SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549
                                   FORM 10-KSB

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996]

For the fiscal year ended March 31, 1997                OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from ___________ to ____________

Commission File Number: 333-4304

                           FIRST CITIZENS CORPORATION
                        (Formerly Newnan Holdings, Inc.)
        (Exact Name of Small Business Issuer as specified in its Charter)

               Georgia                                     58-2232785
    (State or other jurisdiction                        (I.R.S. Employer
  of Incorporation or Organization)                   Identification Number)

 19 Jefferson Street, Newnan, Georgia                         30263
(Address of Principal Executive Offices)                    (Zip Code)

Registrant's telephone number, including area code: (770) 253-5017

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

Securities  registered  pursuant to Section 12(g) of the Act: Common Stock,  par
value $1.00 per share

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter  period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. 
YES __X__     NO _____

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained  herein,  and no disclosure  will be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [  ]

The  registrant's  revenues  for the  fiscal  year  ended  March  31,  1997 were
$21,167,848.

The  aggregate  market  value of the voting stock held by  nonaffiliates  of the
registrant, based on the closing sales price of the registrant's common stock as
quoted  on the  National  Association  of  Securities  Dealers,  Inc.  Automated
Quotation  National  Market System under the symbol "FSTC" on May 31, 1997,  was
$30,620,150 (1,224,806 shares at $25 per share).

As of June 1, 1997,  there were issued and outstanding  1,829,375 shares of the
registrant's Common Stock.

<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the  Registrant's  1997 Annual Report to  Shareholders  (the "Annual
Report") are  incorporated  by reference  into Parts I and II of this report and
portions of the  Registrant's  Proxy  Statement (the "Proxy  Statement") for the
1997 Annual Meeting of Shareholders  are incorporated by reference into Part III
of this report.


                                      -2-
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                      Page

<S>                                                                                                                    <C>
PART I   .............................................................................................................  4

     Item 1.  Business................................................................................................  4

     Item 2.  Properties.............................................................................................. 20

     Item 3.  Legal Proceedings....................................................................................... 22

     Item 4.  Submission of Matters to a Vote of Security Holders..................................................... 22

PART II............................................................................................................... 23

     Item 5.  Market for the Registrant's Common Stock and Related Security Holder
                 Matters.............................................................................................. 23

     Item 6.  Management's Discussion and Analysis of Results of Operations and
                 Financial Condition.................................................................................. 23

     Item 7.  Consolidated Financial Statements....................................................................... 23

     Item 8.  Changes in and Disagreements with Accountants on Accounting and
                 Financial Disclosure................................................................................. 23

PART III.............................................................................................................. 25

     Item 9.  Directors, Executive Officers, Promoter and Control Persons; Compliance
                 with Section 16(a) of the Exchange Act............................................................... 25

     Item 10.  Executive Compensation................................................................................. 25

     Item 11.  Security Ownership of Certain Beneficial Owners and Management......................................... 25

     Item 12.  Certain Relationships and Related Transactions......................................................... 25

PART IV............................................................................................................... 26

     Item 13.  Exhibits, List and Reports on Form 8-K................................................................. 26

SIGNATURES............................................................................................................ 28
</TABLE>


                                      -3-
<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 three  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, Inc., the parent company of Citizens Bank
and  Trust of  Fayette  County  (now  known as First  Citizens  Bank of  Fayette
County), issuing 136,990 shares to Southside shareholders.  As of March 31, 1997
the Company acquired all the outstanding  stock of Tara Bankshares  Corporation,
the parent  company of Tara State Bank,  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 May 15, 1997, the Tara State
Bank  Board of  Directors  voted to change  its name to First  Citizens  Bank of
Clayton County and that application is currently pending regulatory approval.

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 seven
offices in Newnan, Peachtree City, LaGrange, and Hogansville, Georgia.

First  Citizens  Bank  of  Fayette  County  is a  full-service  state  chartered
commercial bank located in Fayetteville,  Georgia.  It was chartered in 1991 and
maintains one office.

