,763                  358,763                 7,165,759
    Exercise of stock options                                 23,605                   23,605                   253,973
    Purchase of treasury stock                                     0                        0                         0
    Other comprehensive income                                     0                        0                         0
    Dividends declared, $.29 per share                             0                        0                         0
                                                     ----------------     --------------------    ----------------------
BALANCE AT MARCH 31, 1997                                  1,840,675                1,840,675                13,273,562
    Net income                                                     0                        0                         0
    3 for 2 stock split                                      927,591                  927,591                  -927,591
    Exercise of stock options                                 67,631                   67,631                   568,202
    Purchase of treasury stock                                     0                        0                         0
    Other comprehensive income                                     0                        0                         0
    Dividends declared, $.31 per share                             0                        0                         0
                                                     ----------------     --------------------    ----------------------
BALANCE AT MARCH 31, 1998                                  2,835,897                2,835,897                12,914,173
    Net income                                                     0                        0                         0
    Exercise of stock options                                 83,475                   83,475                 1,181,999
    Retirement of treasury stock                             -41,028                  -41,028                  -392,093
    Other comprehensive loss                                       0                        0                         0
    Dividends declared, $.36 per share                             0                        0                         0
                                                     ----------------     --------------------    ----------------------
BALANCE AT MARCH 31, 1999                                  2,878,344      $         2,878,344     $          13,704,079
                                                     ================     ====================    ======================

<CAPTION>

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

                                                                           ACCUMULATED
                                                                              OTHER                        TREASURY STOCK
                                                 RETAINED                 COMPREHENSIVE          ----------------------------------
                                                 EARNINGS                 INCOME (LOSS)             SHARES               COST
                                           ----------------------    ------------------------    -------------    -----------------
<S>                  <C>                   <C>                       <C>                 <C>                <C>   <C>
BALANCE AT MARCH 31, 1996                  $          12,954,052     $                  -192                0     $            0
    Net income                                         2,651,686                           0                0                  0
    Shares issued in acquisition                               0                           0                0                  0
    Exercise of stock options                                  0                           0                0                  0
    Purchase of treasury stock                                 0                           0           11,300           -231,650
    Other comprehensive income                                 0                         651                0                  0
    Dividends declared, $.29 per share                  -686,113                           0                0                  0
                                           ----------------------    ------------------------    -------------    --------------
BALANCE AT MARCH 31, 1997                             14,919,625                         459           11,300           -231,650
    Net income                                         7,214,871                           0                0                  0
    3 for 2 stock split                                        0                           0           12,900                  0
    Exercise of stock options                                  0                           0                0                  0
    Purchase of treasury stock                                 0                           0           16,828           -201,471
    Other comprehensive income                                 0                     155,043                0                  0
    Dividends declared, $.31 per share                  -847,076                           0                0                  0
                                           ----------------------    ------------------------    -------------    --------------
BALANCE AT MARCH 31, 1998                             21,287,420                     155,502           41,028           -433,121
    Net income                                         3,375,854                           0                0                  0
    Exercise of stock options                                  0                           0                0                  0
    Retirement of treasury stock                               0                           0          -41,028            433,121
    Other comprehensive loss                                   0                     -31,908                0                  0
    Dividends declared, $.36 per share                -1,044,977                           0                0                  0
                                           ----------------------    ------------------------    -------------    --------------
BALANCE AT MARCH 31, 1999                  $          23,618,297     $               123,594                0     $            0
                                           ======================    ========================    =============    ==============

<CAPTION>
                                         ---------------------------
                                                      TOTAL
                                                  STOCKHOLDERS'

                                                   EQUITY
                                            ----------------------

BALANCE AT MARCH 31, 1996                  $          20,265,997
    Net income                                         2,651,686
    Shares issued in acquisition                       7,524,522
    Exercise of stock options                            277,578
    Purchase of treasury stock                          -231,650
    Other comprehensive income                               651
    Dividends declared, $.29 per share                  -686,113
                                          ----------------------
BALANCE AT MARCH 31, 1997                             29,802,671
    Net income                                         7,214,871
    3 for 2 stock split                                        0
    Exercise of stock options                            635,833
    Purchase of treasury stock                          -201,471
    Other comprehensive income                           155,043
    Dividends declared, $.31 per share                  -847,076
                                           ----------------------
BALANCE AT MARCH 31, 1998                             36,759,871
    Net income                                         3,375,854
    Exercise of stock options                          1,265,474
    Retirement of treasury stock                               0
    Other comprehensive loss                             -31,908
    Dividends declared, $.36 per share                -1,044,977
                                           ----------------------
BALANCE AT MARCH 31, 1999                  $          40,324,314
                                           ======================

</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
<CAPTION>
                                                              FIRST CITIZENS CORPORATION
                                                                   AND SUBSIDIARIES

                                                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                      YEARS ENDED MARCH 31, 1999, 1998 AND 1997

------------------------------------------------------------------------------------------------------------------
                                                                            1999                     1998
                                                                     --------------------     --------------------
<S>                                                                  <C>                      <C>
OPERATING ACTIVITIES
    Net income                                                       $         3,375,854      $         7,214,871
    Adjustments to reconcile net income to net
        cash provided by operating activities:
        Depreciation                                                           1,015,480                  610,361
        Amortization of goodwill and other intangibles                           476,852                  439,191
        Amortization of purchase adjustments                                      22,854                 -270,138
        Net realized gains on sale of securities available-for-sale             -288,529                   -8,488
        Provision for loan losses                                              1,614,000                  235,000
        Provision for losses on real estate held for development                       0                   25,000
        Deferred income taxes (benefits)                                        -371,264                  174,090
        (Increase) decrease in loans held for sale                            -1,534,236                  484,871
        Net gain on sale of real estate held for development                    -363,885               -3,368,743
        Net (gain) loss on sale of other real estate owned                        26,690                   -3,667
        Increase  in interest receivable                                        -180,267                 -206,166
        Increase (decrease) in interest payable                                  519,968                  177,924
        Increase (decrease) in taxes payable                                    -813,974                  680,081
        Other operating activities                                              -624,591               -1,745,098
                                                                     --------------------     --------------------

              Net cash provided by operating activities                        2,874,952                4,439,089
                                                                     --------------------     --------------------

INVESTING ACTIVITIES
    Purchases of securities available-for-sale                               -50,900,241              -29,480,346
    Proceeds from maturities of securities available-for-sale                 17,259,199               13,725,839
    Proceeds from sales of securities available-for-sale                      10,424,506               11,710,465
    Proceeds from maturities of securities held-to-maturity                    1,317,033                2,269,809
    Net (increase) decrease in interest-bearing deposits in banks             17,145,835              -16,932,181
    Net (increase) decrease in Federal funds sold                              9,570,000               -6,020,000
    Net increase in loans                                                    -43,034,746              -19,616,427
    Proceeds from sales of real estate held for development                            0                4,314,750
    Proceeds from sales of other real estate owned                               220,194                  770,642
    Purchase of intangibles                                                            0                        0
    Net cash acquired in acquisitions                                            703,490                        0
    Acquisition of subsidiary                                                          0                        0
    Reduction of payable to stockholders of acquired subsidiary                        0               -5,112,287
    Purchase of premises and equipment                                        -1,824,016                 -958,617
    Proceeds from sales of premises and equipment                                      0                    1,386
                                                                     --------------------     --------------------

              Net cash used in investing activities                          -39,118,746              -45,326,967
                                                                     --------------------     --------------------

FINANCING ACTIVITIES
    Net increase in deposits                                                  39,421,585               48,647,645
    Net increase in Federal funds purchased                                    1,400,000                        0
    Proceeds from other borrowings                                                     0                4,000,000
    Repayment of other borrowings                                               -819,705                 -818,243
    Net decrease in Federal Home Loan Bank advances                           -1,323,331              -11,384,684
    Dividends paid                                                              -980,732                 -800,324
    Purchase of treasury stock                                                         0                 -201,471
    Proceeds from issuance of common stock                                     1,265,474                  635,833
                                                                     --------------------     --------------------

          Net cash provided by financing activities                           38,963,291               40,078,756
                                                                     --------------------     --------------------

<CAPTION>

----------------------------------------------------------------------------------------
                                                                           1997
                                                                   ---------------------
<S>                                                                <C>
OPERATING ACTIVITIES
    Net income                                                     $          2,651,686
    Adjustments to reconcile net income to net
        cash provided by operating activities:
        Depreciation                                                            431,370
        Amortization of goodwill and other intangibles                          282,789
        Amortization of purchase adjustments                                    -99,946
        Net realized gains on sale of securities available-for-sale                   0
        Provision for loan losses                                               185,000
        Provision for losses on real estate held for development                      0
        Deferred income taxes (benefits)                                       -583,239
        (Increase) decrease in loans held for sale                              -79,793
        Net gain on sale of real estate held for development                 -1,405,951
        Net (gain) loss on sale of other real estate owned                     -165,162
        Increase  in interest receivable                                       -134,892
        Increase (decrease) in interest payable                                 -20,810
        Increase (decrease) in taxes payable                                    -52,685
        Other operating activities                                            1,675,451
                                                                   ---------------------

              Net cash provided by operating activities                       2,683,818
                                                                   ---------------------

INVESTING ACTIVITIES
    Purchases of securities available-for-sale                               -1,992,068
    Proceeds from maturities of securities available-for-sale                26,319,356
    Proceeds from sales of securities available-for-sale                              0
    Proceeds from maturities of securities held-to-maturity                   4,982,995
    Net (increase) decrease in interest-bearing deposits in banks            -1,147,153
    Net (increase) decrease in Federal funds sold                               690,000
    Net increase in loans                                                   -23,313,078
    Proceeds from sales of real estate held for development                   1,349,495
    Proceeds from sales of other real estate owned                              841,579
    Purchase of intangibles                                                     -51,268
    Net cash acquired in acquisitions                                         5,631,880
    Acquisition of subsidiary                                               -13,716,878
    Reduction of payable to stockholders of acquired subsidiary                       0
    Purchase of premises and equipment                                         -187,037
    Proceeds from sales of premises and equipment                                89,338
                                                                   ---------------------

              Net cash used in investing activities                            -502,839
                                                                   ---------------------

FINANCING ACTIVITIES
    Net increase in deposits                                                 15,618,437
    Net increase in Federal funds purchased                                           0
    Proceeds from other borrowings                                                    0
    Repayment of other borrowings                                               -16,891
    Net decrease in Federal Home Loan Bank advances                         -12,521,455
    Dividends paid                                                             -655,650
    Purchase of treasury stock                                                 -231,650
    Proceeds from issuance of common stock                                      277,578
                                                                   ---------------------

          Net cash provided by financing activities                           2,470,369
                                                                   ---------------------
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                                              FIRST CITIZENS CORPORATION
                                                                   AND SUBSIDIARIES

                                                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                      YEARS ENDED MARCH 31, 1999, 1998 AND 1997

-------------------------------------------------------------------------------------------------------------------------------
                                                               1999                    1998                      1997
                                                        --------------------    --------------------     ----------------------
<S>                                                     <C>                     <C>         <C>          <C>
Net increase (decrease) in cash and due from banks      $         2,719,497     $          -809,122      $           4,651,348

Cash and due from banks at beginning of year                     13,057,128              13,866,250                  9,214,902
                                                        --------------------    --------------------     ----------------------

Cash and due from banks at end of year                  $        15,776,625     $        13,057,128      $          13,866,250
                                                        ====================    ====================     ======================

SUPPLEMENTAL DISCLOSURES
Cash paid for:
        Interest                                        $        14,323,472     $        12,797,298      $           8,156,020
                                                        ====================    ====================     ======================

        Income taxes                                    $         2,760,925     $         2,853,163      $           2,220,633
                                                        ====================    ====================     ======================

BUSINESS COMBINATION AND BRANCH ACQUISITIONS
    Net cash acquired                                   $           703,490     $                 0      $           5,631,880
    Federal funds sold                                                    0                       0                  8,510,000
    Securities available-for-sale                                         0                       0                 31,866,018
    Loans receivable                                                      0                       0                 91,435,309
    Premises and equipment                                          803,151                       0                  4,636,520
    Goodwill and deposit premiums                                   102,210                       0                  7,477,005
    Other assets                                                     82,416                       0                  1,898,322
    Deposits                                                    -28,866,285                       0               -123,602,741
    Advances from Federal Home Loan Bank                                  0                       0                   -855,533
    Other liabilities                                              -286,445                       0                   -643,093
                                                        --------------------    --------------------     ----------------------

          Net assets acquired (liabilities assumed)     $       -27,461,463     $                 0      $          26,353,687
                                                        ====================    ====================     ======================

SUPPLEMENTAL DISCLOSURES OF
    NONCASH INVESTING ACTIVITIES
    Sales of real estate financed by
        loans from the Company                          $                 0     $                 0      $             504,500
    Principal balances of loans transferred
        to other real estate                            $         1,381,345     $           467,259      $             734,749
    Unrealized (gains) losses on securities
        available-for-sale                              $            51,145     $          -238,996      $              -2,145
    Common stock issued in connection with acquisitions
        of subsidiaries                                 $                 0     $                 0      $           7,524,522
    Merger consideration payable to stockholders
        of acquired subsidiary                          $                 0     $                 0      $           5,112,287
</TABLE>


SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>

                           FIRST CITIZENS CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

                  NATURE OF BUSINESS

                     First Citizens Corporation (the "Company") is a bank and
                     thrift holding company whose business is conducted by its
                     wholly-owned subsidiaries, First Citizens Bank (the
                     "Thrift") located in Newnan, Georgia, First Citizens Bank
                     of Georgia (the "Bank") located in Fayetteville, Georgia.
                     During the first calendar quarter of 1999, First Citizens
                     Bank of Fayette County and First Citizens Bank of Clayton
                     County merged to form First Citizens Bank of Georgia. The
                     Thrift and Bank are collectively referred to as banking
                     subsidiaries.

