`UNITED STATES
                                        SECURITIES AND EXCHANGE COMMISSION
                                              WASHINGTON, D.C. 20549

                                                     FORM 10-K

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

                                    For the fiscal year ended December 31, 2003

                                                        or

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

                              For the transition period from _________ to __________

Commission file number: 000-50224

                                           SECURITY CAPITAL CORPORATION
                   ----------------------------------------------------------------------------
                              (Exact Name of Registrant as specified in its Charter)

                  MISSISSIPPI                                                   64-0681198
--------------------------------------------------------------  ---------------------------------------------
           (State or Other Jurisdiction of                            (I.R.S. Employer Identification Number)
         Incorporation or Organization)

 295 Highway 6 West/P. O. Box 690, Batesville, Mississippi                      38606
-------------------------------------------------------------    ---------------------------------------------
       (Address of principal executive offices)                                (Zip Code)

Registrant's Telephone Number:               (662) 563-9311
                               ------------------------------------------

                               Securities registered under Section 12(b) of the Act:

                                                                           Name of Each Exchange on
             Title of Each Class                                                Which Registered

                  None                                                                None
-------------------------------------------------------------     -----------------------------------------------

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

                                                                           Name of Each Exchange on
             Title of Each Class                                                Which Registered

         Common Stock, $5 par value                                                   None
------------------------------------------------------------      ------------------------------------------------`

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Indicate by check mark
whether the Registrant (1) has filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter periods that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.

`YES [X]   NO [  ]`

Indicate by check 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]

Indicate by check mark
whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the
Act).

`YES [ ]      NO [X]`

Based on the stockholders
of record on December 31, 2003, the aggregate market value of the voting stock
held by nonaffiliates of the Registrant was $52.8 million.

Indicate the number of
shares outstanding of each of the Registrants classes of common stock, as
of the latest practicable date.

`Class                                              Outstanding at December 31, 2003

Common stock ($5.00 par value)                                             2,362,149 Shares`

Portions of the following
documents are incorporated by reference into Parts III of the Form 10-K report:
Proxy Statement dated April 5, 2004.

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`CROSS REFERENCE INDEX

                                                                                                  Page
PART I

Item 1       Business                                                                                2
Item 2       Properties                                                                             12
Item 3       Legal Proceedings                                                                      14
Item 4       Submission of Matters to a Vote of Security Holders                                    14

PART II

Item 5       Market for the Registrant's Common Equity and Related Stockholder Matters              14
Item 6       Selected Financial Data                                                                15
Item 7       Management's Discussion and Analysis of Financial Condition and Results of
             Operations                                                                             17
Item 7A      Quantitative and Qualitative Disclosures About Market Risk                             44
Item 8       Financial Statements and Supplementary Data                                            45
Item 9       Changes In and Disagreements with Accountants on Accounting and                        77
             Financial Disclosure
Item 9A      Controls and Procedures                                                                78

PART III

Item 10      Directors and Executive Officers of the Registrant                                     78
Item 11      Executive Compensation                                                                 78
Item 12      Security Ownership of Certain Beneficial Owners and Management                         79
Item 13      Certain Relationships and Related Transactions                                         79
Item 14      Principal Accounting Fees and Services                                                 79

Part IV

Item 15      Exhibits, Financial Statement Schedules and Reports on Form 8-K                        79

-----------------
* Information called for by Part III (Items 10 through 14) is incorporated by reference to the Registrant's Proxy
Statement dated April 5, 2004.`

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Security Capital
Corporation is a one-bank holding company and has two subsidiaries, First
Security Bank and Batesville Security Building Corporation.

As a bank holding company,
Security Capital Corporation engages in the business of banking through its sole
banking subsidiary and may engage in certain non-banking activities closely
related to banking and may own certain other business corporations that are not
banks, subject to applicable laws and regulations. Security Capital Corporation
is not currently engaging in non-bank activities, and does not own any business
corporations except for Batesville Security Building Corporation, which is
inactive, and has no current plans to engage in non-bank activities or own any
other business corporations.

Security Capital
Corporation was incorporated on September 16, 1982 for the purpose of acquiring
First Security Bank and serving as a one-bank holding company.

First Security Bank was
originally chartered under the laws of the State of Mississippi on October 25,
1951.

Batesville Security
Building Corporation, the nonbank subsidiary, was chartered under the laws of
the State of Mississippi on June 23, 1971, for the purpose of acquiring real
estate; to hold, improve, develop, operate, manage, mortgage, sell, exchange and
lease and to generally deal and manage real estate and personal property.
Batesville Security Building Corporation is a wholly owned subsidiary of
Security Capital Corporation, and is currently inactive.

Security Capital
Corporations home or principal office is located at 295 Highway 6 West,
Batesville, Mississippi, 38606. The telephone of the home or principal office is
(662) 563-9311. First Security Banks website is www.firstsecuritybk.com

Security Capital
Corporation, through First Security Bank, engages in a wide range of banking
activities, including accepting demand deposits, accepting savings and time
deposit accounts, making secured and unsecured loans to corporations,
individuals and others, issuing credit cards, issuing and processing ATM cards
and debit cards, issuing commercial and standby letters of credit, originating
mortgage loans, and providing personal and corporate trust services.

Security Capital
Corporations lending services include commercial, real estate,
installment, credit card loans, merchant accounts receivable loans, student
loans, and agricultural loans. Revenues from Security Capital Corporations
Lending activities constitute the largest component of Security Capital
Corporations operating revenues.

At December 31, 2003, the
loan portfolio totaled $204,424 constituting 66.94% of the earning assets of
$305,362. Security Capital Corporations loan personnel have the authority
to extend credit under guidelines established and approved by the Board of
Directors. Any aggregate credit which exceeds the authority of the loan officer
or a combination of several authority limits is forwarded to the Loan Committee
for approval. The Loan Committee is comprised of various Bank Directors,
including the Chairman.

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Security Capital
Corporations primary lending areas are the counties of Desoto, Panola,
Quitman and Tunica in the State of Mississippi. Security Capital Corporation may
extend credit to borrowers out of the primary lending area but on a limited
basis in which the risk is low and/or a relationship may exist with the borrower
and an industry or a development in the primary lending area.