Tara State Bank is also a full-service  state chartered  commercial bank located
in Riverdale, Georgia. It was chartered in 1984 and maintains a branch office in
Jonesboro, Georgia.

The Company offers mortgage banking  services  through Citizens  Mortgage Group,
Inc., an operating subsidiary of First Citizens  Bank-Newnan.  Citizens Mortgage
Group was  organized  in 1993 and  presently  has loan  origination  offices  in
Fayetteville, Stockbridge, and Jefferson, Georgia.

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.


                                      -4-
<PAGE>

Selected Consolidated Financial Data

The information  contained in the table captioned  "Selected  Financial Data" on
page 6 of the Company's Annual Report is incorporated herein by reference.

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  60%, 25%, 10% and 5%,  respectively,  of the Company's total
loans at March 31, 1997 and 87%, 9%, 1% and 3%,  respectively,  at March
31, 1996.  Information  with respect to the  composition  of the Company's  loan
portfolio  by type of loan is  contained  on page 13 of the  Company's  Annual
Report and is incorporated herein by reference.  Information with respect to the
dollar  amounts of loans  maturing in the Company's loan and loans held for sale
portfolio  based on  contractual  terms to maturity is contained on page 13 of
the Company's Annual Report and is incorporated herein by reference.

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, 1997, approximately 35.5% 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%. Nonowner 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.


                                      -5-
<PAGE>

Commercial  property  loans,  including  loans secured by multifamily  apartment
projects  with  more  than  four  units,  constituted  approximately  13% of the
Company's loan portfolio at March 31, 1997. These loans are typically secured by
improved real estate located in the Company's  primary  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,
potentially  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  amount  necessary  to pay the  Company's
indebtedness in full.

Construction  Loans.  The Company  provides  construction  financing  for single
family dwellings.  At March 31, 1997, the Company had construction loans (net of
undisbursed amounts) of approximately 25% 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  builder's 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


                                      -6-
<PAGE>

through liens placed against the property or by complaints  received directly by
the supplier or  subcontractor  involved.  In these  instances,  the Company can
address the situation by ceasing to advance  additional  funds until the problem
is resolved, and if necessary, ultimately foreclose 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  Fayette  County or by Tara
State  Bank.  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, 1997, consumer loans
(which  include  second  mortgage  loans and home  improvement  loans) and other
secured consumer loans amounted to approximately 7% of the Company's


                                      -7-
<PAGE>

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  profitable  spread  between the Company's  average loan
yield and its cost of funds.

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, 1997,  the Company sold $55.7  million of loans as compared
to $44.2 million during the comparable period in 1996.

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.  The  Financial  Accounting
Standards  Board in December 1986 issued  Statement No. 91 on the accounting for
nonrefundable  fees and costs associated with originating or acquiring loans. To
the  extent  that  loans are  originated  or  acquired  for the  portfolio,  the
statement limits  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, 1997, was $987,503.

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. These fees and
charges have not constituted a material source of income.

Problem  Assets  and  Their  Classification.  Information  with  respect  to the
Company's  non-performing assets at March 31, 1997, 1996, 1995, 1994 and 1993
is set forth on page 8 in the Company's Annual Report and is incorporated
herein by reference.


                                      -8-
<PAGE>

An analysis of the Company's allowance for loan losses for the years ended March
31, 1997,  1996,  1995, 1994, and 1993 is included on page 9 of the Company's
Annual Report and is incorporated herein by reference.

Information  with respect to the  allocation of the allowance for loan losses by
type of loan as of  March  31,  1997  and  1996  is  found  on page 9 in the
Company's  Annual Report and is  incorporated  herein by  reference.  Management
believes that the allowance can be allocated by category only on an  approximate
basis.  The  allocation  of the  allowance to each  category is not  necessarily
indicative  of future  losses and does not restrict the use of the  allowance to
absorb losses in any category.  The Board of Directors  establishes an allowance
for loan losses each year based on  recommendations  of management.  As of March
31, 1997 the allowance for losses on loans was 1.54% 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 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, 1997,
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 investment  securities  generally provide
the second largest  source of income for the Company after interest  payments on
loans.  At  March  31,  1997,  the  Company's  investment  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).  For additional information concerning
the  Company's  investment  securities  portfolio,  see  Note  2  of  "Notes  to
Consolidated Financial Statements" on page 23 of the Company's Annual Report.