                     First Citizens Bank is a Federally chartered thrift with
                     operations in Newnan, Georgia. The Thrift provides a full
                     range of banking services to individual and corporate
                     customers in its primary market areas of Coweta, Fayette
                     and Troup Counties. Citizens Mortgage Group, Inc. is a
                     wholly-owned subsidiary of First Citizens Bank. Citizens
                     Mortgage Group, Inc. provides selected mortgage lending
                     services within the same market areas.

                     Newnan Financial Services, Inc. is a wholly-owned service
                     corporation of First Citizens Bank and provides real estate
                     appraisal services. Jefferson Ventures, Inc. is a
                     wholly-owned subsidiary of Newnan Financial Services, Inc.
                     and is involved primarily in the holding and sale of
                     undeveloped real estate in its primary market area of
                     Coweta County.

                     First Citizens Bank of Georgia is a state chartered
                     commercial bank with operations in Fayetteville and
                     Riverdale, Georgia. The Bank provides a full range of
                     banking services to individual and corporate customers in
                     their primary market areas of Fayette, Clayton, and Henry
                     Counties and the south metropolitan Atlanta area.

                  BASIS OF PRESENTATION

                     The consolidated financial statements include the accounts
                     of the Company and its subsidiaries. Significant
                     intercompany transactions and accounts are eliminated in
                     consolidation.

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

<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                  CASH AND DUE FROM BANKS

                     Cash on hand, cash items in process of collection and
                     amounts due from banks are included in cash and due from
                     banks.

                     The Company and its subsidiaries maintain amounts due from
                     banks which, at times, may exceed Federally insured limits.
                     The Company has not experienced any losses in such
                     accounts.

                  SECURITIES

                     Securities are classified based on management's intention
                     on the date of purchase. Securities which management has
                     the intent and ability to hold to maturity are classified
                     as held-to-maturity and reported at amortized cost. All
                     other securities are classified as available-for-sale and
                     carried at fair value with net unrealized gains and losses
                     included in stockholders' equity, net of tax. Equity
                     securities without a readily determinable fair value are
                     included in securities available-for-sale and carried at
                     cost.

                     Interest and dividends on securities, including
                     amortization of premiums and accretion of discounts, are
                     included in interest income. Realized gains and losses from
                     the sale of securities are determined using the specific
                     identification method.

                  LOANS HELD FOR SALE

                     Loans held for sale consist primarily of mortgage loans
                     which are carried at the lower of aggregate cost or fair
                     value. The determination of fair value includes
                     consideration of outstanding commitments from investors,
                     related origination fees and costs and commitment fees
                     paid. Gains and losses are recognized at settlement dates
                     and are determined by the difference between the selling
                     price and the carrying value of the loans sold. The Company
                     sells primarily its fixed rate mortgage loan originations,
                     on a servicing released basis. The Company's practice is to
                     originate mortgage loans subject to existing purchase
                     commitments from third party investors.

                  LOANS

                     Loans are carried at their principal amounts outstanding
                     less unearned income and fees and the allowance for loan
                     losses. Interest income on loans is credited to income
                     based on the principal amount outstanding.

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                  LOANS (CONTINUED)

                     Loan origination fees and certain direct costs incurred in
                     originating loans are deferred and recognized as income
                     over the life of the loan.

                     The allowance for loan losses is maintained at a level that
                     management believes to be adequate to absorb potential
                     losses in the loan portfolio. Management's determination of
                     the adequacy of the allowance is based on an evaluation of
                     the portfolio. This evaluation is inherently subjective as
                     it requires material estimates that are susceptible to
                     significant changes including the amounts and timing of
                     future cash flows expected to be received on impaired
                     loans. In addition, regulatory agencies, as an integral
                     part of their examination process, periodically review the
                     Company's allowance for loan losses, and may require the
                     Company to record additions to the allowance based on their
                     judgment about information available to them at the time of
                     their examinations.

                     The accrual of interest on loans is discontinued when, in
                     management's opinion, the borrower may be unable to meet
                     payments as they become due. When accrual of interest is
                     discontinued, all unpaid accrued interest is reversed
                     against current income. Interest income is subsequently
                     recognized only to the extent cash payments are received.

                     A loan is considered to be impaired when it is probable the
                     Company will be unable to collect all principal and
                     interest payments due in accordance with the terms of the
                     loan agreement. Individually identified impaired loans are
                     measured based on the present value of payments expected to
                     be received, using the contractual loan rate as the
                     discount rate. Alternatively, measurement may be based on
                     observable market prices or, for loans that are solely
                     dependent on the collateral for repayment, measurement may
                     be based on the fair value of the collateral. If the
                     recorded investment in the impaired loan exceeds the
                     measure of fair value, a valuation allowance is established
                     as a component of the allowance for loan losses. Changes to
                     the valuation allowance are recorded as a component of the
                     provision for loan losses.

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                  LOANS (CONTINUED)

                     The Company considers the following type loans to be
impaired:

                     (1)   all nonaccrual loans,

                     (2)   loans that have been restructured in a troubled debt
                           restructuring provided that the restructured loan
                           agreement specifies an interest rate that is less
                           than the Company would be willing to accept at the
                           time of the restructuring for a new loan with
                           comparable risk or the loan becomes impaired based on
                           the terms specified by the restructured loan
                           agreement, and

                     (3)   any other loan in which management does not expect to
                           collect all contractual principal and interest
                           payments in accordance with the terms of the loan
                           agreement.

                     The Company has not identified large groups of
                     smaller-balance homogeneous loans which are collectively
                     evaluated for impairment. Any loan that meets the
                     characteristics as described above are considered to be
                     impaired regardless of loan type or balance.

                  PREMISES AND EQUIPMENT

                     Premises and equipment are stated at cost less accumulated
                     depreciation. Depreciation is computed principally by the
                     straight-line method over the estimated useful lives of the
                     assets.

                  OTHER REAL ESTATE OWNED

                     Other real estate owned represents properties acquired
                     through foreclosure. Other real estate owned is held for
                     sale and is carried at the lower of the recorded amount of
                     the loan or fair value of the properties less estimated
                     selling costs. Any write-down to fair value at the time of
                     transfer to other real estate owned is charged to the
                     allowance for loan losses. Subsequent gains or losses on
                     sale and any subsequent writedown to the fair value are
                     recorded in current operating income.

                  REAL ESTATE HELD FOR DEVELOPMENT AND SALE

                     Real estate held for development and sale are carried at
                     the lower of cost or net realizable value. Carrying costs
                     associated with the properties under development are
                     capitalized as part of the construction costs during the
                     construction period.

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                  REAL ESTATE HELD FOR DEVELOPMENT AND SALE (CONTINUED)

                     Sales of real estate are recognized upon closing. The
                     recognition of gains and losses is dependent upon and
                     determined by the terms and conditions of the sale and
                     whether the Company has provided financing to facilitate
                     such sales. If the transaction does not meet the initial
                     investment requirements of Statement of Financial
                     Accounting Standards (SFAS) No. 66, "Accounting for Sales
                     of Real Estate", income recognition is deferred until such
                     requirements are met. Gains recognized or deferred are
                     based on the proceeds from sale, less selling costs and the
                     carrying value of the real estate, including carrying
                     costs. Any losses are recognized at time of sale.

                  GOODWILL AND OTHER INTANGIBLES

                     Goodwill and other intangibles consist of goodwill and
                     deposit base premiums related to bank and branch
                     acquisitions. Goodwill is being amortized by the
                     straight-line method over 20 years. Deposit base premiums
                     are being amortized over 10 years.

                  INCOME TAXES

                     Income tax expense consists of current and deferred taxes.
                     Current income tax provisions approximate taxes to be paid
                     or refunded for the applicable year. Deferred income tax
                     assets and liabilities are determined using the balance
                     sheet method. Under this method, the net deferred tax asset
                     or liability is determined based on the tax effects of the
                     differences between the book and tax bases of the various
                     balance sheet assets and liabilities and gives current
                     recognition to changes in tax rates and laws.

                     Recognition of deferred tax balance sheet amounts is based
                     on management's belief that it is more likely than not that
                     the tax benefit associated with certain temporary
                     differences, tax operating loss carryforwards and tax
                     credits will be realized. A valuation allowance is recorded
                     for those deferred tax items for which it is more likely
                     than not that realization will not occur in the near term.

                     The Company and subsidiaries file a consolidated income tax
                     return. Each entity provides for income taxes based on its
                     contribution to income taxes (benefits) of the consolidated
                     group.

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                  EARNINGS PER COMMON SHARE

                     Basic earnings per common share are computed by dividing
                     net income by the weighted-average number of shares of
                     common stock outstanding. Diluted earnings per share are
                     computed by dividing net income by the sum of the
                     weighted-average number of shares of common stock
                     outstanding and potential common shares. Potential common
                     shares consist of stock options.

                  COMPREHENSIVE INCOME

                     In 1998, the Company adopted SFAS No. 130, "Reporting
                     Comprehensive Income". This statement establishes standards
                     for reporting and display of comprehensive income and its
                     components in the financial statements. This statement
                     requires that all items that are required to be recognized
                     under accounting standards as components of comprehensive
                     income be reported in a financial statement that is
                     displayed in equal prominence with the other financial
                     statements. The Company has elected to report comprehensive
                     income in a separate financial statement titled
                     "Consolidated Statements of Comprehensive Income". SFAS No.
                     130 describes comprehensive income as the total of all
                     components of comprehensive income including net income.
                     This statement uses other comprehensive income to refer to
                     revenues, expenses, gains and losses that under generally
                     accepted accounting principles are included in
                     comprehensive income but excluded from net income.
                     Currently, the Company's other comprehensive income
                     consists of items previously reported directly in equity
                     under SFAS No. 115, "Accounting for Certain Investments in
                     Debt and Equity Securities". As required by SFAS No. 130,
                     the financial statements for the prior year have been
                     reclassified to reflect application of the provisions of
                     this statement. The adoption of this statement did not
                     affect the Company's financial position, results of
                     operations or cash flows.


<PAGE>

                                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                  RECENT DEVELOPMENTS

                     In June 1998, the Financial Accounting Standards Board
                     issued SFAS No. 133, "Accounting for Derivative Instruments
                     and Hedging Activities". This statement is required to be
                     adopted for fiscal years beginning after June 15, 1999.
                     However, the statement permits early adoption as of the
                     beginning of any fiscal quarter after its issuance. The
                     Company expects to adopt this statement effective January
                     1, 2000. SFAS No. 133 requires the Company to recognize all
                     derivatives as either assets or liabilities in the balance
                     sheet at fair value. For derivatives that are not
                     designated as hedges, the gain or loss must be recognized
                     in earnings in the period of change. For derivatives that
                     are designated as hedges, changes in the fair value of the
                     hedged assets, liabilities, or firm commitments must be
                     recognized in earnings or recognized in other comprehensive
                     income until the hedged item is recognized in earnings,
                     depending on the nature of the hedge. The ineffective
                     portion of a derivative's change in fair value must be
                     recognized in earnings immediately. Because of the
                     Company's minimal use of derivatives, management does not
                     anticipate that the adoption of SFAS No. 133 will have a
                     significant effect on the Company's earnings or financial
                     position.

NOTE 2.  SECURITIES

                  The amortized cost and fair value of securities are summarized
as follows:
<TABLE>
<CAPTION>
                                                                                  GROSS           GROSS
                                                                AMORTIZED       UNREALIZED     UNREALIZED          FAIR
                                                                  COST            GAINS          LOSSES            VALUE
                                                             ----------------  -------------  --------------  ----------------
<S>                                                          <C>               <C>            <C>             <C>
                 SECURITIES AVAILABLE-FOR-SALE
                    MARCH 31, 1999:
                    U. S. GOVERNMENT AND AGENCY SECURITIES   $    31,879,596   $     29,162   $    (74,651)   $    31,834,107
                    STATE AND MUNICIPAL SECURITIES                 2,551,364        162,355               -         2,713,719
                    MORTGAGE-BACKED SECURITIES                    13,782,302         82,279         (9,458)        13,855,123
                    EQUITY SECURITIES                             11,431,185              -               -        11,431,185
                                                             ----------------  -------------  --------------  ----------------
                                                             $    59,644,447   $    273,796   $    (84,109)   $    59,834,134
                                                             ================  =============  ==============  ================

                    March 31, 1998:
                    U. S. Government and agency securities   $    27,490,368   $    148,527   $    (32,475)   $    27,606,420
                    State and municipal securities                 2,730,648        110,408            (42)         2,841,014
                    Mortgage-backed securities                     4,496,557         21,740         (7,326)         4,510,971
                    Equity securities                              1,421,809              -               -         1,421,809
                                                             ----------------  -------------  --------------  ----------------
                                                             $    36,139,382   $    280,675   $    (39,843)   $    36,380,214
                                                             ================  =============  ==============  ================
</TABLE>

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 2.  SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
                                                                                  GROSS           GROSS
                                                               AMORTIZED       UNREALIZED       UNREALIZED         FAIR
                                                                 COST             GAINS           LOSSES           VALUE
                                                            ----------------  --------------  ---------------  --------------
<S>                                                         <C>               <C>             <C>              <C>
                     SECURITIES HELD-TO-MATURITY
                        MARCH 31, 1999:
                           MORTGAGE-BACKED SECURITIES       $       562,715   $       6,016   $            -   $     568,731
                                                            ================  ==============  ===============  ==============

                        March 31, 1998:
                           Mortgage-backed securities       $     1,879,748   $       4,464   $      (2,962)   $   1,881,250
                                                            ================  ==============  ===============  ==============
<CAPTION>

                  The amortized cost and fair value of securities as of March
                  31, 1999 by contractual maturity are shown below. Maturities
                  may differ from contractual maturities in mortgage-backed
                  securities because the mortgages underlying the securities may
                  be called or prepaid with or without penalty. Therefore, these
                  securities and equity securities are not included in the
                  maturity categories in the following summary.