The following tables
provide demographic information for Desoto, Panola, Quitman and Tunica counties,
and for the State of Mississippi:

`POPULATION

                                 2000               1990               1980               1970
                                 ----               ----               ----               ----

DeSoto                          107,199             67,910             53,930             35,885
Panola                           34,274             29,996             28,164             26,829
Quitman                          10,117             10,490             12,636             15,888
Tunica                            9,277              8,164              9,652             11,854
Mississippi                   2,844,658          2,573,216          2,520,698          2,216,994

SOURCE: Center for Population Studies, University of Mississippi

                                                      PER CAPITA INCOME

                                 2001           2000           1999            1998           1997
                                 ----           ----           ----            ----           ----

DeSoto                          $26,657       $25,480         $24,327         $23,851        $22,382
Panola                           17,098        16,184          15,753          15,382         15,126
Quitman                          16,098        14,282          14,192          13,731         14,091
Tunica                           16,483        17,462          17,557          16,623         16,984
Mississippi                      21,653        20,920          20,082          19,635         18,580

SOURCE: United States Department of Commerce, Bureau of Economic Analysis

                                          MEDIAN AGE

                                 2000                       1990
                                 ----                       ----

DeSoto                           33.7                       31.5
Panola                           33.0                       30.1
Quitman                          31.8                       30.1
Tunica                           30.6                       25.3

SOURCE: Center for Population Studies, University of Mississippi`

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Panola County and Quitman
County are rural areas, in which agriculture and industry play a big part in the
economy. Desoto County and Tunica County have a different economic structure.
The growth and composition of Desoto County has been dictated, primarily, by the
outflow from Memphis, Tennessee, seeking residential living developments as well
as locations for retail businesses and other commercial developments outside the
Memphis city limits. Tunica Countys economy is dependent on the gaming
industry to provide employment and to provide resources for the operation of the
county. The numerous casinos in the Tunica area employ residents from the
surrounding counties and residents from the States of Tennessee and Arkansas.

Security Capital
Corporation has in the past and intends to continue to make most types of real
estate loans including but not limited to single and multi-family housing, farm
loans, residential and commercial construction loans and loans for commercial
real estate.

Major classifications of
loans were as follows:

`December 31,
                                                                 2003        2002
                                                                 ----        ----
                                                                  (In thousands)

     Commercial, financial and agricultural                     $32,878     $38,229
     Real estate - construction and development                  37,116      27,165
     Real estate - mortgage                                     103,348      96,737
     Installment loans to individuals                            28,529      22,602
     Other                                                        2,553       2,782
                                                               --------    --------
                                                                204,424     187,515
     Less allowance for loan losses                             (3,665)     (3,455)
                                                               --------    --------
                                                               $200,759    $184,060
                                                               ========    ========`

The success of the loan
portfolio is not dependent on a single borrower or group of borrowers. The large
loans of the loan portfolio are defined as those loans with a balance of
$315,000 and over. As of December 31, 2003, the loan portfolio totals $204.4
million of which the large lines total $58.5 million representing 68 borrowers.

Security Capital
Corporation provides a wide range of personal and corporate trust and
trust-related services which includes serving as executor of estates, as trustee
under testamentary and inter vivos trusts and various pension and other employee
benefit plans, as guardian of the estates of minors and incompetents, as escrow
agent under various agreements, as transfer agent and paying agent of registered
bond issues, and as custodian for assets invested. In addition, the Trust
Department of First Security Bank offers a variety of investment tools which
includes a money management and financial planning program that uses the skills
and abilities of a Certified Financial Planner and a Certified Retirement
Services Professional among other specialists who are within the employment of
First Security Bank and the Trust Department.

In recent years, Security
Capital Corporation has opened several new locations to expand the First
Security Banking area. In October of 1998, First Security Banking locations at
Como, Mississippi, and Crenshaw, Mississippi, were purchased from First
Tennessee Bank. In July of 1999, Planters Bank in Tunica was purchased from
First Tennessee Bank. In December of 1995, a loan production office opened in
Desoto County in the city of Olive Branch with one employee. In June of 1997, a
full service bank branch opened and continued First Security Banks
operation in the Olive Branch area with four employees. In October of 2001,
First Security Banks

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operation in Olive Branch
moved to a newly constructed building with features of four drive-thru lanes and
a total square footage of 7,000 to accommodate the projected growth in that
area. The number of employees at Olive Branch in 2002 grew to twelve. In January
2001, a loan production office officially opened in Desoto County in the city of
Hernando. On July 1, 2002, the operation in Hernando moved from a loan
production facility to a newly constructed building, a sister to the Olive
Branch building, providing full banking services. In August of 2003, a branch
was opened in the town of Pope. Security Capital Corporation has offered ATM
services for numerous years and began in 1995 running its own ATMs.
Today, First Security Bank provides ATM services at twenty-three locations,
sixteen of which are not located on bank property. First Security Bank, also,
provides the customer with 24 hours a day, 7 days a week, access to their
account balances and activity through a telephone banking product called First
Line. Initiated in October of 2002, First Security Bank offered internet
banking, called First Teller, to accommodate those customers desiring through
technology to review their accounts activity and images of the activity,
if applicable, and pay their bills from anywhere in the world.

On December 31, 2003, First
Security Bank had 157 full-time equivalent employees.

Security Capital
Corporation and First Security Bank are subject to state and federal banking
laws and regulations which impose specific requirements or restrictions on and
provide for general regulatory oversight with respect to virtually all aspects
of operations. These laws and regulations are generally intended to protect
depositors, not shareholders. To the extent that the following summary describes
statutory or regulatory provisions, it is qualified in its entirety by reference
to the particular statutory and regulatory provisions. Any change in applicable
laws or regulations may have a material effect on the business and prospects of
Security Capital Corporation. Beginning with the enactment of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA)
and following with Federal Deposit Insurance Corporation Improvement Act of 1991
(FDICIA) and the Gramm-Leach-Bliley Act of 1999 (the Financial
Services Modernization Act), numerous additional regulatory requirements
have been placed on the banking industry in the past several years, and
additional changes have been proposed. The operations of Security Capital
Corporation and First Security Bank may be affected by legislative changes and
the policies of various regulatory authorities. Security Capital Corporation is
unable to predict the nature or the extent of the effect on its business and
earnings that fiscal or monetary policies, economic control, or new federal or
state legislation may have in the future.

Security Capital
Corporation is a bank holding company within the meaning of the federal Bank
Holding Company Act of 1956 (the BHCA).

The BHCA. Under the BHCA,
Security Capital Corporation is subject to periodic examination by the Federal
Reserve and is required to file periodic reports of its operations and such
additional information as the Federal Reserve may require. Security Capital
Corporations and First Security Bank activities are limited to
banking, managing or controlling banks, furnishing services to or performing
services for its subsidiaries, and engaging in other activities that the Federal
Reserve determines to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto.