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.  Information  with respect to
the Company's  liquidity  levels is found on page 13 in the  Company's  Annual
Report and is incorporated herein by reference.

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.


                                      -9-
<PAGE>

A  summary  of  time deposits  by  maturity  as of  March  31,  1997  is
incorporated  by  reference  to  Note  5 of  "Notes  to  Consolidated  Financial
Statements" on page 24 of the Company' s Annual Report.

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
Citizens Bank of Fayette County. 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 Fayette County 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.

Information  with respect to short term  borrowings can be found on page 13
in the Company's Annual Report and is incorporated herein by reference.

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.

For yield and rate  information,  refer to Table 1,  "Analysis  of Net  Interest
Income," on page 6 of the Company's Annual Report which is incorporated herein
by reference.

Information  regarding changes in interest income and expense for the Company is
provided in Table 2,  "Analysis of Changes in Net Interest  Income," on page 6
of the Company's Annual Report and is incorporated herein by reference.

Information  with respect to certain  performance  ratios of the Company for the
years ended  March 31,  1997 and 1996 can be found on page 4 of the  Company's
Annual Report and is incorporated herein by reference.

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  institutions  meeting
regulatory capital  requirements and certain scheduled items tests may invest up
to 50% of their current


                                      -10-
<PAGE>

risk-based  capital in conforming first mortgage loans to service  corporations.
Under  such  limitations,  at March 31,  1997  First  Citizens  Bank-Newnan  was
authorized  to invest up to  approximately  $9.808  million  in the stock of, or
loans to, service corporations.  As of March 31, 1997, the net book value of the
Company's  investment in stock,  loan guarantees,  unsecured loans, and loans to
its service  corporations under GAAP was approximately  $150,000.  The Company's
investments in its subsidiaries continues to be less than the limit permitted by
OTS regulations, meeting such limitation by $9.658 million at March 31, 1997.

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  1,700 acres of the 3,500  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.   Additional  information
concerning the Company's real estate development  activities is provided on page
10 of the Company's Annual Report and is incorporated herein by reference.

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

Personnel

As of March 31, 1997 the Company had 138  full-time  equivalent  employees.  The
employees are not represented by a collective bargaining agreement.  The Company
believes its employee relations are good.

Strategic Plan

A substantial  portion of the growth of the Company  during fiscal 1997 has been
through the acquisition of other financial institutions.  As part of its ongoing
strategic  plan,  the  Company   continually   evaluates  business   combination
opportunities  and  frequently  conducts due diligence  activities in connection
with  possible  business  combinations.   As  a  result,   business  combination
discussions  and, in some case,  negotiations  take place,  and future  business
combinations  involving cash,  debt, or equity  securities can be expected.  Any
future business combination or series of business  combinations that the Company
might  undertake  may be material,  in terms of assets  acquired or  liabilities
assumed, to the Company's financial


                                      -11-
<PAGE>

condition.  Recent business  combinations in the banking industry have typically
involved the payment of a premium  over book and market  values.  This  practice
could  result  in  dilution  of book  value  and net  income  per  share for the
acquirer.  It is the Company's  practice to avoid possible dilution except where
projections indicate a relatively short pay back period.

Forward Looking Statements

This Annual Report on Form 10-KSB,  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.

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  statement  speaks  only as of the date the  statement  was  made.  The
Company  undertakes  no  obligation  to  update or revise  any  forward  looking
statements.