                                                        SECURITIES AVAILABLE-FOR-SALE          SECURITIES HELD-TO-MATURITY
                                                      -----------------------------------    ---------------------------------
                                                         AMORTIZED            FAIR             AMORTIZED            FAIR
                                                            COST              VALUE               COST             VALUE
                                                      -----------------  ----------------    ---------------   ---------------
<S>                                                   <C>                <C>                 <C>               <C>
                       Due in one year or less        $      6,991,275   $     7,010,722     $            -    $            -
                       Due from one to five years           24,511,756        24,465,461                  -                 -
                       Due from five to ten years            2,414,017         2,517,062                  -                 -
                       Due after ten years                     513,912           554,581                  -                 -
                       Mortgage-backed securities           13,782,302        13,855,123            562,715           568,731
                       Equity securities                    11,431,185        11,431,185                  -                 -
                                                      -----------------  ----------------    ---------------   ---------------
                                                      $     59,644,447   $    59,834,134     $      562,715    $      568,731
                                                      =================  ================    ===============   ===============
</TABLE>
                  Securities with a carrying value of $3,185,948 and $4,163,027
                  at March 31, 1999 and 1998, respectively, were pledged to
                  secure public deposits and for other purposes.

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 2.  SECURITIES (CONTINUED)

                  Gains and losses on sales of securities available-for-sale
consist of the following:
<TABLE>
<CAPTION>
                                                               MARCH 31,
                                           ----------------------------------------------------
                                                 1999               1998              1997
                                           ---------------    ---------------   ---------------
<S>                                        <C>                <C>               <C>
                      Gross gains          $      288,792     $        8,802    $            -
                      Gross losses                  (263)              (314)                 -
                                           ---------------    ---------------   ---------------
                      Net realized gains   $      288,529     $        8,488    $            -
                                           ===============    ===============   ===============


NOTE 3.  LOANS AND ALLOWANCE FOR LOAN LOSSES

                  The composition of loans is summarized as follows:
<CAPTION>

                                                                   MARCH 31,
                                                     ---------------------------------------
                                                             1999                 1998
                                                     ------------------    -----------------
<S>                                                  <C>                   <C>
                      Commercial                     $      31,319,569     $     43,361,665
                      Real estate - construction           100,441,568           80,203,250
                      Real estate - mortgage               147,339,556          116,251,074
                      Consumer and other                    22,783,775           21,340,819
                                                     ------------------    -----------------
                                                           301,884,468          261,156,808
                      Less:
                         Unearned income and fees              522,702              994,535
                         Allowance for loan losses           5,011,784            3,851,692
                                                     ------------------    -----------------

                                                     $     296,349,982     $    256,310,581
                                                     ==================    =================
</TABLE>
<PAGE>

                                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 3.  LOANS AND ALLOWANCE FOR LOAN LOSSES (CONTINUED)

                  Changes in the allowance for loan losses for the years ended
March 31 are as follows:
<TABLE>
<CAPTION>
                                                                              1999              1998              1997
                                                                       ----------------  -----------------  ----------------
<S>                                                                    <C>               <C>                <C>
                       BALANCE, BEGINNING OF YEAR                      $     3,851,692   $      3,739,222   $     1,371,416
                          Allowance acquired in acquisitions                         -                  -         2,325,393
                          Provision for loan losses                          1,614,000            235,000           185,000
                          Loans charged off                                  (653,129)          (410,279)         (147,693)
                          Recoveries of loans previously charged off           199,221            287,749             5,106
                                                                       ----------------  -----------------  ----------------
                       BALANCE, END OF YEAR                            $     5,011,784   $      3,851,692   $     3,739,222
                                                                       ================  =================  ================
</TABLE>
                  The total recorded investment in impaired loans was $1,999,505
                  and $2,331,766 at March 31, 1999 and 1998, respectively.
                  Included in these loans were $619,483 and $2,165,439 that had
                  specific allowances for loan losses of $111,653 and $530,179
                  at March 31, 1999 and 1998, respectively. The average recorded
                  investment in impaired loans for the year ended March 31, 1999
                  and 1998 was $4,061,351 and $2,931,116, respectively. Interest
                  income on impaired loans of $105,749, $115,634, and $136,310
                  was recognized for cash payments received for the years ended
                  March 31, 1999, 1998 and 1997, respectively.

                  The Company has granted loans to certain related parties,
                  including directors, executive officers and their related
                  entities. The interest rates on these loans were substantially
                  the same as rates prevailing at the time of the transaction
                  and repayment terms are customary for the type of loan
                  involved. Changes in related party loans for the year ended
                  March 31, 1999 are as follows:
<TABLE>
<CAPTION>


<S>                                                                        <C>
                      BALANCE, BEGINNING OF YEAR                           $      6,101,421
                         Advances                                                 4,845,788
                         Repayments                                             (3,729,490)
                         Transactions due to changes in related parties         (1,297,836)
                                                                           -----------------
                      BALANCE, END OF YEAR                                 $      5,919,883
                                                                           =================
</TABLE>

                  As of March 31, 1999 and 1998, the Company was servicing loans
                  for others with approximate balances of $71,403,000 and
                  $102,489,000, respectively.

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 4.  PREMISES AND EQUIPMENT

                  Premises and equipment are summarized as follows:
<TABLE>
<CAPTION>
                                                                          MARCH 31,
                                                            --------------------------------------
                                                                   1999                 1998
                                                            -----------------    -----------------
<S>                                                         <C>                  <C>
                      Land                                  $      2,029,781     $      2,042,999
                      Buildings and improvements                   7,103,790            6,551,049
                      Furniture, fixtures and equipment            3,346,396            5,219,304
                      Computer equipment                           1,392,872            1,116,379
                                                            -----------------    -----------------
                                                                  13,872,839           14,929,731
                      Less accumulated depreciation                5,692,894            7,558,322
                                                            -----------------    -----------------
                                                            $      8,179,945     $      7,371,409
                                                            =================    =================
<CAPTION>

NOTE 5.  DEPOSIT ACCOUNTS

                  A summary of time deposits by maturity as of March 31, 1999 is
as follows:

                      2000              $      150,049,982
                      2001                      39,904,221
                      2002                       3,520,654
                      2003                       1,980,730
                      2004                       2,658,214
                      Thereafter                    30,003
                                        -------------------
                                        $      198,143,804
                                        ===================
</TABLE>
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 6.  FEDERAL HOME LOAN BANK ADVANCES

                  Federal Home Loan Bank advances consist of the following:

                                                               MARCH 31,
                                                      --------------------------
                                                         1999          1998
                                                      ------------  ------------

                     Federal Home Loan Bank advances  $ 5,059,329   $ 6,382,660
                                                      ============  ============

                  The advances have maturity dates ranging from April 12, 1999
                  through April 12, 2004. Interest is payable monthly at rates
                  ranging from 5.41% to 7.80%. Advances are collateralized by
                  blanket floating liens on qualifying first mortgages and
                  pledges of certain securities and the Company's Federal Home
                  Loan Bank stock.

                  Aggregate maturities of Federal Home Loan Bank advances at
March 31, 1999 are as follows:

                      2000                             $    1,288,591
                      2001                                  1,285,258
                      2002                                    750,345
                      2003                                    648,649
                      2004                                    486,486
                      Thereafter                              600,000
                                                       ---------------
                              Total                    $    5,059,329
                                                       ===============

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 7.  OTHER BORROWINGS

                  Other borrowings consist of the following:
<TABLE>
<CAPTION>

                                                                                                       MARCH 31,
                                                                                           ----------------------------------
                                                                                                 1999               1998
                                                                                           ---------------    ---------------
<S>                                       <C> <C>                <C> <C>                   <C>                <C>
                       8% purchase money promissory note payable by the Thrift
                          in annual instalments of $21,279, including interest
                          beginning April 21, 1991 through April 21, 1998                  $            -     $       19,705

                       Term note payable by the Company, due in ten semi-annual
                          instalments of $400,000 with interest due quarterly,
                          at prime less seventy-five basis points (7.00% at
                          March 31, 1999) , collateralized by 200,000 shares of
                          common stock of the Bank and 300,000 shares of common
                          stock of the Thrift, matures March 31, 2002.                          2,400,000          3,200,000
                                                                                           ---------------    ---------------
                                                                                           $    2,400,000     $    3,219,705
                                                                                           ===============    ===============

                    Aggregate maturities of other borrowings at March 31, 1999
are as follows:
<CAPTION>

                        2000                                                                                  $       800,000
                        2001                                                                                          800,000
                        2002                                                                                          800,000
                                                                                                              ----------------
                                                                                                              $     2,400,000
                                                                                                              ================
</TABLE>
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 8.  RETIREMENT PLANS AND EMPLOYEE BENEFITS

                  EMPLOYEE BENEFIT PLANS

                  401(K) PLAN

                     The Company has a 401(k) plan which permits eligible
                     employees to make discretionary contributions to the plan
                     of up to 15 percent of total compensation. The Company
                     matches the employee's contributions 100 percent up to 4
                     percent, not to exceed $2,750 per year, of the employee's
                     base annual salary. The Company recognized $146,634,
                     $75,023 and $49,211 in expense related to its obligation
                     under the plan for the years ended March 31, 1999, 1998 and
                     1997, respectively. In addition, upon approval of the Board
                     of Directors, the Company may make an annual discretionary
                     profit-sharing contribution to all eligible plan
                     participants. There was no such discretionary contribution
                     made by the Company for the years ended March 31, 1999,
                     1998 and 1997.

                  INCENTIVE COMPENSATION PLAN

                     The Company has an Incentive Compensation Plan for all
                     employees that provides for annual cash awards based on
                     certain achievement standards and earnings performance. The
                     awards are based on earnings performance in relation to
                     earnings goals as proposed by executive officers and
                     ratified by the Board of Directors. The Company's expense
                     under this plan was $459,680, $319,523 and $208,010 for the
                     years ended March 31, 1999, 1998 and 1997, respectively.

                  STOCK OPTION PLANS

                     The Company has a Stock Option Plan which consists of stock
                     options awarded to officers and key employees with an
                     exercise price representing the fair market value of the
                     common stock at date of grant. The plan expired in 1996 and
                     no additional options may be granted. Other pertinent
                     information relating to the options is summarized as
                     follows:

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NOTE 8.  RETIREMENT PLANS AND EMPLOYEE BENEFITS (CONTINUED)

                  EMPLOYEE BENEFIT PLANS (CONTINUED)

                  STOCK OPTION PLANS (CONTINUED)

                                                                          MARCH 31,
                                    --------------------------------------------------------------------------------------
                                              1999                          1998                          1997
                                    --------------------------    --------------------------    --------------------------
                                                   WEIGHTED-                     WEIGHTED-                     WEIGHTED-
                                                    AVERAGE                       AVERAGE                       AVERAGE
                                                   EXERCISE                      EXERCISE                      EXERCISE
                                      NUMBER         PRICE         NUMBER          PRICE          NUMBER         PRICE
                                    -----------   ------------    ----------    ------------    -----------   ------------
<S>                                     <C>       <C>               <C>          <C>               <C>         <C>
Under option, beginning of year         98,735    $      7.12       133,880      $     6.78        149,570     $     6.78
   Exercised                          (22,490)           4.84      (35,145)            3.86       (15,690)           5.33
                                    -----------                   ----------                    -----------

Under option and exercisable,
   end of year                          76,245           7.79        98,735            7.12        133,880           6.78
                                    ===========                   ==========                    ===========
<CAPTION>

                                                                                                           WEIGHTED-
                                                                                            WEIGHTED-       AVERAGE
                                                                                             AVERAGE       REMAINING
                                                                             PRICE           EXERCISE     CONTRACTUAL
                                                            NUMBER           RANGE            PRICE          LIFE
                                                          ------------ ------------------- ------------- --------------

              Options outstanding and exercisable,
                 end of year                                    9,075   $            2.65  $       2.65           2.92
                                                               31,170                5.67          5.67           5.00
                                                               36,000               10.92         10.92           6.75
                                                          ------------
                                                               76,245
                                                          ============
</TABLE>

                  EMPLOYEE STOCK PURCHASE PLAN

                     On June 24, 1997, the Company adopted an Employee Stock
                     Purchase Plan (the "Plan") to provide substantially all
                     employees an opportunity to purchase shares of its common
                     stock through payroll deductions. Each participant may
                     elect to contribute at least 1% and up to 10% of their
                     compensation, including bonuses. On the first day of each
                     calendar year (the "grant date"), a participant is granted
                     a right to purchase a fixed maximum number of whole shares
                     of the Company's common stock for that calendar year. The
                     maximum number is determined by dividing $25,000 by the
                     fair market value of a share of common stock as of the date
                     the right is granted. On the third business day following a
                     payroll period (the "exercise date"), accumulated payroll
                     deductions are used to purchase shares of the Company's
                     common stock at 90% of its fair market value as of the
                     first day or the last day of the payroll period, whichever
                     is lower.