Investments, Control, and
Activities. With certain limited exceptions, the BHCA requires every bank
holding company to obtain the prior approval of the Federal Reserve before (i)
acquiring substantially all the assets of any bank, (ii) acquiring direct or
indirect ownership or control of any voting shares of any bank if after such
acquisition it would own or control more than 5% of the voting shares of such
bank (unless it already owns or controls the majority of such shares), or (iii)
merging or consolidating with another bank holding company.

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In addition, and subject to
certain exceptions, the BHCA and the Change in Bank Control Act, together with
regulations thereunder, require Federal Reserve approval (or, depending on the
circumstances, no notice of disapproval) prior to any person or company
acquiring control of a bank holding company, such as Security
Capital Corporation. Control is conclusively presumed to exist if an individual
or company acquires 25% or more of any class of voting securities of the bank
holding company. Control is rebuttably presumed to exist if a person acquires
10% or more but less than 25% of any class of voting securities and either
Security Capital Corporation has registered securities under Section 12 of the
Exchange Act or no other person owns a greater percentage of that class of
voting securities immediately after the transaction. The regulations provide a
procedure for challenge of the rebuttable control presumption.

Under the BHCA, a bank
holding company is generally prohibited from engaging in, or acquiring direct or
indirect control of more than 5% of the voting shares of any company engaged in
nonbanking activities, unless the Federal Reserve Board, by order or regulation,
has found those activities to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto. Some of the activities
that the Federal Reserve Board has determined by regulation to be proper
incidents to the business of a bank holding company include making or servicing
loans and certain types of leases, engaging in certain insurance and discount
brokerage activities, performing certain data processing services, acting in
certain circumstances as a fiduciary or investment or financial adviser, owning
savings associations, and making investments in certain corporations or projects
designed primarily to promote community welfare.

The Federal Reserve Board
has imposed certain capital requirements on bank holding companies under the
BHCA, including a minimum leverage ratio and a minimum ratio of
qualifying capital to risk-weighted assets. These requirements are
described below under Capital Regulations. Subject to its capital
requirements and certain other restrictions, Security Capital Corporation may
borrow money to make a capital contribution to First Security Bank, and such
loans may be repaid from dividends paid from First Security Bank to Security
Capital Corporation (although the ability of First Security Bank to pay
dividends is subject to regulatory restrictions as described below in
Dividends under Item 5). Security Capital Corporation is also able
to raise capital for contribution to First Security Bank by issuing securities
without having to receive regulatory approval, subject to compliance with
federal and state securities laws.

Source of Strength;
Cross-Guarantee. In accordance with Federal Reserve Board policy, Security
Capital Corporation is expected to act as a source of financial strength to
First Security Bank and to commit resources to support First Security Bank in
circumstances in which Security Capital Corporation might not otherwise do so.
Under the BHCA, the Federal Reserve Board may require a bank holding company to
terminate any activity or relinquish control of a nonbank subsidiary (other than
a nonbank subsidiary of a bank) upon the Federal Reserve Boards
determination that such activity or control constitutes a serious risk to the
financial soundness or stability of any subsidiary depository institution of the
bank holding company. Further, federal bank regulatory authorities have
additional discretion to require a bank holding company to divest itself of any
bank or nonbank subsidiary if the agency determines that divestiture may aid the
depository institutions financial condition.

State and FDIC Regulation.
First Security Bank is subject to regulation and periodic examinations by the
FDIC and the State of Mississippi Department of Banking and Consumer Finance.
These regulatory authorities examine such areas as reserves, loan and investment
quality, management policies, procedures and practices and other aspects of
operations. These examinations are designed for the protection of the
Banks depositors, rather than their stockholders. In addition to these
regular examinations, the Company and the Banks must furnish periodic reports to
their respective regulatory authorities containing a full and accurate statement
of their affairs.

FDICIA.   All insured institutions must undergo regular on-site
examinations by their appropriate
banking agency.  The cost of examinations of insured depository institutions and any affiliates may be assessed
by the appropriate agency against each institution or affiliate as it deems necessary or appropriate.  Insured
institutions are required to submit annual reports to the FDIC and the appropriate agency (and state supervisor
when applicable).  FDICIA also directs the FDIC to develop with other appropriate agencies a method for insured
depository institutions to provide supplemental disclosure of the estimated fair market value of assets and
liabilities, to the extent feasible and practicable, in any balance sheet, financial statement, report of
condition, or any other report of any insured depository institution.  FDICIA also requires the federal banking
regulatory agencies to prescribe, by regulation, standards for all insured depository institutions and depository
institution holding companies relating, among other things, to: (i) internal controls, information systems, and
audit systems; (ii) loan documentation; (iii) credit underwriting; (iv) interest rate risk exposure; and (v)
asset quality.

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FDICIA contains a
prompt corrective action section intended to resolve problem
institutions at the least possible long-term cost to the deposit insurance
funds. Pursuant to this section, the federal banking agencies are required to
prescribe a leverage limit and a risk-based capital requirement indicating
levels at which institutions will be deemed to be well capitalized,
adequately capitalized, undercapitalized,
significantly undercapitalized and critically
undercapitalized. In the case of a depository institution that is
critically undercapitalized (a term defined to include institutions
which still have positive net worth), the federal banking regulators are
generally required to appoint a conservator or receiver.

Deposit Insurance. The FDIC
establishes rates for the payment of premiums by federally insured banks and
thrifts for deposit insurance. A separate Bank Insurance Fund (BIF)
and Savings Association Insurance Fund (SAIF) are maintained for
commercial banks and thrifts, respectively, with insurance premiums from the
industry used to offset losses from insurance payouts when banks and thrifts
fail. Since 1993, insured depository institutions like First Security Bank have
paid for deposit insurance under a risk-based premium system.

Transactions With
Affiliates and Insiders. First Security Bank is subject to Section 23A of the
Federal Reserve Act, which places limits on the amount of loans to, and certain
other transactions with, affiliates, as well as on the amount of advances to
third parties collateralized by the securities or obligations of affiliates. The
aggregate of all covered transactions is limited in amount, as to any one
affiliate, to 10% of the Banks capital and surplus and, as to all
affiliates combined, to 20% of the Banks capital and surplus. Furthermore,
within the foregoing limitations as to amount, each covered transaction must
meet specified collateral requirements.