                                      -12-
<PAGE>

Supervision and Regulation

Both bank and savings and loan holding  companies,  as well as their  subsidiary
banks and thrifts,  are extensively  regulated under both Federal and state law.
The following is a brief summary of certain  statutes and rules and  regulations
affecting  the Company and the Banks.  This summary is qualified in its entirety
by reference to the  particular  statute and  regulatory  provision  referred to
below and is not  intended to be an  exhaustive  description  of the statutes or
regulations  applicable  to the business of the Company and Banks.  Supervision,
regulation  and  examination  of the  Company  and the  Banks by the  regulatory
agencies are intended  primarily for the  protection  of depositors  rather than
shareholders of 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 Bank
Holding  Company Act of 1956, as amended (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.

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 includes the party's
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 restrictions. The Interstate
Banking Act also  generally  provides  that,  after 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


                                      -13-
<PAGE>

has 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 February  1996,  the Georgia  Legislature  adopted  the  "Georgia  Interstate
Branching  Act" effective  June 1, 1997. The  Georgia  Interstate  Branching Act
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  beginning  July 1, 1996.
Beginning  July 1, 1998, the number of de novo branches which may be established
will no longer be 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.

Each of the Banks is a member of the Federal Deposit Insurance  Corporation (the
"FDIC"), and as such, its deposits are insured by the FDIC to the maximum extent
provided by law.  Each such  subsidiary  is also  subject to numerous  state and
federal  statutes and  regulations  that affect its  business,  activities,  and
operations,  and each is supervised and examined by one or more state or federal
bank regulatory agencies.

All of the Banks that are  state-chartered  banks are subject to supervision and
examination  by the FDIC and the Georgia  Department of Banking and Finance (the
"Georgia  Department").  First Citizens  Bank-Newnan is subject to  regulations,
supervision,  and  examination  by the OTS and the  FDIC.  The  federal  banking
regulator for each of the Banks,  as well as the Georgia  Department for each of
the Banks that is a  state-chartered  bank,  regularly examine the operations of
the  Banks  and  are  given   authority  to  approve  or   disapprove   mergers,
consolidations,  the establishment of branches,  and similar corporate  actions.
The FDIC,  OTS and the  Georgia  Department  also have the power to prevent  the
continuance  or  development  of unsafe or unsound  banking  practices  or other
violations of law.


                                      -14-
<PAGE>

The Banks are subject to the  provisions of the CRA. Under the terms of the CRA,
the Banks 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 Banks 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,  when fully implemented on July
1, 1997, will substitute for the prior  process-based  assessment  factors a new
evaluation system that will rate an institution based on its actual  performance
in meeting community needs. In particular, the system will focus 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.

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

As to payment of dividends,  the two Banks which are organized under the laws of
Georgia  are  subject  to  the  laws  and  regulations  of  Georgia  and  to the
regulations  of the FDIC.  First  Citizens  Bank-Newnan  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


                                      -15-
<PAGE>

"-- 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 March 31, 1997, under dividend  restrictions  imposed under federal and state
laws,  the  Banks,  without  obtaining  governmental  approvals,  could  declare
aggregate dividends to the Company of approximately $1.8 million.

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

Capital  Adequacy.  The  Company  and the Banks 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 banking  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"). At March 31, 1997, the Company's consolidated Total
Risk-Based  Capital  Ratio and its Tier 1 Risk-Based  Capital  Ratio (i.e.,  the
ratio  of Tier 1  Capital  to  risk-weighted  assets)  were  10.29%  and  9.04%,
respectively.

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
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. At March 31, 1997, the Company's Leverage Ratio was
6.70%.


                                      -16-
<PAGE>

The Banks are subject to risk-based and leverage capital requirements adopted by
their  federal  banking  regulators,  which are  substantially  similar to those
adopted by the Federal Reserve for bank holding companies. As of March 31, 1997,
each  of  the  Banks  was  in  compliance   with   applicable   minimum  capital
requirements.  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  a bank 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."

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 banking  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 banking  subsidiary 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 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 banking 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.