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 8.  RETIREMENT PLANS AND EMPLOYEE BENEFITS (CONTINUED)

                  EMPLOYEE BENEFIT PLANS (CONTINUED)

                  EMPLOYEE STOCK PURCHASE PLAN (CONTINUED)

                     A total of 37,500 shares were originally available to be
                     sold to participants under the Plan, subject to adjustment
                     upon changes in capitalization of the Company. During the
                     fiscal years ended March 31, 1999 and 1998, 2,455.00 and
                     1,576.50 shares were purchased on the open market for
                     participants, respectively. The average purchase price per
                     share was $30.88 and $29.98, respectively. The purchase
                     price discount charged to operations totaled $11,550 and
                     $7,835 for the years ended March 31, 1999 and 1998.

                  DIRECTOR BENEFIT PLAN

                     The stockholders of the Company approved a Directors'
                     Nonincentive Stock Option Plan (the "Directors' Plan")
                     which provided that a maximum of 300,000 shares would be
                     reserved for future issuance by the Company to be granted
                     to directors of the Company as an alternative to the
                     payment of directors' retainer fees.

                     Pursuant to the Directors' Plan, Directors may elect to
                     receive options in lieu of cash, with the number of options
                     granted equal to the amount of cash compensation the
                     Director would have received divided by $2.00. The option
                     exercise price for each option granted shall be the fair
                     market value of shares of the Company's stock on the date
                     the option is granted less the $2.00 per share amount
                     described above. The compensation expense relating to these
                     options was $ - - , - - , and $36,150 for the years ended
                     March 31, 1999, 1998 and 1997, respectively.

                     Information related to the Directors' Plan is summarized as
follows:
<TABLE>
<CAPTION>
                                                                                            MARCH 31,
                                                      ------------------------------------------------------------------------------
                                                                1999                      1998                      1997
                                                      ----------------------    ----------------------    --------------------------
                                                                 WEIGHTED-                 WEIGHTED-                  WEIGHTED-
                                                                  AVERAGE                   AVERAGE                    AVERAGE
                                                                  EXERCISE                 EXERCISE                    EXERCISE
                                                       NUMBER      PRICE      NUMBER         PRICE       NUMBER         PRICE
                                                      --------- -----------     ----------   -----------  -----------    -----------
<S>                                                     <C>      <C>           <C>         <C>            <C>          <C>
                  Under option, beginning of year       214,208  $    7.36       254,025     $     6.89     244,005      $    6.13
                     Granted                                 -                        -              -       29,738          11.57
                     Exercised                         (60,985)       7.32       (39,817)           4.39    (19,718)          4.58
                                                      ---------                 ----------                -----------
                  Under option and exercisable,
                     end of year                        153,22        7.19       214,208           7.36     254,025           6.89
                                                      =========                 ==========                ===========
</TABLE>

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 8.  RETIREMENT PLANS AND EMPLOYEE BENEFITS (CONTINUED)

                  DIRECTOR BENEFIT PLAN (CONTINUED)
<TABLE>
<CAPTION>
                                                                                                         WEIGHTED-
                                                                                          WEIGHTED-       AVERAGE
                                                                                           AVERAGE       REMAINING
                                                                           PRICE           EXERCISE     CONTRACTUAL
                                                          NUMBER           RANGE            PRICE          LIFE
                                                        ----------- -------------------- ------------- --------------
<S>                                       <C>           <C>          <C>                 <C>             <C>
            Options outstanding and exercisable,
               end of year                                   6,683   $      2.20 - 3.30   $      2.56           3.42
                                                            44,809          3.87 - 5.81          4.67           4.50
                                                            95,175          5.83 - 8.75          6.77           5.92
                                                            67,541         9.33 - 13.77         10.49           7.00
                                                        -----------
                                                           214,208
                                                        ===========
</TABLE>
                  As of March 31, 1997, no additional options were available to
grant pursuant to the plan.

                  As permitted by SFAS No. 123, "Accounting for Stock-Based
                  Compensation", the Company recognizes compensation cost for
                  stock-based employee compensation awards in accordance with
                  APB Opinion No. 25, "Accounting for Stock Issued to
                  Employees". There were no options granted for the years ended
                  March 31, 1999 or 1998. The Company recognized $36,150 in
                  compensation cost in connection with the stock options granted
                  for the year ended March 31, 1997. If the Company had
                  recognized compensation costs in accordance with SFAS No. 123,
                  net income and net income per share would have been reduced as
                  follows:

                                                              MARCH 31, 1997
                                                    ----------------------------
                                                         NET          NET INCOME
                                                        INCOME        PER SHARE
                                                    --------------  ------------

                     As reported                    $   2,651,686    $     1.05
                     Stock-based adjustment, net of
                        related tax effect                (38,302)        (0.01)
                                                    --------------  ------------
                     As adjusted                   $    2,613,384    $     1.04
                                                    ==============  ============

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 8.  RETIREMENT PLANS AND EMPLOYEE BENEFITS (CONTINUED)

                  DIRECTOR BENEFIT PLAN (CONTINUED)


                     The per share weighted-average fair value of stock options
                     granted during fiscal year 1997 was $3.79, using the Black
                     Scholes option pricing model.

                     The fair value of the options granted during the year ended
                     March 31, 1997 was based upon the following assumptions:

                                                                1997
                                                           ---------------

                      Risk-free interest rate                       6.45%
                      Expected life of the options          .75 - 9 Years
                      Expected dividends (as a percent
                        of the fair value of the stock)             1.81%
                      Volatility                                   17.60%


NOTE 9.  INCOME TAXES

                  Income tax expense consists of the following:
<TABLE>
<CAPTION>

                                                                         YEAR ENDED MARCH 31,
                                                        --------------------------------------------------------
                                                              1999                1998                1997
                                                        ----------------   ----------------   ------------------
<S>                                                     <C>                <C>                <C>
                      Current                           $     1,946,951    $     3,533,244    $       2,167,948
                      Change in valuation allowance           (465,603)          (250,101)                    -
                      Deferred                                   94,339            424,191            (583,239)
                                                        ----------------   ----------------   ------------------
                                 Income tax expense     $     1,575,687    $     3,707,334    $       1,584,709
                                                        ================   ================   ==================
</TABLE>

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 9.  INCOME TAXES (CONTINUED)

                  The Company's income tax expense differs from the amounts
                  computed by applying the Federal income tax statutory rates to
                  income before income taxes. A reconciliation of the
                  differences is as follows:
<TABLE>
<CAPTION>
                                                                             YEAR ENDED MARCH 31,
                                                 -----------------------------------------------------------------------------
                                                           1999                      1998                      1997
                                                 ------------------------ -------------------------- -------------------------
                                                    AMOUNT      PERCENT       AMOUNT       PERCENT       AMOUNT      PERCENT
                                                 ------------------------ -------------------------- -------------------------
<S>                                              <C>               <C>    <C>                 <C>    <C>                <C>
                  Income taxes at statutory rate $   1,683,524     34%    $     3,713,531     34%    $    1,440,374     34%
                     State income taxes                 43,785      1             264,924      2             95,847      2
                     Tax-exempt income                (48,476)    (1)            (47,975)      -           (31,976)    (1)
                     Goodwill amortization             126,456      3             126,450      1             37,785      1
                     Change in valuation
                     allowance                       (465,603)    (9)           (250,101)    (2)                  -      -
                     Other items, net                  236,001      4            (99,495)    (1)             42,679      1
                                                 ------------------------ -------------------------- -------------------------
                  Income tax expense             $   1,575,687     32%    $     3,707,334     34%    $    1,584,709      3%
                                                 ======================== ========================== =========================
<CAPTION>
                  The components of deferred income taxes are as follows:

                                                                                                     MARCH 31,
                                                                                        -------------------------------------
                                                                                               1999                1998
                                                                                        -----------------   -----------------
                      Deferred tax assets:
<S>                                                                                     <C>                 <C>
                         Allowance for loan losses                                      $      1,351,869    $        852,542
                         Deferred gain on sale of real estate                                          -             137,315
                         Write-down of premises and equipment                                     94,645              94,645
                         Accounting for other real estate                                         22,641              22,641
                         Net operating loss carryforward                                         245,329             699,547
                         Alternative minimum tax carryforward                                     28,315              28,315
                         Other deferred operational losses                                        13,208                   -
                         Core deposit amortization                                                16,039              11,265
                         Deferred compensation                                                   127,426             283,059
                         Other                                                                     7,618               2,595
                                                                                        -----------------   -----------------
                            Total gross deferred tax assets                                    1,907,090           2,131,924
                            Less valuation allowance                                                   -           (465,603)
                                                                                        -----------------   -----------------
                            Net deferred tax assets                                            1,907,090           1,666,321
                                                                                        -----------------   -----------------
                      Deferred tax liabilities:
                         Deferred loan fees                                                      284,449             282,208
                         FHLB stock dividends                                                     97,380              97,380
                         Depreciation                                                            301,634             434,370
                         Securities available-for-sale                                            66,093              83,952
                                                                                        -----------------   -----------------
                            Total deferred tax liabilities                                       749,556             897,910
                                                                                        -----------------   -----------------

                            Net deferred tax assets                                     $      1,157,534    $        768,411
                                                                                        =================   =================
</TABLE>

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 9.  INCOME TAXES (CONTINUED)

                  At March 31, 1999, the Company has available net operating
                  loss carryforwards of approximately $1,135,000 for Federal
                  income tax purposes. If unused, the carryforwards will expire
                  beginning in 2007. Utilization of the net operating loss
                  carryforwards is subject to the separate return limitations
                  and change of ownership rules of the Internal Revenue Code of
                  1996.


NOTE 10. EARNINGS PER COMMON SHARE

                  Presented below is a summary of the components used to
                  calculate basic and diluted earnings per share for the years
                  ended March 31, 1999, 1998 and 1997:
<TABLE>
<CAPTION>
                                                                             YEAR ENDED MARCH 31,
                                                            -------------------------------------------------------
                                                                  1999                1998              1997
                                                            -----------------   ----------------- -----------------
<S>                                                                <C>                 <C>               <C>
Basic Earnings Per Share:
   Weighted average common shares outstanding                      2,810,010           2,754,039         2,310,173
                                                            =================   ================= =================

   Net income                                               $      3,375,854    $      7,214,871  $      2,651,686
                                                            =================   ================= =================

   Basic earnings per share                                 $           1.20    $           2.62  $           1.15
                                                            =================   ================= =================
Diluted Earnings Per Share:
   Weighted average common shares outstanding                      2,810,010           2,754,039         2,310,173
   Net effect of the assumed exercise of stock
     options based on the treasury stock method
     using average market price for the year                         183,627             233,122           210,447
                                                            -----------------   ----------------- -----------------
   Total weighted average common shares and
     common stock equivalents outstanding                          2,993,637           2,987,161         2,520,620
                                                            =================   ================= =================

   Net income                                               $      3,375,854    $      7,214,871  $      2,651,686
                                                            =================   ================= =================

   Diluted earnings per share                               $           1.13    $           2.42  $           1.05
                                                            =================   ================= =================
</TABLE>

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 11. COMMITMENTS AND CONTINGENT LIABILITIES

                  The Company enters into firm commitments to sell mortgage
                  loans which it has originated at agreed upon prices. The sales
                  price for the loans is set based on market rates at the time
                  of the commitment. The Company generally has ten days after a
                  mortgage loan closes in which to provide the investor with the
                  loan documentation, at which time the investor will fund the
                  loan. The investor bears the interest rate risk on the loan
                  from the time of the commitment. The Company's risk is limited
                  to specific recourse provisions within the agreement with the
                  investor and its ability to provide the required loan
                  documentation to the investor within the commitment period.

                  The Company sells mortgage loans to investors under various
                  blanket agreements. Under the agreements, investors generally
                  have a limited right of recourse to the Company for normal
                  representations and warranties and, in some cases, for
                  delinquencies within the first three to six months which lead
                  to loan default and foreclosure. Management believes that the
                  risk of loss to the Company as a result of these provisions is
                  insignificant.

                  The Company enters into residential construction and
                  commercial loan commitments to fund loans to its customers at
                  prime based interest rates in the normal course of business.
                  These instruments involve credit risk in excess of the amount
                  recognized in the financial statements.

                  In the normal course of business, the Company has entered into
                  off-balance sheet financial instruments which are not
                  reflected in the financial statements. These financial
                  instruments include commitments to extend credit and standby
                  letters of credit. Such financial instruments are included in
                  the financial statements when funds are disbursed or the
                  instruments become payable. These instruments involve, to
                  varying degrees, elements of credit risk in excess of the
                  amount recognized in the balance sheet.