First Security Bank is also
subject to Section 23B of the Federal Reserve Act, which prohibits an
institution from engaging in certain transactions with affiliates unless the
transactions are on terms substantially the same, or at least as favorable to
such institution, as those prevailing at the time for comparable transactions
with nonaffiliated companies. First Security Bank is subject to certain
restrictions on extensions of credit to executive officers, directors, certain
principal shareholders, and their related interests. Such extensions of credit
(i) must be made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
third parties and (ii) must not involve more than the normal risk of repayment
or present other unfavorable features.

Community Reinvestment Act.
The Community Reinvestment Act requires that, in connection with examinations of
financial institutions within their respective jurisdictions, the Federal
Reserve, the FDIC, the OCC, or the Office of Thrift Supervision shall evaluate
the record of the financial institutions in meeting the credit needs of their
local communities, including low and moderate income neighborhoods, consistent
with the safe and sound operation of those institutions. These factors are also
considered in evaluating mergers, acquisitions, and applications to open a
branch or facility.

Other Regulations. Interest
and certain other charges collected or contracted for by First Security Bank are
subject to state usury laws and certain federal laws concerning interest rates.
First Security Banks loan operations are subject to certain federal laws
applicable to credit transactions, such as the federal Truth-In-Lending Act,
governing disclosures of credit terms to consumer borrowers; the Home Mortgage
Disclosure Act of 1975, requiring financial institutions to provide information
to enable the public and public officials to determine whether a financial
institution is fulfilling its obligation to help meet the housing needs
community it serves; the Equal Credit Opportunity Act, prohibiting
discrimination on the basis of creed or other prohibited

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factors in extending
credit; the Fair Credit Reporting Act of 1978, governing the use and provision
of information to credit reporting agencies; the Fair Debt Collection Act,
concerning the manner in which consumer debts may be collected by collection
agencies; and the rules and regulations of the various federal agencies charged
with the responsibility of implementing such federal laws. The deposit
operations of First Security Bank also are subject to the Right to Financial
Privacy Act, which imposes a duty to maintain confidentiality of consumer
financial records and prescribes procedures for complying with administrative
subpoenas of financial records, and the Electronic Funds Transfer Act and
Regulation E issued by the Federal Reserve Board to implement that Act, which
governs automatic deposits to and withdrawals from deposit accounts and
customers rights and liabilities arising from the use of automated teller
machines and other electronic banking services.

Enforcement Powers. FIRREA
expanded and increased civil and criminal penalties available for use by the
federal regulatory agencies against depository institutions and certain
institution-affiliated parties (primarily including management,
employees, and agents of a financial institution, independent contractors such
as attorneys and accountants, and others who participate in the conduct of the
financial institutions affairs). These practices can include the failure
of an institution to timely file required reports; the filing of false or
misleading information; or the submission of inaccurate reports. Civil penalties
may be as high as $1,000,000 a day for such violations. Criminal penalties for
some financial institution crimes have been increased to twenty years. In
addition, regulators are provided with greater flexibility to commence
enforcement actions against institutions and institution-affiliated parties.
Possible enforcement actions include the termination of deposit insurance.
Furthermore, FIRREA expanded the appropriate banking agencies power to
issue cease and desist orders that may, among other things, require affirmative
action to correct any harm resulting from a violation or practice, including
restitution, reimbursement, indemnifications, or guarantees against loss. A
financial institution may also be ordered to restrict its growth, dispose of
certain assets, rescind agreements or contracts, or take other actions as
determined by the ordering agency to be appropriate.

Effect of Governmental
Monetary Policies. The earnings of First Security Bank are affected by domestic
economic conditions and the monetary and fiscal policies of the United States
government and its agencies. The Federal Reserve Boards monetary policies
have had, and are likely to continue to have, an important impact on the
operating results of commercial banks through its power to implement national
monetary policy in order, among other things, to curb inflation or combat a
recession. The monetary policies of the Federal Reserve Board have major effects
upon the levels of bank loans, investments, and deposits through its open market
operations in United States government securities and through its regulation of
the discount rate on borrowings of member banks and the reserve requirements
against member bank deposits. It is not possible to predict the nature or impact
of future changes in monetary and fiscal policies.

Financial Services
Modernization Act. On November 12, 1999, President Clinton signed into law the
Gramm-Leach-Bliley Act of 1999 (the Financial Services Modernization
Act). The Financial Services Modernization Act repeals the two affiliation
provisions of the Glass-Steagall Act: Section 20, which restricted the
affiliation of Federal Reserve Member Banks with firms engaged
principally in specified securities activities; and Section 32, which
restricts officer, director, or employee interlocks between a member bank and
any company or person primarily engaged in specified securities
activities. In addition, the Financial Services Modernization Act also contains
provisions that expressly preempt any state law restricting the establishment of
financial affiliations, primarily related to insurance. The general effect of
the law is to establish a comprehensive framework to permit affiliations among
commercial banks, insurance companies, securities firms, and other financial
service providers by revising and expanding the BHCA framework to permit a
holding company system to engage in a full range of financial activities through
a new entity known as a Financial Holding Company. Financial
activities is broadly defined to include not only banking, insurance, and
securities activities, but also merchant banking and additional activities that
the Federal Reserve, in consultation with the Secretary of the Treasury,
determines to be financial in nature, incidental to such financial activities,
or complementary activities that do not pose a substantial risk to the safety
and soundness of depository institutions or the financial system generally.

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`Generally, the Financial Services Modernization Act:

         o        Repeals historical restrictions on, and eliminates many federal and state law barriers to,
                  affiliations among banks, securities firms, insurance companies, and other financial service
                  providers;

         o        Provides a uniform framework for the functional regulation of the activities of banks, savings
                  institutions, and their holding companies;

         o        Broadens the activities that may be conducted by national banks, banking subsidiaries of bank
                  holding companies, and their financial subsidiaries;

         o        Provides an enhanced framework for protecting the privacy of consumer information;

         o        Adopts a number of provisions related to the capitalization, membership, corporate governance,
                  and other measures designed to modernize the Federal Home Loan Bank system;

         o        Modifies the laws governing the implementation of the Community Reinvestment Act ("CRA"); and

         o        Addresses a variety of other legal and regulatory issues affecting both day-to-day operations
                  and long-term activities of financial institutions.`

In order for a bank holding
company to take advantage of the ability to affiliate with other financial
services providers, that company must become a Financial Holding
Company as permitted under an amendment to the BHCA. To become a Financial
Holding Company, Security Capital Corporation would file a declaration with the
Federal Reserve, electing to engage in activities permissible for Financial
Holding Companies and certifying that it is eligible to do so because all of its
insured depository institution subsidiaries are well-capitalized and
well-managed. In addition, the Federal Reserve must also determine that each
insured depository institution subsidiary of Security Capital Corporation has at
least a satisfactory CRA rating.