                                      -17-
<PAGE>

The capital levels established for each of the categories are as follows:

<TABLE>
<CAPTION>
===============================================================================================================================
                                                                    Total                 Tier 1 Risk-
        Capital Category                Tier 1 Capital        Risk-Based Capital          Based Capital            Other
===============================================================================================================================
<S>                                      <C>                     <C>                        <C>                  <C>
Well Capitalized                         5% or more              10% or more                6% or more           Not subject
                                                                                                                 to a 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 Undercapitalized              2% or less                         --                        --                 --
                                         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  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, 1997,  each  subsidiary  bank had the requisite  capital  levels to
qualify as well capitalized,  except First Citizens  Bank-Newnan.  Such Bank had
the  requisite  capital  level to qualify as well  capitalized  under two of the
three ratios,  and as adequately  capitalized  under the third ratio because its
Total Risk-Based Capital Ratio was 9.46% instead of 10%.

FDIC  Insurance  Assessments.  Pursuant  to  FDICIA,  the  FDIC  adopted  a  new
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 new  system,  which went into effect on January 1,
1994,  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


                                      -18-
<PAGE>

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  final  risk-based  assessment  system,  as well as the  prior  transitional
system,  there are nine assessment risk classifications  (i.e.,  combinations of
capital groups and supervisory  subgroups) to which different  assessment  rates
are  applied.  Assessment  rates for  members  of both the Bank  Insurance  Fund
("BIF") and the Savings  Association  Insurance Fund ("SAIF") for the first half
of  1995,  as they had  during  1994,  ranged  from 23 basis  points  (0.23%  of
deposits) for an institution in the highest category (i.e.,  "well  capitalized"
and  "healthy") to 31 basis points (0.31% of deposits) for an institution in the
lowest  category  (i.e.,   "undercapitalized"   and   "substantial   supervisory
concern").  These rates were  established for both funds to achieve a designated
ratio of reserves to insured deposits (i.e., 1.25%) within a specified period of
time.

Once the designated  ratio for the BIF was reached in May 1995, the FDIC reduced
the assessment rate applicable to BIF deposits in two stages, so that, beginning
1996, the deposit  insurance  premiums for 92% of all BIF members in the highest
capital and supervisory  categories  were set at $2,000 per year,  regardless of
deposit size. The FDIC elected to retain the existing  assessment  rate range of
23 to 31 basis points for SAIF members given the undercapitalized nature of that
insurance fund.

Recognizing  that the  disparity  between  the SAIF and BIF  premium  rates  had
adverse  consequences  for  SAIF-insured  institutions and other banks with SAIF
assessed  deposits,  including reduced earnings and an impaired ability to raise
funds in capital  markets and to attract  deposits,  on July 28, 1995, the FDIC,
the  Treasury  Department,   and  the  Office  of  Thrift  Supervision  released
statements  outlining a proposed plan to  recapitalize  the SAIF,  the principal
feature of which was a special  one-time  assessment on depository  institutions
holding SAIF-insured deposits,  which was intended to recapitalize the SAIF at a
reserve ratio of 1.25%. This proposal contemplated  elimination of the disparity
between the assessment rates on BIF and SAIF deposits following recapitalization
of the SAIF.

A variation of this proposal  designated the Deposit Insurance Funds Act of 1996
(the  "Funds  Act")  was  enacted  by  Congress  as part of the  omnibus  budget
legislation  and signed into law on September 30, 1996. As directed by the Funds
Act, 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).  Additional  information
concerning the impact of the SAIF  assessment on the Company is included on page
11 of the Company's Annual Report and is incorporated herein by reference.

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.


                                      -19-
<PAGE>

Proposed  Legislation  and Regulatory  Action.  New regulations and statutes are
regularly  proposed  which  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
regulation or statute will be adopted or the extent to which the business of the
Company may be affected by such regulation or statute.


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, 1997.