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 11. COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED)

                  The Company's exposure to credit loss in the event of
                  nonperformance by the other party to the financial instrument
                  for unfunded mortgage loan commitments, residential
                  construction and commercial loan commitments, commitments to
                  extend credit and standby letters of credit is represented by
                  the contractual amount of those instruments. A summary of the
                  Company's commitments is as follows:
<TABLE>
<CAPTION>
                                                                                                     MARCH 31,
                                                                                        -------------------------------------
                                                                                              1999                 1998
                                                                                        ----------------   ------------------
<S>                                                                                     <C>                <C>
                      Unfunded mortgage loan commitments                                $     7,283,000    $      14,786,000
                      Residential construction and commercial loan commitments               49,320,000           25,825,000
                      Other commitments to extend credit                                     35,208,000           44,470,976
                      Standby letters of credit                                               1,286,601            1,394,031
                                                                                        ----------------   ------------------
                                                                                        $    93,097,601    $      86,476,007
                                                                                        ================   ==================
</TABLE>
                  Commitments to extend credit generally have fixed expiration
                  dates or other termination clauses and may require payment of
                  a fee. Since many of the commitments are expected to expire
                  without being drawn upon, the total commitment amounts do not
                  necessarily represent future cash requirements. The credit
                  risk involved in issuing these financial instruments is
                  essentially the same as that involved in extending loans to
                  customers. The Company evaluates each customer's
                  creditworthiness on a case-by-case basis. The amount of
                  collateral obtained, if deemed necessary by the Company upon
                  extension of credit, is based on management's credit
                  evaluation of the customer. Collateral held varies but may
                  include real estate and improvements, marketable securities,
                  accounts receivable, inventory, equipment and personal
                  property.

                  Standby letters of credit are conditional commitments issued
                  by the Company to guarantee the performance of a customer to a
                  third party. Those guarantees are primarily issued to support
                  public and private borrowing arrangements. The credit risk
                  involved in issuing letters of credit is essentially the same
                  as that involved in extending loans to customers. Collateral
                  held varies as specified above and is required in instances
                  which the Company deems necessary.

                  As of March 31, 1999 and 1998, the Company had commitments to
                  sell loans of $17,602,000 and $14,786,000, respectively.

                  In the normal course of business, the Company is involved in
                  various legal proceedings. In the opinion of management of the
                  Company, any liability resulting from such proceedings would
                  not have a material effect on the Company's consolidated
                  financial statements.
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 11. COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED)

                  LEASE OBLIGATIONS:

                     The Company leases five office facilities and certain
                     equipment under noncancelable lease agreements.

                     The future minimum lease commitments at March 31, 1999 are
                     summarized as follows:

                        Years Ending March 31,
                           2000                         $    112,448
                           2001                              102,800
                           2002                               34,167
                                                        -------------
                                                        $    249,415
                                                        =============

                     Rental expense for the years ended March 31, 1999, 1998 and
                     1997 was $216,821, $171,995 and $141,388, respectively.

                     The Company also leases various other equipment under
                     short-term leases. One of the office facility's lease,
                     scheduled to expire during the year ending March 31, 2000,
                     has a five year extension clause at the sole discretion of
                     the Company.

                  YEAR 2000:

                     The Year 2000 issue is the result of computer programs
                     being written using two digits rather than four to define
                     the applicable year. Systems that do not properly recognize
                     the year "2000" could generate erroneous data or cause
                     systems to fail. The Company is heavily dependent on
                     computer processing and telecommunication systems in the
                     daily conduct of business activities. In addition, the
                     Company must rely on intermediaries, vendors and customers
                     to appropriately modify their systems in order that all may
                     continue normal operations and operate without significant
                     disruptions. The Company has conducted a review of its
                     computer systems to identify the systems that could be
                     affected by the Year 2000 issue. The Company presently
                     believes that, with modifications to its computer systems
                     and conversions to new systems, the Year 2000 issue will
                     not pose significant operational problems for the Company
                     or have a material adverse effect on future operating
                     results. However, absolute assurance cannot be given that;
                     (1) the modifications and conversions will remedy all
                     deficiencies, (2) failure of any of the Company's systems
                     will not have a material impact on operations, or (3)
                     failure of any other companies' systems with whom the
                     Company conducts business will not have a material impact
                     on operations.

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 12. CONCENTRATIONS OF CREDIT

                  The Company originates primarily commercial, residential, and
                  consumer loans to customers in the south metropolitan Atlanta
                  area and surrounding counties. The ability of the majority of
                  the Company's customers to honor their contractual loan
                  obligations is dependent on the economy in the south
                  metropolitan Atlanta area.

                  Eighty-two percent of the Company's loan portfolio is
                  concentrated in loans secured by real estate, of which
                  forty-one percent consists of construction loans. A majority
                  of these loans are secured by real estate in the Company's
                  primary market area. In addition, a substantial portion of the
                  other real estate owned is located in those same markets.
                  Accordingly, the ultimate collectibility of the loan portfolio
                  and the recovery of the carrying amount of other real estate
                  owned are susceptible to changes in market conditions in the
                  Company's primary market area. The other significant
                  concentrations of credit by type of loan are set forth in Note
                  3.

                  The Bank and Thrift, as a matter of policy, do not generally
                  extend credit to any single borrower or group of related
                  borrowers in excess of the following:


                         First Citizens Bank                $     3,030,000
                         First Citizens Bank of Georgia           2,861,000


NOTE 13. REGULATORY MATTERS

                  The Bank and Thrift are subject to certain restrictions on the
                  amount of dividends that may be declared without prior
                  regulatory approval. At March 31, 1999, approximately
                  $2,302,000 of retained earnings were available for dividend
                  declaration without regulatory approval.

                  The Company and the banking subsidiaries are subject to
                  various regulatory capital requirements administered by the
                  federal banking agencies. Failure to meet minimum capital
                  requirements can initiate certain mandatory, and possibly
                  additional discretionary actions by regulators that, if
                  undertaken, could have a direct material effect on the
                  consolidated financial statements. Under capital adequacy
                  guidelines and the regulatory framework for prompt corrective
                  action, the Company and subsidiaries must meet specific
                  capital guidelines that involve quantitative measures of the
                  assets, liabilities, and certain off-balance sheet items as
                  calculated under regulatory accounting practices. The Company
                  and banking subsidiaries' capital amounts and classification
                  are also subject to qualitative judgments by the regulators
                  about components, risk weightings, and other factors.

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 13. REGULATORY MATTERS (CONTINUED)

                  Quantitative measures established by regulation to ensure
                  capital adequacy require the Company and the subsidiaries to
                  maintain minimum amounts and ratios of Total and Tier I
                  capital to risk-weighted assets and of Tier I capital to
                  average assets for First Citizens Bank of Georgia and total
                  adjusted assets for First Citizens Bank. First Citizens Bank
                  must also have core capital equal to 3% of adjusted total
                  assets and tangible capital equal to 1.5% of adjusted total
                  assets. These additional requirements are in accordance with
                  the Office of Thrift Supervision, its primary regulator.
                  Management believes, as of March 31, 1999, the Company and the
                  subsidiaries meet all capital adequacy requirements to which
                  they are subject.

                  As of March 31, 1999, notification from the FDIC categorized
                  the subsidiaries as well capitalized under the regulatory
                  framework for prompt corrective action. To be categorized as
                  well capitalized, the subsidiaries must maintain minimum total
                  risk-based, Tier I risk-based, and Tier I leverage ratios as
                  set forth in the following table. There are no conditions or
                  events since that notification that management believes have
                  changed the banking subsidiaries' category.


<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 13. REGULATORY MATTERS (CONTINUED)

                  The Company and banking subsidiaries' actual capital amounts
                  and ratios are presented in the following table.
<TABLE>
<CAPTION>
                                                                                                             TO BE WELL
                                                                                     FOR CAPITAL         CAPITALIZED UNDER
                                                                                      ADEQUACY           PROMPT CORRECTIVE
                                                               ACTUAL                 PURPOSES           ACTION PROVISIONS
                                                       -----------------------  ---------------------- -----------------------
                                                         AMOUNT       RATIO       AMOUNT      RATIO      AMOUNT       RATIO
                                                       ------------  ---------  ----------- ---------- ------------  ---------
                                                                               (DOLLARS IN THOUSANDS)
                                                       -----------------------------------------------------------------------
<S>                                                    <C>             <C>      <C>             <C>    <C>             <C>
            AS OF MARCH 31, 1999
               TOTAL CAPITAL (TO RISK WEIGHTED
               ASSETS):
                  CONSOLIDATED                         $    37,540     11.79%   $   25,478      8.00%  $    31,847     10.00%
                  FIRST CITIZENS BANK                  $    19,981     13.05%   $   12,245      8.00%  $    15,306     10.00%
                  FIRST CITIZENS BANK OF GEORGIA       $    19,296     13.16%   $   11,734      8.00%  $    14,668     10.00%
               TIER I CAPITAL (TO RISK WEIGHTED
               ASSETS):
                  CONSOLIDATED                         $    33,546     10.53%   $   12,739      4.00%  $    19,109      6.00%
                  FIRST CITIZENS BANK                  $    18,054     11.80%   $    6,122      4.00%  $     9,183      6.00%
                  FIRST CITIZENS BANK OF  GEORGIA      $    17,415     11.87%   $    5,867      4.00%  $     8,801      6.00%
               TIER I CAPITAL (TO AVERAGE ASSETS):
                  CONSOLIDATED                         $    33,546      8.28%   $   16,204      4.00%  $    20,255      5.00%
                  FIRST CITIZENS BANK                  $    18,054      7.88%   $    9,159      4.00%  $    11,449      5.00%
                  FIRST CITIZENS BANK OF GEORGIA       $    17,415     10.01%   $    6,958      4.00%  $     8,698      5.00%
               CORE CAPITAL:
                  FIRST CITIZENS BANK                  $    18,054      7.88%   $    6,869      3.00%          N/A        N/A
               TANGIBLE CAPITAL:
                  FIRST CITIZENS BANK                  $    18,054      7.88%   $    3,435      1.50%          N/A        N/A
</TABLE>

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 13. REGULATORY MATTERS (CONTINUED)
<TABLE>
<CAPTION>
                                                                                                              TO BE WELL
                                                                                     FOR CAPITAL          CAPITALIZED UNDER
                                                                                      ADEQUACY            PROMPT CORRECTIVE
                                                               ACTUAL                 PURPOSES            ACTION PROVISIONS
                                                        ----------------------  ----------------------  -----------------------
                                                          AMOUNT      RATIO       AMOUNT      RATIO       AMOUNT       RATIO
                                                        -----------  ---------  -----------  ---------  -----------  ----------
                                                                                (DOLLARS IN THOUSANDS)
                                                        -----------------------------------------------------------------------
<S>                                                    <C>             <C>      <C>             <C>    <C>             <C>
          As of March 31, 1998
             Total Capital (to Risk Weighted Assets):
                Consolidated                            $   32,987     12.60%   $   20,944      8.00%   $   26,180      10.00%
                First Citizens Bank                     $   17,484     12.22%   $   11,446      8.00%   $   14,308      10.00%
                First Citizens Bank of Fayette County   $   10,020     13.61%   $    5,890      8.00%   $    7,362      10.00%
                First Citizens Bank of Clayton County   $    7,211     15.90%   $    3,628      8.00%   $    4,535      10.00%
             Tier I Capital (to Risk Weighted Assets):
                Consolidated                            $   29,708     11.35%   $   10,470      4.00%   $   15,705       6.00%
                First Citizens Bank                     $   16,459     11.50%   $    5,725      4.00%   $    8,587       6.00%
                First Citizens Bank of  Fayette County  $    9,095     12.36%   $    2,943      4.00%   $    4,415       6.00%
                First Citizens Bank of Clayton County   $    6,638     14.63%   $    1,815      4.00%   $    2,722       6.00%
             Tier I Capital (to Average Assets):
                Consolidated                            $   29,708      8.40%   $   14,147      4.00%   $   17,683       5.00%
                First Citizens Bank                     $   16,459      7.96%   $    8,271      4.00%   $   10,339       5.00%
                First Citizens Bank of Fayette County   $    9,095      9.81%   $    3,708      4.00%   $    4,636       5.00%
                First Citizens Bank of Clayton County   $    6,638     10.75%   $    2,470      4.00%   $    3,087       5.00%
             Core Capital:
                First Citizens Bank                     $   16,459      7.96%   $    6,203      3.00%          N/A         N/A
             Tangible Capital:
                First Citizens Bank                     $   16,459      7.96%   $    3,102      1.50%          N/A         N/A

</TABLE>

<PAGE>

                                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 14. FAIR VALUE OF FINANCIAL INSTRUMENTS

                  The following methods and assumptions were used by the Company
                  in estimating its fair value disclosures for financial
                  instruments. In cases where quoted market prices are not
                  available, fair values are based on estimates using discounted
                  cash flow models. Those models are significantly affected by
                  the assumptions used, including the discount rates and
                  estimates of future cash flows. In that regard, the derived
                  fair value estimates cannot be substantiated by comparison to
                  independent markets and, in many cases, could not be realized
                  in immediate settlement of the instrument. The use of
                  different methodologies may have a material effect on the
                  estimated fair value amounts. Also, the fair value estimates
                  presented herein are based on pertinent information available
                  to management as of March 31, 1999 and 1998. Such amounts have
                  not been revalued for purposes of these financial statements
                  since those dates and, therefore, current estimates of fair
                  value may differ significantly from the amounts presented
                  herein.