The Financial Services
Modernization Act also includes a new section of the Federal Deposit Insurance
Act governing subsidiaries of state banks that engage in activities as
principal that would only be permissible for a national bank to conduct in
a financial subsidiary. It expressly preserves the ability of a state bank to
retain all existing subsidiaries. In order to form a financial subsidiary, a
state bank must be well-capitalized, and the state bank would be subject to the
same capital deduction, risk management and affiliate transaction rules as
applicable to national banks.

Security Capital
Corporation and First Security Bank do not believe that the Financial Services
Modernization Act will have a material adverse effect on operations in the
near-term. However, to the extent that it permits banks, securities firms, and
insurance companies to affiliate, the financial services industry may experience
further consolidation. The Financial Services Modernization Act is intended to
grant to community banks certain powers as a matter of right that larger
institutions have accumulated on an ad hoc basis. Nevertheless, this act may
have the result of increasing the amount of competition that Security Capital
Corporation and First Security Bank face from larger institutions and other
types of companies offering financial products, many of which may have
substantially more financial resources than Security Capital Corporation and
First Security Bank.

Capital.   Security Capital Corporation and First Security Bank are
required to comply with the capital
adequacy standards established by the Federal Reserve Board and the FDIC.  There are two basic measures of
capital adequacy for bank holding companies and their banking subsidiaries: a risk-based measure and a leverage
measure.

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The risk-based capital
standards are designed to make regulatory capital requirements more sensitive to
differences in risk profile among depository institutions 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 total capital to risk-weighted assets, including certain off-balance sheet
items such as standby letters of credit (total capital ratio) is 8.0
percent. At least half of total capital must be composed of common equity,
undivided profits, 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, a limited amount of loan loss reserves, and
unrealized gains on equity securities subject to limitations (Tier 2
capital).

The following table
represents the capital ratios for Security Capital Corporation and First
Security Bank as of December 31, 2003:

`Corporation                                      Bank
Risk-Based Capital Ratio                    Ratio                      Ratio            Requirements
------------------------                    -----                      -----            ------------
Total Capital                               16.48                      15.65                 8
Tier 1 Capital                              15.22                      14.40                 4
Leverage Capital                            10.79                      10.19                 3`

Deposit Insurance
Assessments. The deposits of First Security Bank are insured by the FDIC up to
the limits set forth under applicable law. A majority of the deposits of First
Security Bank are subject to the deposit insurance assessments of the Bank
Insurance Fund (BIF) of the FDIC. However, a portion of First
Security Banks deposits, relating to a savings association acquisition,
are subject to assessments imposed by the Savings Association Insurance Fund
(SAIF) of the FDIC. The FDIC equalized the assessment rates for
BIF-insured and SAIF-insured deposits effective January 1, 1997. The assessments
imposed on all FDIC deposits for deposit insurance have an effective rate
ranging from 0 to 27 basis points per $100 of insured deposits, depending on the
institutions capital position and other supervisory factors. Legislation
was enacted in 1996 requiring both SAIF-insured and BIF-insured deposits to pay
a pro rata portion of the interest due on the obligations issued by the
Financing Corporation (FICO). The FDIC is currently assessing,
effective for the first quarter of 2004, BIF- and SAIF-insured deposits totaling
an additional 1.54 basis points per $100 of deposits.

The banking business is a
highly competitive business. Security Capital Corporations market area
consists principally of Panola, Quitman, Desoto and Tunica Counties in
Mississippi. Security Capital Corporation competes with other financial
institutions, as well as insurance companies and various other entities, for
deposits and in providing financial services in these counties and the
surrounding counties. Security Capital Corporation, as provided by the FDIC
Market Share Report of June 30, 2003 (the latest Market Share Report), held
53.20% of the deposit market in Panola County. In Quitman County - an area with
no growth and poor economy in the best of years - this same report reflects
Security Capital Corporation holding 18.98 % of the deposit market. The majority
of the deposit market is being held by the financial institution owned by one of
the longstanding wealthy families in the area. In Desoto County, an area filled
with large regional banks and national banks, Security Capital Corporation
occupies a growing share of 4.61% of the deposit market as of June 30, 2003.
Management measures the success of the locations in this area, not only by the
growth of the deposits, but by its ability to continue to be competitive and to
grow in the loan production area. In Tunica County, Security Capital Corporation
ranks second of the three financial institutions with a 35.72% share of the
deposit base.

---

Because of the Lack of an
Established Trading Market and Restrictions on Transfer, Shareholders May Not be
Able to Quickly and Easily Sell Their Common Stock.

There has been no
established or liquid market for the Common Stock. Because of the substantial
restrictions on transfer of the Common Stock, Security Capital Corporation does
not anticipate that a reliable or liquid secondary trading market for the Common
Stock will exist or develop in the foreseeable future.

Changes in Local Economic
Conditions Could Reduce Our Income and Growth, and Could Lead to Higher Levels
of Problem Loans and Charge-Offs.

Security Capital
Corporation makes loans, and most of its assets are located in Panola, Quitman,
Desoto, and Tunica Counties in Mississippi. Adverse changes in economic
conditions in these areas could hurt Security Capital Corporations ability
to collect loans, could reduce the demand for loans, and could negatively impact
performance and financial condition.

Security Capital
Corporations earnings depend to a great extent on rate
differentials, which are the differences between interest income that
Security Capital Corporation earns on loans and investments and the interest
expense paid on deposits and other borrowings. These rates are highly sensitive
to many factors which are beyond Security Capital Corporations control,
including general economic conditions and the policies of various government and
regulatory authorities. Changes in interest rate policy by the Board of
Governors of the Federal Reserve System affect Security Capital
Corporations interest income, interest expense and investment portfolio.
Also, governmental policies such as the creation of a tax deduction for
individual retirement accounts can increase savings and affect the cost of
funds. A rapid increase or decrease in interest rates could have an adverse
effect on the net interest margin and results of operations of Security Capital
Corporation. The nature, timing and effect of any future changes in federal
monetary and fiscal policies on Security Capital Corporation and its results of
operations are not predictable.

There is No Assurance That
Security Capital Corporation Will be Able to Successfully Compete with Others
for Business.