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


                                         Year Facility
                                           Commenced                   Leased
Office Location                            Operation                  or Owned
---------------                            ---------                  --------
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 Hwy. 54, East
Peachtree City, Georgia

White Oak Branch                             1987                      Leased
1421 Hwy. 34, East
Newnan, Georgia

LaGrange Branch                              1988                      Owned
310 Broad Street
LaGrange, Georgia

Hogansville Branch                           1988                      Owned
410 East Main Street
Hogansville, Georgia


                                      -20-
<PAGE>

                                         Year Facility
                                           Commenced                   Leased
Office Location                            Operation                  or Owned
---------------                            ---------                  --------
Hospital Road Branch                         1989                      Owned
14 Hospital Road
Newnan, Georgia

Closed Branch Facility                        NA                       Owned
461 Highway 29 North
Newnan, Georgia

Proposed Branch Site                          NA                       Owned
Highway 154
Sharpsburg, Georgia

First Citizens-Fayetteville(1)

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

Tara State Bank(2)

Main Office                                  1984                      Owned
6375 Highway 85
Riverdale, Georgia 30274

Jonesboro Office                             1986                      Owned
223 North Main Street
Jonesboro, Georgia 30236

Citizens Mortgage Group, Inc.

Jefferson, Georgia                           1993                      Leased
1874 Washington Street
Jefferson, Georgia 30549

Stockbridge, Georgia                         1996                      Leased
175 Corporate Center Drive
Suite B
Stockbridge, Georgia 30281

Fayetteville, Georgia                        1996                      Leased
205 Jeff Davis Place
Fayetteville, Georgia 30214

----------
(1)  Acquired by the Company in 1996.

(2)  Acquired by the Company in 1997.


                                      -21-
<PAGE>

Item 3. Legal Proceedings

The Company is not involved in any material  pending  legal  proceedings  at the
present time,  other than  nonmaterial  proceedings  arising out of the ordinary
course of its business.


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

No  matters  were  submitted  to a vote of  security  holders  during the fourth
quarter of the fiscal year ended March 31, 1997.


                                      -22-
<PAGE>

                                     PART II

Item 5. Market for the  Registrant's  Common Stock and Related  Security  Holder
Matters

The information  contained in the section captioned "Stock Prices and Dividends"
on page 34 of the Company's Annual Report is incorporated herein by reference.


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

The information contained in the section captioned "Management's  Discussion and
Analysis of Financial Condition and Results of Operations" on pages 5 through
16 of the Company's Annual Report is incorporated herein by reference.


Item 7. Consolidated Financial Statements

The consolidated financial statements and independent auditors' report contained
on pages 17 through 33 of the  Company's  Annual  Report are  incorporated
herein by reference.


Item  8.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure

On March 11, 1997 the Company  filed a Form 8-K dated March 4, 1997,  which form
was  amended on March 24,  1997.  The  purpose of the Form 8-K was to disclose a
change in auditors for the Company.

On March 4,  1997,  the  Company's  Audit  Committee  of the Board of  Directors
elected to dismiss KPMG Peat Marwick LLP as the  independent  auditors of Newnan
Savings Bank, FSB, a wholly-owned  subsidiary of the Company. That same day, the
Company engaged Mauldin & Jenkins,  LLC to replace KPMG Peat Marwick LLP.
Pursuant to Item 302 of  Regulation  S-B, the Company  discloses  the  following
information:

1.   KPMG Peat Marwick LLP was dismissed on March 4, 1997.

2.   The report prepared by KPMG Peat Marwick LLP on the consolidated  financial
     statements of Newnan  Savings  Bank,  FSB and  subsidiaries  for the fiscal
     years ending March 31, 1996 and 1995 did not contain an adverse  opinion or
     disclaimer  of  opinion,  nor was the report  qualified  or  modified as to
     uncertainty, audit scope or accounting principles.

3.   The decision to dismiss KPMG Peat Marwick LLP was  recommended and approved
     by the Audit Committee of the Board of Directors.

4.   There were no  disagreements  with KPMG Peat  Marwick  LLP on any matter of
     accounting   principles  or  practices,   financial  statement  disclosure,
     auditing  scope or  procedure  or any  other  matter  requiring  disclosure
     pursuant to Item 304 of Regulation S-B.


                                      -23-
<PAGE>

In a letter to the  Securities  and Exchange  Commission,  KPMG stated that they
agreed with the  representations  of the Company  except that they were not in a
position to agree or disagree with the Company's assertions in number 3 above.