                  CASH AND DUE FROM BANKS, INTEREST-BEARING DEPOSITS IN BANKS,
                  AND FEDERAL FUNDS SOLD:

                     The carrying amounts of cash and due from banks,
                     interest-bearing deposits in banks, and Federal funds sold
                     approximate their fair value.

                  AVAILABLE-FOR-SALE AND HELD-TO-MATURITY SECURITIES:

                     Fair values for securities are based on available quoted
                     market prices. The carrying values of equity securities
                     with no readily determinable fair value approximate fair
                     values.

                  LOANS:

                     For variable-rate loans that reprice frequently and have no
                     significant change in credit risk, fair values are based on
                     carrying values. For other loans, the fair values are
                     estimated using discounted cash flow models, using current
                     market interest rates offered for loans with similar terms
                     to borrowers of similar credit quality. Fair values for
                     impaired loans are estimated using discounted cash flow
                     models or based on the fair value of the underlying
                     collateral. Fair values of loans held for sale are
                     determined using outstanding commitments from investors and
                     other similar information.

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 14. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

                  DEPOSITS:

                     The carrying amounts of demand deposits, savings deposits,
                     and variable-rate certificates of deposit approximate their
                     fair values. Fair values for fixed-rate certificates of
                     deposit are estimated using discounted cash flow models,
                     using current market interest rates offered on certificates
                     with similar remaining maturities.

                  FEDERAL FUNDS PURCHASED, FEDERAL HOME LOAN BANK ADVANCES AND
                  OTHER BORROWINGS:

                     The fair value of the Company's Federal funds purchased,
                     Federal Home Loan Bank advances and other borrowings
                     approximate their carrying value.

                  ACCRUED INTEREST:

                     The carrying amounts of accrued interest approximate their
                     fair values.

                  OFF-BALANCE SHEET INSTRUMENTS:

                     Fair values of the Company's off-balance sheet financial
                     instruments are based on fees charged to enter into similar
                     agreements. However, commitments to extend credit and
                     standby letters of credit do not represent a significant
                     value to the Company until such commitments are funded. The
                     Company has determined that these instruments do not have a
                     distinguishable fair value and no fair value has been
                     assigned.

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 14. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

                  The estimated fair values of the Company's financial
                  instruments were as follows:
<TABLE>
<CAPTION>
                                                                  MARCH 31, 1999                         MARCH 31, 1998
                                                        ------------------------------------  -------------------------------------
                                                            CARRYING             FAIR              CARRYING             FAIR
                                                             AMOUNT             VALUE               AMOUNT              VALUE
                                                        -----------------  -----------------  -----------------  ------------------
<S>                                                     <C>                <C>                <C>                <C>
                 Financial assets:
                    Cash and due from banks,
                       interest-bearing deposits in
                       banks and Federal funds sold     $     21,504,497   $     21,504,497   $     45,500,835   $      45,500,835
                    Securities available-for-sale             59,834,134         59,834,134         36,380,214          36,380,214
                    Securities held-to-maturity                  562,715            568,731          1,879,748           1,881,250
                    Loans held for sale                        9,008,036          9,008,036          7,473,800           7,473,800
                    Loans receivable                         296,349,982        304,872,000        256,310,581         260,600,000
                    Accrued interest receivable                2,362,191          2,362,191          2,181,924           2,181,924

                 Financial liabilities:
                    Deposits                                 357,803,640        358,501,836        318,382,055         318,919,578
                    Federal funds purchased                    1,400,000          1,400,000                  -                   -
                    Federal Home Loan Bank
                       advances                                5,059,329          5,059,329          6,382,660           6,382,660
                    Other borrowings                           2,400,000          2,400,000          3,219,705           3,219,705
                    Accrued interest payable                   1,169,368          1,169,368            649,400             649,000
</TABLE>

NOTE 15. BUSINESS COMBINATIONS

                  On November 3, 1995, Newnan Savings Bank, FSB announced the
                  signing of a definitive agreement to merge with Southside
                  Financial Group, Inc. ("Southside"), the parent of Citizens
                  Bank & Trust of Fayette County. In conjunction with the
                  business combination, the Thrift filed an application with the
                  Office of Thrift Supervision for the purpose of effecting a
                  Plan of Reorganization (the Plan) such that a new entity,
                  Newnan Holdings, Inc. (now known as First Citizens
                  Corporation) would acquire all outstanding shares of Newnan
                  Savings Bank whereby each shareholder of the Thrift received
                  one share of Newnan Holdings, Inc. stock for each share of
                  Newnan Savings Bank stock. Under the terms of the definitive
                  agreement, each shareholder of Southside received $41.00 in
                  cash for each share of Southside common stock. Any shareholder
                  owning 5,000 or more common shares could elect to receive up
                  to, but not more than, fifty percent of their consideration in
                  the form of shares of Newnan Holdings, Inc.


<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 15. BUSINESS COMBINATIONS (CONTINUED)

                  On August 21, 1996, Newnan Holdings, Inc. acquired all of the
                  stock of Southside for a purchase price of $15,805,976 plus
                  expenses related to the merger of $75,137. The purchase price
                  included the exchange of 136,990 shares of its common stock
                  for 66,824 shares of Southside common stock. The remaining
                  shares were purchased for a cash price of $13,716,878. The
                  excess of the total acquisition cost over the fair value of
                  the net assets acquired of $5,239,072 is being amortized over
                  a period of twenty years. The acquisition has been accounted
                  for as a purchase and the results of operations of Southside
                  since the date of acquisition are included in the consolidated
                  financial statements.

                  On January 14, 1997, Newnan Holdings, Inc. changed its name to
                  First Citizens Corporation. On that date, Newnan Savings Bank,
                  FSB changed its name to First Citizens Bank and Citizens Bank
                  and Trust of Fayette County changed its name to First Citizens
                  Bank of Fayette County.

                  In November 1996, the Company entered into an agreement and
                  plan of merger with Tara Bankshares Corporation ("Tara"). The
                  merger required a cash payment of $15.00 per share except that
                  certain shareholders of Tara may receive shares of the Company
                  not in excess of 227,608 shares.

                  On March 31, 1997, First Citizens Corporation acquired all of
                  the stock of Tara for a purchase price of $10,547,711. The
                  purchase price included the exchange of 221,773 shares of its
                  common stock for 366,578 shares of Tara common stock. The
                  remaining shares were purchased for a cash price of
                  $5,112,287. The excess of the total acquisition cost over the
                  fair value of the net assets acquired of $2,237,933 is being
                  amortized over a period of twenty years. The acquisition has
                  been accounted for as a purchase and the results of operations
                  of Tara since the date of acquisition are included in the
                  consolidated financial statements.

                  On January 26, 1999, the Company entered into an Agreement and
                  Plan of Reorganization with BB&T Corporation ("BB&T") of
                  Winston-Salem, North Carolina. Under this agreement, the
                  Company will merge with and into BB&T, and will become wholly
                  owned subsidiaries of BB&T. Upon consummation of the merger,
                  each share of the Company's common stock issued and
                  outstanding will be converted into and exchanged for the right
                  to receive 1.0789 shares of BB&T's common stock, plus cash in
                  lieu of any traditional share interest. Consummation of the
                  merger is subject to certain conditions, including approval of
                  the agreement by the Company's stockholders and approval of
                  the merger by various regulatory agencies.

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 16. STOCK SPLIT

                  On October 15, 1997, the Company declared a three-for-two
                  common stock split payable on or after November 14, 1997 to
                  stockholders of record on October 31, 1997. The number of
                  shares issued after the split was 2,768,266, which is
                  reflected in the number of issued shares of common stock on
                  the balance sheet. An amount equal to the par value of common
                  stock declared was transferred from additional paid in capital
                  to common stock. The basic and diluted earnings per share of
                  common stock for the years ended March 31, 1998 and 1997 have
                  been retroactively adjusted for the increased number of shares
                  of common stock after giving effect to the stock split.


NOTE 17. SEGMENT INFORMATION

                  The Company's operations have been classified into two
                  reportable segments, banking and real estate development. The
                  banking segment involves traditional banking services offered
                  through its two wholly-owned bank subsidiaries. Newnan
                  Financial Services, Inc. engages in real estate development
                  through its subsidiary, Jefferson Ventures, Inc. which owns
                  the White Oak residential development. In recent years,
                  management has taken steps to aggressively market the
                  developed lots to builders and tracts of land to developers
                  rather than develop such tracts itself.

                  The Company's reportable segments are organizations that offer
                  different products and services. They are managed separately
                  because of products and services, marketing strategies, and
                  the regulatory environments in which the Company and Banks
                  operate. In addition, the Banks geographically are located in
                  the south metropolitan Atlanta area and employ similar
                  business strategies and are evaluated using similar
                  performance expectations.

                  Total revenue by industry segment includes revenues from
                  unaffiliated customers and affiliates. Revenues from
                  affiliates are eliminated in consolidation. Interest income,
                  interest expense, data processing fees, management fees and
                  other various revenues and expenses between affiliates are
                  recorded on the accrual basis of accounting consistent with
                  similar transactions with customers outside the consolidated
                  group.

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 17. SEGMENT INFORMATION (CONTINUED)

                  Selected segment information by industry segment for the years
                  ended March 31, 1999, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>

                                                                                REPORTABLE SEGMENTS
                                                                ------------------------------------------------------
                                                                                    REAL ESTATE
                  FOR THE YEAR ENDED MARCH 31, 1999                BANKING          DEVELOPMENT           TOTAL
                  ---------------------------------             ----------------  ----------------  ------------------
                                                                              (DOLLARS IN THOUSANDS)
<S>                                                             <C>                 <C>               <C>
                  INTEREST INCOME                               $        30,566     $           2     $        30,568
                  INTEREST EXPENSE                                       14,843                 -              14,843
                  INTERSEGMENT NET INTEREST INCOME (EXPENSE)                  -                 -                   -
                  NET INTEREST INCOME                                    15,723                 2              15,725
                  OTHER REVENUE FROM EXTERNAL CUSTOMERS                   3,229               553               3,782
                  INTERSEGMENT OTHER REVENUES                                66                 -                  66
                  DEPRECIATION AND AMORTIZATION                           1,492                 -               1,492
                  PROVISION FOR LOAN LOSSES                               1,614                 -               1,614
                  SEGMENT PROFIT                                          3,134               242               3,376
                  SEGMENT ASSETS                                        409,160             2,108             411,268
                  EXPENDITURES FOR PREMISES AND EQUIPMENT                 1,824                 -               1,824

<CAPTION>
                                                                                REPORTABLE SEGMENTS
                                                                ------------------------------------------------------
                                                                                    REAL ESTATE
                  FOR THE YEAR ENDED MARCH 31, 1998                BANKING          DEVELOPMENT           TOTAL
                  ---------------------------------             ----------------  ----------------  ------------------
                                                                              (DOLLARS IN THOUSANDS)
<S>                                                             <C>                 <C>               <C>
                  Interest income                               $        27,903     $          13     $        27,906
                  Interest expense                                       12,972                 3              12,975
                  Intersegment net interest income (expense)               (10)                10                   -
                  Net interest income                                    14,921                10              14,931
                  Other revenue from external customers                   3,058             3,768               6,826
                  Intersegment other revenues                                66                 -                  66
                  Depreciation and amortization                           1,050                 -               1,050
                  Provision for loan losses                                 235                 -                 235
                  Segment profit                                          5,001             2,214               7,215
                  Segment assets                                        365,418             2,394             367,812
                  Expenditures for premises and equipment                   959                 -                 959
</TABLE>

<PAGE>

                                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 17. SEGMENT INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
                                                                               REPORTABLE SEGMENTS
                                                               ------------------------------------------------------
                                                                                   REAL ESTATE
                  FOR THE YEAR ENDED MARCH 31, 1997               BANKING          DEVELOPMENT           TOTAL
                  ---------------------------------            ----------------  ----------------  ------------------
                                                                             (DOLLARS IN THOUSANDS)
<S>                                                            <C>                 <C>               <C>
                  Interest income                              $        17,486     $          46     $        17,532
                  Interest expense                                       8,135                 -               8,135
                  Intersegment net interest income (expense)              (17)                17                   -
                  Net interest income                                    9,350                46               9,396
                  Other revenue from external customers                  2,540             1,096               3,636
                  Intersegment other revenues                               66                 -                  66
                  Depreciation and amortization                            714                 -                 714
                  Provision for loan losses                                185                 -                 185
                  Segment profit                                         2,072               580               2,652
                  Segment assets                                       322,329             4,036             326,365
                  Expenditures for premises and equipment                  187                 -                 187

<CAPTION>

NOTE 18. PARENT COMPANY FINANCIAL INFORMATION

                  The following information presents the condensed balance
                  sheets as of March 31, 1999 and 1998 and statements of income
                  and cash flows of First Citizens Corporation as of and for the
                  years ended March 31, 1999, 1998 and 1997.