The banking business is
highly competitive, and the profitability of Security Capital Corporation
depends principally upon its ability to compete in the market areas where its
banking operations are located. Security Capital Corporation competes with other
commercial banks, savings banks, savings and loan associations, credit unions,
mortgage companies, finance companies, mutual funds, insurance companies,
brokerage and investment banking firms, asset-based non-bank lenders and certain
other non-financial entities, including retail stores which may maintain their
own credit programs and certain governmental organizations which may offer more
favorable financing than Security Capital Corporation. Many of these competitors
have greater financial and other resources than Security Capital Corporation,
and certain larger competitors are recent entrants into Security Capital
Corporations markets.

The Company maintains an
internet website at www.firstsecuritybk.com. Currently, the Company has not
provided on its website the annual reports on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K, and amendments to those reports as filed
with the Securities and Exchange Commission. However, electronic or paper copies
of the reports will be provided, free of charge, upon request by mail, through
our website or in person Steps have been taken to incorporate these reports
early in 2004 into the Companys website and, thereafter, to have the
reports available as soon as reasonably practical after the reports are filed
with the Commission. Information on the Companys website is not
incorporated into this Form 10-K or the Companys other securities filings
and is not a part of them.

---

The statistical disclosures
for the Company are contained in Tables 1 through 16 in Items 6 and 7.

Security Capital
Corporation through First Security Bank, currently operates from its main office
in central Batesville and from 11 additional branches in Panola, Quitman,
Desoto, and Tunica Counties - all located in Mississippi. Information about
these branches is set forth in the table below:

`Name of Office                        Location/Telephone Number                   Banking Services Offered
--------------                        -------------------------                   ------------------------

Main Office                           295 Highway 6 West;                        Loans, Deposits, Cash,
                                      Batesville, Mississippi 38606;             Safe Deposit Boxes, ATM,
                                      662-563-9311                               Trust, Drive-thru.

Express Branch                        130 Highway 51 North                       Drive-thru, Cash.
                                      Batesville, Mississippi 38606;
                                      662-563-9311

Marks Branch                          Highway 3 South                            Loans, Deposits, Cash,
                                      Marks, Mississippi 38646;                  Safe Deposit Boxes,
                                      662-326-8053                               Drive-thru.

Power Drive Branch                    230 Power Drive                            Loans, Deposits, ATM
                                      Batesville, Mississippi 38606;             Safe Deposit Boxes,
                                      662-563-9311                               Cash, Drive-thru

Sardis Branch                         201 South Main                             Loans, Deposits, Cash
                                      Sardis, Mississippi 38666;                 Safe Deposit Boxes,
                                      662-487-1661                               Drive-thru.

Olive Branch Branch                   6659 Highway 305                           Loans, Deposits, Cash,
                                      Olive Branch, Mississippi 38654;           Safe Deposit Boxes, ATM,
                                      662-895-1994                               Drive-thru.

Como Branch                           227 Main Street                            Loans, Deposits, Cash
                                      Como, Mississippi 38619                    Safe Deposit Boxes,
                                      662-526-5191                               Drive-thru.

Crenshaw Branch                       729 Broad Street                           Loans, Deposits, Cash,
                                      Crenshaw, Mississippi                      Safe Deposit Boxes,
                                      662-382-5215                               Drive-thru.`

---

`Tunica Branch                         1262 Edwards Street                        Loans, Deposits, Drive-
                                      Tunica, Mississippi                        thru, Safe Deposit Boxes,
                                      662-363-2311                               ATM. Cash.

Robinsonville Branch                  11490 Old Highway 61                        Loans, Deposits, Drive-
                                      Robinsonville, Mississippi                  thru, Cash, ATM.
                                      662-363-5015




Name of Office                        Location/Telephone Number                  Banking Services Offered
--------------                        -------------------------                  ------------------------

Hernando Branch                       985 Commerce Street                        Loans, Deposits, Cash,
                                      Hernando, Mississippi                      Safe Deposit Boxes,
                                      662-449-4115                               ATM, Drive-thru.

Pope Branch                           7024 Highway 51                            Deposits, Cash, ATM,
                                      Pope, Mississippi                          Drive-thru.
                                      662-578-5650

Trust and Financial Services          220 Power Drive                            Investment Planning &
Branch                                Batesville, Mississippi                    Management,
                                      662-563-9311                               Personal Trusts,
                                                                                 Corporate Trusts, Pension &
                                                                                 Profit-Sharing Plans, IRAs,
                                                                                 Paying Agent Accounts.`

First Security Bank owns
its main office and all of its branch offices, except the Express Branch. The
Express Branch is leased for an annual rent of $9,600 under a ground lease
agreement that expires in 2007, with an option to renew. The main office
facility, originally was occupied in 1973, is used solely by Security Capital
Corporation and First Security Bank. This facility contains approximately 21,300
square feet and houses the executive offices and the operations department as
well as providing the customer area for cash, deposit, safe deposit and loan
transactions. The other branch buildings range in size from approximately 600
square feet for the Express Branch to 7,000 square feet for the Hernando and
Olive Branch locations.

---

First Security Bank is the
defendant in a case styled Amy French, individually, and Austin Lenard, a minor,
by and through His Next Friend and Mother, Amy French vs. First Security Bank
and Joshua Hawkins, Cause No. 2002-327-BB, filed on December 17, 2002 in the
Circuit Court of the Second Judicial District of Panola County, Mississippi. The
case involves an accident that occurred when a First Security Bank employee
traveling in his personal vehicle to service an ATM was involved in an
automobile accident. The pregnant occupant of the other vehicle gave birth later
that day. The claims in the lawsuit are that the mother and child are
experiencing permanent and continuing injuries, and the plaintiffs ask for
compensatory damages in the amount determined to be fair by the jury.

From time to time First
Security Bank is a defendant in various other lawsuits arising out of the normal
course of business. In the opinion of management, the ultimate resolution of
this category of claims should not have a material adverse effect on Security
Capital Corporations consolidated financial position or results of
operations.

No matters were submitted
to a shareholder vote during the fourth quarter of 2003.

There is no public trading
market for the Common Stock of Security Capital Corporation. The articles and
bylaws of Security Capital Corporation give Security Capital Corporation a right
of first refusal to acquire shares when a shareholder wishes to sell stock.