                                      -24-
<PAGE>

                                    PART III

Item 9. Directors,  Executive Officers, Promoter and Control Persons; Compliance
with Section 16(a) of the Exchange Act

The information  contained in the section  captioned  "Election of Directors" in
the Company's Proxy Statement is incorporated herein by reference.

The information  contained in the section captioned  "Executive  Compensation --
Section 16(a) Beneficial Ownership Reporting  Compliance" in the Company's Proxy
Statement is incorporated herein by reference.


Item 10. Executive Compensation.

The information  contained in the section captioned "Executive  Compensation" in
the Company's Proxy Statement is incorporated herein by reference.


Item 11. Security Ownership of Certain Beneficial Owners and Management

The information contained in the sections captioned "Principal Holders of Common
Stock"  and  "Election  of  Directors"  in  the  Company's  Proxy  Statement  is
incorporated herein by reference.

Management of the Company knows of no arrangements,  including any pledge by any
person of securities of the Company,  the operation of which may at a subsequent
date result in a change in control of the registrant.


Item 12. Certain Relationships and Related Transactions

The  information  contained  in the  section  captioned  "Transactions  with the
Corporation"  in  the  Company's  Proxy  Statement  is  incorporated  herein  by
reference.


                                      -25-
<PAGE>

                                     PART IV

Item 13. Exhibits, List and Reports on Form 8-K

a.   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)

     3.1                Articles of Incorporation of the Registrant.

     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 to be executed by the
                        Directors of Southside Financial Group, Inc. (3)(4)

     10.4               Employment Agreement, dated as of April 9, 1997, between
                        First Citizens Corporation, Charles M. Barnes, First
                        Citizens Bank of Fayette County and Tara State Bank.

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


     11.1               Statement regarding computation of per share earnings.

     13.1               1997 Annual Report to Shareholders. (Only those portions
                        of the Annual Report that are specifically incorporated
                        by reference herein shall be deemed filed with the SEC.)

     22.1               Subsidiaries of the Registrant.


                                      -26-
<PAGE>

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

     27.1               Financial data schedule (for SEC use only)

     99.1               Report of KPMG Peat Marwick LLP.

     ----------
     (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.

b. Reports on Form 8-K

A Form 8-K dated  April  10,  1997 was  filed on April  25,  1997 to report  the
acquisition  of Tara  Bankshares  Corporation.  This  Form 8-K was  subsequently
amended on June 25,  1997 to include  financial  statements  of Tara  Bankshares
Corporation and proforma financial statements for First Citizens Corporation and
Tara Bankshares Corporation.


                                      -27-
<PAGE>

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934 (the  "Exchange  Act"),  the  Registrant  has duly  caused this Form
10-KSB to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Riverdale, State of Georgia, on the 25th day of June, 1997.


                                        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-KSB has been
signed by the following persons in the capacities and on the dates indicated.


<TABLE>
<CAPTION>
            Signature                                 Title                           Date
            ---------                                 -----                           ----


<S>                                           <C>                                <C> 
/s/ Don A. Barnette                           Director                           June 25, 1997
--------------------------------
Don A. Barnette


/s/ Thomas B. Chandler                        Director                           June 25, 1997
--------------------------------
Thomas B. Chandler


/s/ J. Littleton Glover, Jr.                  Chairman of the Board              June 25, 1997
--------------------------------
J. Littleton Glover, Jr.
</TABLE>


                                      -28-
<PAGE>

<TABLE>
<CAPTION>
            Signature                                 Title                           Date
            ---------                                 -----                           ----


<S>                                           <C>                                <C>
/s/ Thomas J. Moat                            President and Director             June 25, 1997
--------------------------------              (Principal Executive
Thomas J. Moat                                Officer)



/s/ Ellis A. Mansour                          Director                           June 25, 1997
--------------------------------
Ellis A. Mansour



/s/ Douglas J. Hertha                         Vice President and                 June 25, 1997
--------------------------------              Secretary (Principal Financial
Douglas J. Hertha                             and Accounting Officer)
</TABLE>


                                      -29-