                                                             CONDENSED BALANCE SHEETS
                                                                                             1999                1998
                                                                                       -----------------    ----------------
                       ASSETS
<S>                                                                                    <C>                  <C>
                          Cash                                                         $        203,784     $       524,707
                          Investment in subsidiaries                                         42,325,958          39,629,547
                          Other assets                                                          784,005             184,554
                                                                                       -----------------    ----------------

                                     TOTAL ASSETS                                      $     43,313,747     $    40,338,808
                                                                                       =================    ================

                       LIABILITIES
                          Other liabilities                                            $        589,433     $       378,937
                          Other borrowings                                                    2,400,000           3,200,000
                                                                                       -----------------    ----------------
                                                                                              2,989,433           3,578,937
                                                                                       -----------------    ----------------

                       STOCKHOLDERS' EQUITY                                                  40,324,314          36,759,871
                                                                                       -----------------    ----------------

                                     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $     43,313,747     $    40,338,808
                                                                                       =================    ================
</TABLE>
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 18. PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
                         CONDENSED STATEMENTS OF INCOME
                                                                            1999              1998                1997
                                                                       ---------------   ---------------    -----------------
               INCOME
<S>                                                                    <C>               <C>                <C>
                  Dividends from subsidiaries                          $    1,025,000    $    2,050,000     $     14,021,311
                  Other                                                     1,027,426           263,164               28,795
                                                                       ---------------   ---------------    -----------------
                                                                            2,052,426         2,313,164           14,050,106
                                                                       ---------------   ---------------    -----------------
               EXPENSE
                  Interest on other borrowings                                225,922           271,939               28,051
                  Salaries and benefits                                     1,156,972           357,126                    -
                  Amortization                                                 85,162            24,993               23,050
                  Other expense                                               389,801           220,850               44,129
                                                                       ---------------   ---------------    -----------------
                             TOTAL EXPENSE                                  1,857,857           874,908               95,230
                                                                       ---------------   ---------------    -----------------

                              INCOME BEFORE INCOME TAX BENEFITS AND
                              UNDISTRIBUTED EARNINGS (DISTRIBUTIONS IN
                              EXCESS OF EARNINGS) OF SUBSIDIARIES             194,569         1,438,256           13,954,876

               INCOME TAX BENEFITS                                          (452,964)         (232,115)             (24,284)
                                                                       ---------------   ---------------    -----------------
                              INCOME BEFORE UNDISTRIBUTED EARNINGS
                              (DISTRIBUTIONS IN EXCESS OF EARNINGS)
                              OF SUBSIDIARIES                                 647,533         1,670,371           13,979,160

               UNDISTRIBUTED EARNINGS (DISTRIBUTIONS IN EXCESS
                 OF EARNINGS) OF SUBSIDIARIES                               2,728,321         5,544,500         (11,327,474)
                                                                       ---------------   ---------------    -----------------

                             NET INCOME                                $    3,375,854    $    7,214,871     $      2,651,686
                                                                       ===============   ===============    =================
</TABLE>

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 18. PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
                                             CONDENSED STATEMENTS OF CASH FLOWS
                                                                        1999                 1998                 1997
                                                                  ------------------   ------------------  -------------------
<S>                                                               <C>                  <C>                 <C>
OPERATING ACTIVITIES
   Net income                                                     $       3,375,854    $       7,214,871   $        2,651,686
   Adjustments to reconcile net income to net
      cash provided by operating activities:
      Amortization                                                           85,162               24,993               23,050
      Undistributed earnings (distributions in excess
         of earnings) of subsidiaries                                   (2,728,321)          (5,544,500)           11,327,474
      Other operating activities                                          (538,360)              316,968            (524,820)
                                                                  ------------------   ------------------  -------------------

              NET CASH PROVIDED BY OPERATING ACTIVITIES                     194,335            2,012,332           13,477,390
                                                                  ------------------   ------------------  -------------------
INVESTING ACTIVITIES
   Net cash acquired in business combination                                      -                    -            1,357,461
   Acquisition of subsidiary                                                      -          (5,112,287)         (13,716,878)
                                                                  ------------------   ------------------  -------------------
              NET CASH USED IN INVESTING ACTIVITIES                               -          (5,112,287)         (12,359,417)
                                                                  ------------------   ------------------  -------------------
FINANCING ACTIVITIES
   Repayment of other borrowings                                          (800,000)                    -                    -
   Proceeds from other borrowings                                                 -            3,200,000                    -
   Purchase of treasury stock                                                     -            (201,471)            (231,650)
   Issuance of common stock                                               1,265,474              635,833              253,585
   Dividends paid                                                         (980,732)            (800,324)            (349,284)
                                                                  ------------------   ------------------  -------------------

              NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES         (515,258)            2,834,038            (327,349)
                                                                  ------------------   ------------------  -------------------

Net increase (decrease) in cash                                           (320,923)            (265,917)              790,624

Cash at beginning of year                                                   524,707              790,624                    -
                                                                  ------------------   ------------------  -------------------

Cash at end of year                                               $         203,784    $         524,707   $          790,624
                                                                  ==================   ==================  ===================
</TABLE>

                                       19
<PAGE>


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

         None.


                                       20
<PAGE>


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The following table sets forth certain information regarding each
Director of the Company.
<TABLE>
<CAPTION>

                                                                                              Shares of Common
                                                                                                   Stock
                                                                   Year First                   Beneficially      Percent
                                                                   Elected or     Term to         Owned at          of
Name                       Age(1)   Principal Occupation(2)         Appointed      Expire      June 1 1999(3)      Class
----                       ------   -----------------------         ---------      ------      --------------      -----
<S>                          <C>                                      <C>           <C>           <C>              <C>
Don A. Barnette              45     Owner, Market Grocery             1997          2000          209,274          7.13
                                    Company, a Clayton County,
                                    GA supplier of wholesale
                                    grocery items to
                                    restaurants and convenience stores

Thomas B. Chandler           62     President, Chandler and           1996          2001           9,514           0.32
                                    Waldrop, Newnan, GA, real
                                    estate developers

J. L. Glover, Jr.            57     Chairman of the Board of          1996          1999          170,108          5.74
                                    the Company; Chairman of
                                    the Board, First Citizens
                                    Bank, Newnan; President,
                                    Glover & Davis, P.A. in
                                    Newnan, GA, attorneys

Ellis A. Mansour             61     President, Treasurer and          1996          2000          157,127          5.28
                                    majority stockholder of
                                    Brothers Limited, a retail
                                    apparel store in Newnan, GA

Thomas J. Moat               52     President and Chief               1996          2001           84,400          2.83
                                    Executive Officer of the
                                    Company; President and
                                    Chief Executive Officer of
                                    First Citizens Bank, Newnan
</TABLE>

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

(1) At March 31, 1999.

(2) Directors have held these positions (other than those with the Corporations)
    for at least the past five years.

(3) In accordance with Rule 13d-3 under the 1934 Act, a person is deemed to be
    the beneficial owner of shares of the Common Stock if he or she has sole or
    shared voting or investment power with respect to such shares, or has a
    right to acquire beneficial ownership at any time within 60 days from June
    1, 1999. The table includes shares owned by spouses, other immediate family
    members, in trust, and in other forms of ownership over which the persons
    named in the table possess sole or shared voting and investment power. None
    of the directors has exercised his right to disclaim beneficial ownership
    over shares in which he possesses a beneficial interest.

                                       21
<PAGE>

                MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

         The Board of Directors held 17 meetings during the fiscal year ended
March 31, 1999. No director attended fewer than 75% of the Board meetings which
were held during the time that they served as directors.

         The Board of Directors of the Company does not have standing Audit or
Compensation Committees. All non-employee directors serve as the Audit and
Compensation Committees. The subsidiary banks have standing Audit and
Compensation Committees as well as a number of other committees which meet
periodically to consider business not requiring the consideration of the entire
Board. The entire Board of Directors serves as a Nominating Committee.

         The outside directors of the Company received $500 per month for their
service as directors of the Company, except for the chairman, who receives $750
per month. Each director also serves as a director of one of the Company's
subsidiary banks, and the subsidiary banks pay their non-employee directors $500
per month for their service as directors and $300 per quarter for their service
on bank committees.

                               EXECUTIVE OFFICERS

         The following persons serve as executive officers of the Company:
<TABLE>
<CAPTION>

                       NAME                    AGE                            POSITION

<S>                                             <C>      <C>
          Charles A. Barnes                     54       Vice President of the Company; President of First
                                                         Citizens Bank of Georgia; previously President of
                                                         Tara State Bank

          Douglas J. Hertha                     40       Vice President, Secretary  and Chief Financial
                                                         Officer of the Company; Vice President and Chief
                                                         Financial Officer of First Citizens Bank
</TABLE>


             SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's reporting officers and directors and
persons who own more than ten percent of the Company's Common Stock to file
reports of ownership and changes in ownership on Forms 3, 4 and 5 with the
Securities and Exchange Commission (the "Commission") and the Company. Based
solely on its review of the forms filed with the Commission and representations
from the Company's directors and executive officers, the Company believes that
its executive officers, directors and greater than ten percent beneficial owners
complied with all filing requirements applicable to them during the fiscal year
ended March 31, 1999.


                                       22
<PAGE>


ITEM 11. EXECUTIVE COMPENSATION

                           SUMMARY COMPENSATION TABLE

         The following information is furnished for the Company's executive
officers who earned over $100,000 in salary and bonus during the fiscal year
ended March 31, 1999.

<TABLE>
<CAPTION>

======================================================================================================================
                           SUMMARY COMPENSATION TABLE
----------------------------------------------------------------------------------------------------------------------
                                                                                      LONG-TERM
                             ANNUAL COMPENSATION                                    COMPENSATION
                                                                                  -----------------
                                                                                       AWARDS
----------------------------------------------------------------------------------------------------------------------
                                                                  OTHER ANNUAL                          ALL OTHER
   NAME AND PRINCIPAL                    SALARY       BONUS       COMPENSATION        OPTIONS         COMPENSATION
        POSITION             YEAR          $            $            ($)(1)             (#)              ($)(2)
----------------------------------------------------------------------------------------------------------------------
<S>                          <C>        <C>          <C>              <C>                <C>             <C>
Thomas J. Moat,              1999       $175,260     $30,531          $--                --              $7,048
President and Chief          1998       $166,000     $36,891          $--                --              $3,297
Executive Officer            1997       $156,000     $49,723          $--                --              $2,490
----------------------------------------------------------------------------------------------------------------------
                             1999       $143,826     $20,863          $--                --              $5,393
Charles M. Barnes,           1998       $139,825     $26,142          $--                --              $4,414
Vice President               1997       $125,400     $12,000          $--                --              $5,740
----------------------------------------------------------------------------------------------------------------------
Douglas J. Hertha,           1999       $101,056     $22,980          $--                --              $5,378
Vice President, Chief        1998       $92,000      $24,710          $--                --              $3,249
Financial Officer and        1997       $81,146      $17,574          $--                --              $1,667
Secretary
----------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Does not include perquisites which did not exceed the lesser of $50,000 or
    10% of salary and bonus.

(2) Represents premiums paid by the Corporation on a disability insurance policy
    and contributions made to the Corporation's 401(k) plan.


OPTION EXERCISES AND HOLDINGS

         The following table sets forth information concerning the number of
stock options held by the named executive officers.

                                       23
<PAGE>
<TABLE>
<CAPTION>

================================================================================================================
                                AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                                        AND FISCAL-YEAR END OPTION VALUES
----------------------------------------------------------------------------------------------------------------
                                                     AS OF DATE
                                                     EXERCISED                            VALUE OF UNEXERCISED
                                                       MINUS                                  IN-THE-MONEY
                                                    AMOUNT PAID           NUMBER OF             OPTIONS AT
                            SHARES ACQUIRED ON         VALUE             UNEXERCISED          FY-END ($)(1)
                                 EXERCISE             REALIZED           OPTIONS AT           EXERCISABLE/
          NAME                     (#)                  ($)               FY-END(#)           UNEXERCISABLE
----------------------------------------------------------------------------------------------------------------
<S>                                 <C>                  <C>               <C>                <C>         <C>
Thomas J. Moat                    - 0 -                - 0 -               47,250             1,267,800 / 0
----------------------------------------------------------------------------------------------------------------
Charles M. Barnes                 - 0 -                - 0 -                - 0 -                 - 0 -
----------------------------------------------------------------------------------------------------------------
Douglas J. Hertha                 16,500              459,350               7,500              180,600 / 0
----------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Assuming market price per share of $38.00 at March 31, 1999.


             COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

         This report discusses the compensation objectives and policies
applicable to the Company's executive officers and its policy generally with
respect to the compensation of all executive officers as a group for the fiscal
year ending March 31, 1999.

COMPENSATION PHILOSOPHY

         The Company's executive compensation program has two objectives: (1) to
attract and retain highly talented and productive executives, and (2) to provide
incentives for superior performance. To achieve these objectives, the executive
compensation program consists of base salary and incentive compensation in the
form of a cash bonus and stock options. These compensation elements are in
addition to the general benefit programs that are offered to all of our
employees.

         In determining the amount and type of compensation to be awarded to
executive officers, we study the compensation packages for executives of a peer
group of the Company's most direct publicly held competitors for executive
talent, assess the competitiveness of our executive compensation program and
review the Company's financial performance for the previous year. We also gauge
our success in achieving the compensation program's objectives in the previous
year and consider the Company's overall performance objectives. Each element of
our executive compensation program is discussed below.