Security Capital
Corporation paid an annual cash dividend of $.95 per share in 2003 and $.86 per
share (split adjusted) in 2002. The primary source of funds for dividends paid
by Security Capital Corporation to its shareholders is the dividend income
received from First Security Bank. There are certain restrictions on the payment
of such dividends imposed by federal and state banking laws, regulations and
authorities. Under Mississippi law, the payment of dividends by First Security
Bank must be approved by the Mississippi Department of Banking and Consumer
Finance. The FDIC also has the authority to regulate the payment of dividends
and to prohibit a regulated depository institution from engaging in what in such
agencys opinion constitutes an unsafe or unsound practice for conducting
business. Depending upon the financial condition of the depository institution,
payment of dividends could be deemed to constitute such an unsafe or unsound
practice. In addition, a depository institution may not pay a dividend or
otherwise make a capital distribution if the payment thereof would cause such
institution to fail to satisfy its capital requirements.

At December 31, 2003 there
were 607 stockholders of record of the Companys common stock.

---

The following table sets
forth certain financial information for Security Capital Corporation on a
consolidated historical basis. Such information should be read in conjunction
with, and is qualified in its entirety by, the consolidated financial statements
and notes appearing elsewhere in this report.

`Security Capital Corporation
                                     Table 1 - Five Year Financial Summary


                                             12/31/03     12/31/02     12/31/01     12/31/00     12/31/99
                                             (in thousands except per share data and Other Financial Data)
Income Statement Data:
Interest Income                                17,009       16,847       19,834       20,487       16,477
Interest Expense                                3,955        4,760        7,744        8,966        6,419
Net Interest Income                            13,054       12,087       12,090       11,521       10,058
Provision for Loan Losses                        -546         -672         -701         -326         -271
Net Interest Income After Provision            12,508       11,415       11,389       11,195        9,787
Noninterest Income                              5,666        5,155        4,591        2,885        2,836
Noninterest Expenses                           10,618       10,092        9,555        8,779        7,346
Income Before Income Taxes                      7,556        6,478        6,425        5,301        5,277
Income Tax Expense                             -2,039       -1,666       -1,814       -1,079       -1,507
NET INCOME                                      5,517        4,812        4,611        4,222        3,770

Per Share Data:
Net Income*                                      2.34         2.04         1.95         1.79         1.59
Cash Dividends*                                  0.95         0.86         0.77         0.69         0.62
Book Value*                                     17.30        16.04        14.58        13.08        11.58

Other Ratios:
Return on Average Assets                         1.66         1.60         1.62         1.52         1.59
Return on Equity                                13.73        13.45        13.78        14.67        13.97
Loans to Deposits                               70.87        70.60        72.33        77.84        61.45
Loans to Total Assets                           60.08        59.42        61.08        63.26        54.17
Equity Capital to Total Assets                  12.01        12.00        12.36        10.87         9.93
Average Equity to Average Assets                12.12        11.94        11.73        10.35        11.38
Dividend Payout Ratio                           40.60        42.06        39.51        38.83        38.69

Other Financial Data:
Cash Dividends Declared                     2,243,187    2,022,867    1,819,753    1,632,254    1,464,944
Weighted Average
Outstanding Common Shares                   2,361,090    2,360,351    2,360,580    2,364,791    2,376,658

 * The per share information is based upon the retroactive effect of the stock dividends for the period.`

---

The per share data being
reflected was derived using the weighted average number of outstanding shares at
December 31, 2003 as the denominator. (The weighted average number of
outstanding shares at December 31, 2003 was 2,361,090.) For example, the cash
dividends per share was determined by dividing the amount of dividends by
2,361,090.

`Balance Sheet Data:

Total Assets                                  340,253      315,596      278,512      284,579      276,617

Earning Assets                                304,056      276,677      244,345      250,369      243,224

Investment Securities AFS                      77,311       75,617       62,773       68,768       72,757

Investment Securites HTM                        2,053            0            0            0       11,818

Loans - Net                                   200,759      184,060      167,079      177,115      147,119

Allowance for Loan Losses                       3,665        3,455        3,039        2,920        2,716

Total Deposits                                288,442      265,597      235,192      231,302      243,821

Savings Deposits                               25,869       19,747       17,552       16,714       17,242

Time Deposits                                 110,914      121,093      112,032      105,051      102,957

Long Term Borrowings                            4,738        5,113        3,678        2,423        2,504

Shareholders' Equity                           40,848       37,857       34,429       30,920       27,480


Average Balances:

Total Assets                                  331,612      299,830      285,249      278,081      237,140

Earning Assets                                296,651      268,860      257,788      251,152      214,332

Securities                                     87,954       69,521       67,788       75,395       78,778

Total Loans                                   197,814      179,295      178,263      167,795      126,317

Allowance for Loan Losses                       3,667        3,232        3,006        2,807        2,167

Savings Deposits                               23,006       18,340       16,277       16,764       15,043

Time Deposits                                 114,998      110,189      114,704      103,388       95,429

Long-Term Borrowings                            3,197        4,852        3,539        2,460        2,539

Shareholder's Equity                           40,183       35,790       33,470       28,775       26,979

Other Data:

Number of Employees                               157          146          140          130          124`

---

Release 33-8098 requires
the company to disclose any accounting estimates based on highly uncertain data
and any material impact from adopting an accounting statement or policy.

The primary area in which
there is uncertainty is the potential losses in the loan portfolio. In this
area, an estimate is derived from an analysis of the loan portfolio and the
Allowance for Loan Losses of the loans and the loan types that pose a risk of
being a future loss. To prepare for the potential loss, an increase will be made
to the loan loss reserve, if needed, for the inclusion of the balances or a
percentage of the balances of the identified risks in the loan portfolio. With
the need to increase the Allowance for Loan Losses, an increase will occur in
bad debt expense or the Provision for Loan Losses expense which ultimately
lowers the net income which is reflected on the Income Statement. In addition,
the building up of the Allowance for Loan Losses results in a decrease in the
total assets reflected on the balance sheet by the decrease in the net loan
portfolio. The amount expensed - which is a non-cash transaction - for the
accounting period will be an adjustment on the Statement of Cash Flows. In 2003,
the allocation to Allowance for Loan Losses increased expenses and lowered net
income and net assets by $546 thousand. For future periods, the affect on the
income statement and the balance sheet will be dependent on the amount of loan
charge offs and the strength of the loan portfolio for the accounting period. If
the charge offs decrease and the analysis of the loan portfolio and the
Allowance for Loan Losses determine no additional provisions are required, the
cease or decrease of the accrual estimate will boost income and net assets. See
Allowance and Provision for Loan Losses for more details.

Managements
Discussion and Analysis of Financial Condition and Results of Operations
analyzes the major elements of Security Capital Corporations balance
sheets and statements of income. This section should be read in conjunction with
Security Capital Corporations Consolidated Financial Statements and
accompanying Notes and other detailed information appearing elsewhere in this
report.