BASE SALARIES

         Base salaries for our executive officers for the year ending March 31,
1999 are reflected in the Summary Compensation Table. In addition to the factors
described above that support our executive compensation program generally, we
evaluate subjectively the responsibilities of the


                                       24
<PAGE>
specific executive position and the individual executive's experience and
knowledge in determining his salary. Salaries are not based upon the achievement
of any predetermined performance targets.

INCENTIVE COMPENSATION

         The Company's incentive compensation is based upon the payment of cash
bonuses and the incentive stock option plan. We believe that placing a portion
of executives' total compensation in the form of stock options achieves three
objectives. It aligns the interest of our executives directly with those of our
shareholders, gives executives a significant long-term interest in the Company's
success and helps us retain key executives. In determining the number and terms
of options to grant an executive, we primarily consider subjectively the
executive's past performance and the degree to which an incentive for long-term
performance would benefit the Company.

BENEFITS

         We believe we must offer a competitive benefits program to attract and
retain key executives. We provide the same medical and other benefits to our
executive officers that are generally available to our other employees.

COMPENSATION OF THE CHIEF EXECUTIVE OFFICER

         We based our Chief Executive Officer's 1999 salary and stock options on
our review of the compensation packages for chief executive officers of our most
direct competitors and on our subjective assessment of his experience, knowledge
and abilities. We have based salary adjustments and bonuses on the same elements
and measures of performance as we review in determining the compensation for our
other executive officers. Aside from the incentives inherent in the grant of
stock options, we do not directly tie our Chief Executive Officer's compensation
to the Company's performance.

SECTION 162(M) OF THE INTERNAL REVENUE CODE

         It is our responsibility to address the issues raised by Section 162(m)
of the Internal Revenue Code, as amended. The revisions to Section 162(m) made
certain non-performance based compensation in excess of $1,000,000 to executives
of public companies non-deductible to the companies beginning in 1994. We have
reviewed these issues and have determined that no portion of compensation
payable to any executive officer for 1998 is non-deductible.

Submitted by:                               THE COMPENSATION COMMITTEE

                                            /s/ Ellis A. Mansour
                                            /s/ Don a. Barnette
                                            /s/ J. L. Glover, Jr.
                                            /s/ Thomas B. Chandler

                                       25

<PAGE>


                                PERFORMANCE GRAPH

         The following Performance Graph compares the yearly percentage change
in the cumulative total shareholder return on the Company's common stock to the
cumulative total return on the S&P 500 Index, the S&P Bank Index and the Nasdaq
Bank Stock Index from April 1, 1996 through the last trading day of each
succeeding fiscal year through March 31, 1999.





Date           FSTC         S & P 500   S & P BANK       NASDAQ
4/1/96         100          100           100              100
5/31/96        103.125      102.354       98.606           100.858
6/3/96         109.375      102.134       98.52            101.012
8/1/96         113.542      99.432        99.256           101.557
10/1/96        126.042      105.407       109.162          108.905
12/2/96        140.625      115.73        127.276          119.764
2/3/97         130.208      120.345       132.912          127.612
4/1/97         129.167      116.201       129.758          129.791
6/2/97         137.5        129.466       136.825          140.693
8/1/97         159.375      144.882       159.871          163.017
10/1/97        188.542      146.147       165.576          180.159
12/1/97        200          149.109       172.095          186.643
2/2/98         254.167      153.163       167.846          192.695
4/1/98         279.167      169.512       192.151          211.438
6/1/98         258.333      166.885       190.204          206.788
7/31/98        241.667      171.427       196.68           191.901
10/1/98        229.167      150.886       145.786          158.195
12/1/98        216.667      179.781       175.681          172.219
2/1/99         316.667      194.729       173.607          168.611


ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

                        PRINCIPAL HOLDERS OF COMMON STOCK

         The following table sets forth, as of June 11, 1999, the shares of
Common Stock beneficially owned by 5% stockholders, all executive officers and
directors as a group, and by all executive officers, directors and 5%
stockholders of the Company as a group. Individual beneficial ownership of
shares by the Company's directors is set forth under "Directors." Persons and
groups owning in excess of 5% of the Common Stock are required to file certain
reports with the 1934 Act.


<TABLE>
<CAPTION>

               NAME AND ADDRESS                   AMOUNT AND NATURE OF                PERCENT OF SHARES OF
             OF BENEFICIAL OWNER                BENEFICIAL OWNERSHIP (1)            COMMON STOCK OUTSTANDING
             <S>                                                <C>                          <C>
    Donald A. Barnette
    Building K
    Atlanta State Farmers Market
    Forest Park, GA  30051                         209,274                                    7.13

    J. L. Glover, Jr.
    10 Brown Street
    Newnan, GA  30263                              170,108                                    5.74

    Ellis A. Mansour
    6 East Court Square
    Newnan, Georgia 30263                          157,127                                    5.28

    All Executive Officers and
    Directors as Group (8 persons)                 669,555(2)(3)                             21.91
    Dennis H. McDowell
    P. O. Box 858
    Carrollton, GA  30117                          202,042(4)                                 6.88

    All Executive Officers,
    Directors and 5% Stockholders
    as a Group (9 persons)                         750,933(2)(3)                             28.53

</TABLE>

                                       26
<PAGE>


--------------------
(1)      Includes certain shares owned by spouses, or as custodian or trustee
         for minor children, over which shares officers and directors exercise
         sole or shared voting and investment power, unless otherwise indicated.

(2)      Includes options for 54,750 shares of the Company's stock exercisable
         within 60 days under the Company's 1986 Stock Option Plan.

(3)      Includes options for 65,914 shares of the Company's stock exercisable
         within 60 days under the Company's 1992 Nonqualified Stock Option Plan
         for Outside Directors.

(4)      Based on records maintained by the Company and information from a
         Schedule 13D filed by Mr. McDowell on November 15, 1991. There have
         been no amended filings received by the Company. Accordingly to the
         Schedule 13D, Mr. McDowell exercises sole voting and investment
         authority over these shares.


ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The Company's directors and officers and certain business organizations
and individuals associated with them have been customers of and have had banking
transactions with the Company's subsidiary banks and are expected to continue
such relationships in the future. Pursuant to such banking transactions, from
time to time these individuals and organizations have borrowed funds from the
Company's subsidiary banks for various business and personal reasons. These
extensions of credit were approved by the Board of Directors, were made in the
ordinary course of business and on substantially the same terms, including
interest rates and collateral, as those of comparable transactions with
unrelated parties prevailing at the time and do not involve more than the normal
risk of collectibility or present other unfavorable features.

J. L. Glover, Jr., Chairman of the Board and a director of the Company, is an
attorney and President of the law firm of Glover & Davis, P.A., which serves as
legal counsel for the Company and its subsidiaries. The firm furnishes title
opinions on parcels of land and related improvements in Coweta County and
adjacent counties which collateralize certain loans granted by the Company's
subsidiaries. The Company accepts title opinions on properties located in Coweta
County from all local practicing attorneys provided they furnish the Company
with evidence of a $1 million lawyers' title insurance errors and omissions
policy or in lieu of such coverage, furnish the Company with a title policy for
each title opinion. Title examination fees are paid by the Company from the loan
proceeds payable to the borrower or paid directly by the borrower. The fee
charged for this opinion is negotiable between the borrower and his attorney.
Fees paid by the Company to Glover & Davis, P.A. for all services rendered by
Glover & Davis, P.A. to the Company are comparable to those paid by the Company
in similar transactions with nonaffiliates.


                                       27
<PAGE>


ITEM 14.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K


<TABLE>
<CAPTION>
         <S>             <C>                              <C>

         (a)      Financial Statements

                  [TO BE INSERTED]
         (b)      Reports on Form 8-K:

                  Report on Form 8-K filed February 8, 1999, announcing the
                  Company's letter of intent to merge with BB&T Corporation.

         (c)      Exhibits

                 EXHIBIT NO.             DESCRIPTION

                 2.1                     Plan of Reorganization, dated as of  December 14, 1995,
                                         among the Registrant, Newnan Savings Bank, FSB
                                         and Interim Newnan FSB, included as Appendix A to the Proxy
                                         Statement and Prospectus set forth in Part I
                                         of the Registration Statement.(1)

                 2.2                     Agreement and Plan of Merger, dated as of November 2, 1995,
                                         among the Registrant, Newnan Savings Bank, FSB,
                                         Southside Financial Group, Inc., Citizens Bank and Trust of
                                         Fayette County and Interim Citizens Corporation, and
                                         Amendment No. 1 thereto, included as Appendix B to the
                                         Proxy Statement and Prospectus set forth in Part I of the
                                         Registration Statement.(1)

                 2.3                     Agreement and Plan of Merger, dated as of November 21, 1996, as
                                         amended, between the Registrant and Tara Bankshares Corporation. (2)

                 2.4                     Agreement and Plan of Merger, dated as of January 26, 1999, between the
                                         Registrant and BB&T Corporation. (9)

                 3.1                     Articles of Incorporation of the Registrant. (6)

                 3.2                     Bylaws of the Registrant. (3)

                10.1                     1986 Stock Option and Incentive Plan of Newnan Savings
                                         Bank, FSB. (3)(4)

                10.2                     Nonqualified Stock Option and Incentive Plan of Newnan Savings
                                         Bank, FSB. (3) (4)

                10.3                     Form of Non-Competition Covenant executed by the Directors of Southside
                                         Financial Group, Inc. (3) (4)
</TABLE>


                                       28


<PAGE>

<TABLE>
<CAPTION>
                <S>                                             <C>

                10.4                    Employment Agreement, dated as of April 9, 1997, between
                                        Tara State Bank and Charles M. Barnes. (4) (5)

                10.5                    Indexed Executive Salary Continuation Plan, dated August 7,
                                        1995, between Tara State Bank and Charles M. Barnes. (4) (5)

                10.6                    Employment Agreement, dated as of January 1, 1998,
                                        between First Citizens Corporation and Tom Moat. (4) (8)

                10.7                    Form of Non-Competition Covenant executed by the
                                        Directors of Tara Bankshares Corporation. (4) (8)

                10.8                    First Citizens Corporation Employee Stock Purchase Plan,
                                        adopted June 24, 1997. (4) (7).

                10.9                    First Citizens Corporation Directors' Deferred Plan, dated
                                        June 19, 1997. (4) (8)

                21.1                    Subsidiaries of the Registrant.

                23.1                    Consent of Mauldin & Jenkins, LLC.

                                        A Power of Attorney relating to this Report is set forth on the
                24.1                    signature pages to this Report.

                27.1                    Financial Data Schedule (for SEC use only)
</TABLE>

--------------
(1)      Incorporated by reference to the Registration Statement on Form S-4
         (No. 333-4304) filed with the SEC on July 1, 1996.

(2       Incorporated by reference to the Form 8-K filed with the SEC on
         April 25, 1997.

(3)      Incorporated by reference to the exhibit of the same number in the
         Registration Statement on Form S-4(No.333-4304) filed with the SEC on
         July 1, 1996.

(4)      Management contract or compensatory plan or arrangement.

(5)      Incorporated by reference to Exhibit 10.3 in the Annual Report on Form
         10-KSB for the year ended December 31, 1995 filed by Tara Bankshares
         Corporation with the SEC.

(6)      Incorporated by reference to the Form 10-KSB filed with the SEC on
         June 30, 1997.

(7)      Incorporated by reference to Appendix A of the Proxy Statement filed
         with the SEC on July 10, 1997.

(8)      Incorporated by reference to the Form 10-KSB filed with the SEC on
         June 30, 1998.

                                       29
<PAGE>


(9)      Incorporated by reference to the Registration Statement on Form S-4
         filed by BB&T Corporation with the SEC on May 19, 1999.





















                                       30

<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Form 10-K to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Newnan, State of Georgia, on the 29 day of June, 1999.

                                                     FIRST CITIZENS CORPORATION


                                                     By:/s/ Thomas J. Moat
                                                        ------------------------
                                                            Thomas J. Moat
                                                            President


                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below, constitutes and appoints J. Littleton Glover, Jr., and Thomas J.
Moat, or either of them, as his or her attorneys-in-fact, acting with full power
of substitution, in his or her name, place and stead, in any and all capacities,
to sign any amendments to this Report and to file the same, with exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission and hereby ratifies and confirms all that said
attorneys-in-fact, or their substitute or substitutes, may do or cause to be
done by virtue thereof.

         Pursuant to the requirements of the Exchange Act, this Form 10-K has
been signed by the following persons in the capacities and on the dates
indicated.


<TABLE>
<CAPTION>

        <S>                                  <C>                                   <C>

    SIGNATURE                                TITLE                                  DATE

    /s/ Don A. Barnette                     Director                               June 29, 1999
    ------------------------------
    Don A. Barnette

    /s/ Thomas B. Chandler                  Director                               June 29, 1999
    ------------------------------
    Thomas B. Chandler

    /s/ J. Littleton Glover                 Chairman of the Board                  June 29, 1999
    ------------------------------
    J. Littleton Glover

    /s/ Thomas J. Moat                      President and Director                 June 29, 1999
    ------------------------------
    Thomas J. Moat                          (Principal Executive Officer)

    /s/ Ellis A. Mansour                    Director                               June 29, 1999
    ------------------------------
    Ellis A. Mansour


    /s/ Douglas J. Hertha                   Vice President and Secretary           June 29, 1999
    ------------------------------
    Douglas J. Hertha                       (Principal Financial and
                                            Accounting Officer)

</TABLE>


                                    31