This discussion includes
various forward-looking statements with respect to credit quality (including
delinquency trends and the allowance for loan losses), corporate objectives and
other financial and business matters. When used in this discussion the words
anticipate, project, expect,
believe, and similar expressions are intended to identify
forward-looking statements. Security Capital Corporation cautions that these
forward-looking statements are subject to numerous assumptions, risks and
uncertainties, all of which may change over time. Actual results could differ
materially from forward-looking statements.

In addition to factors
disclosed by Security Capital Corporation elsewhere in this report, the
following factors, among others, could cause actual results to differ materially
from such forward-looking statements: exposure to local economic conditions,
interest rate risk, credit quality, risks inherent in consumer and commercial
lending, competition, and the extent and timing of legislative and regulatory
actions and reforms.

---

Security Capital
Corporation earned $5,517,464 or $2.34 per share for 2003, $4,812,292 or $2.04
per share for 2002 and $4,611,110 or $1.95 per share for 2001 representing an
increase of $906,354 or $.39 per share for the period from year 2001 through
year 2003. These changes are due primarily to an increase in service charges on
deposits and a decline in interest rates on deposits, offset by increases in
salaries and employee benefits.

Net interest income is the
most significant component of Security Capital Corporations earnings. Net
interest income is the difference between interest and fees realized on earning
assets, primarily loans and securities, and interest paid on deposits and other
borrowed funds. The net interest income is determined by several factors,
including the volume of earning assets and liabilities, the mix of earning
assets and liabilities and interest rates. Although there are a certain number
of these factors which can be controlled by management policies and actions,
there are certain other factors, such as the general level of credit demand, the
Federal Reserve Board monetary policy, and changes in tax law that are beyond
the control of management.

The increase in net
interest income in 2003 as compared to 2002 is due primarily to the increase in
loans and the decrease in interest expense, which resulted primarily from a
decline in interest rates.

The following table sets
forth the major components of interest earning assets and interest-bearing
liabilities for three consecutive years ending December 31, 2003. In the table
below, the loan interest does not include loan fees and the interest on
securities does not consider discount accretion and premium amortization.

`Security Capital Corporation
                         Table 2 - Average Balances; Interest Earned and Interest Yields



                                                            Years ended December 31,
                                ----------------------------------------------------------------------------------
                                            2003                        2002                      2001
                                ----------------------------------------------------------------------------------
                                 Average             Average  Average          Average  Average          Average
                                 Balance  Interest   Yields   Balance Interest  Yields  Balance Interest  Yields
                                ----------------------------------------------------------------------------------
Assets:
------
Interest-Earning Assets:
-----------------------
Securities                         85,582     3,274      3.83  66,418    3,232     4.87  66,403    3,506     5.28
BV to MV                            2,372                       3,103                     1,385
Total Securities                   87,954     3,274      3.72  69,521    3,232     4.65  67,788    3,506     5.17

Loans (2)
Commercial/Agricultural           138,228     8,409      6.08 124,815    8,241     6.60 133,008   11,390     8.56
Consumer/Installment               55,178     4,559      8.26  49,593    4,348     8.77  37,563    3,649     9.71
Mortgage                            1,565       127      8.12   2,119      187     8.82   4,285      375     8.75
Other Personal Loans                2,843       168      5.91   2,768      229     8.27   3,407      251     7.37
Total Loans                       197,814    13,263      6.70 179,295   13,005     7.25 178,263   15,665     8.79

Other Investments
CDs with Other Banks                  676        28      4.14   2,742      167     6.09   6,851      238     3.47
Federal Funds Sold                  5,412        64      1.18   5,908       98     1.66   4,755      163     3.43
FHLB Account/Bank Accounts          4,795        47      0.98  11,394      177     1.55     131        4     3.05
Total Other                        10,883       139      1.28  20,044      442     2.21  11,737      405     3.45

Total Earning Assets              296,651    16,676      5.62 268,860   16,679     6.20 257,788   19,572     7.59`

---

`Noninterest Earning Assets:
--------------------------
Allowance for Loan Losses          -3,667                      -3,232                    -3,006
Fixed Assets                       11,277                      11,077                     9,307
Other Assets                       14,808                      12,075                    12,274
Cash and Due Froms                 12,543                      11,050                     8,886

Total Noninterest Earning          34,961                      30,970                    27,461
Assets

Total Assets                      331,612                     299,830                   285,249

Liabilities & Shareholder
Equity

Interest-Bearing Liabilities
Deposits:
Interest-Bearing DDA               93,409       931      1.00  79,950    1,072     1.34  70,591    1,559     2.21
Savings Deposits                   22,780       258      1.13  18,127      289     1.59  16,097      324     2.01
Time Deposits                     114,998     2,421      2.11 110,189    2,939     2.67 114,704    5,431     4.73

Total Interest-Bearing Deposits   231,187     3,610      1.56 208,266    4,300     2.06 201,392    7,314     3.63

Borrowed Funds
Short-Term Borrowings                 860        10      1.16     625       10     1.60     931       44     4.73
FHLB Advances- Short/Long-Term      7,985       334      4.18   9,809      459     4.68   7,222      396     5.48

Total Borrowed Funds                8,845       344      3.89  10,434      469     4.49   8,153      440     5.40

Total Interest-Bearing            240,032     3,954      1.65 218,700    4,769     2.18 209,545    7,754     3.70
Liabilities

Non-Interest-Bearing
Liabilities
Non-Interest-Bearing Deposits      47,260                      41,765                    38,917
Other Liabilities                   4,137                       3,575                     3,317

Shareholders' Equity               40,183                      35,790                    33,470

Total Liabilities & SH Equity     331,612                     299,830                   285,249

Net Interest Income &
Interest Rate Spread                         12,722      3.97           11,910     4.02           11,818     3.89

Net Interest Margin                                      4.29                      4.43                      4.58`

The following table sets
forth net interest earning assets and liabilities for 2003, 2002 and 2001.

`Table 3 - Net Interest Earning Assets

                             2003                 2002                  2001
Average Interest
Earning Assets              296,651              268,860              257,788

Average Interest
Bearing Liabilities         240,032              218,700              209,545

Net                          56,619               50,160               48,243`

---

Table 3A - Volume/Rate
Analysis depicts the dollar effect of volume and rate changes from 2001 to 2003.
Variances which were not specifically attributable to volume or rate were
allocated proportionately between rate and volume using the absolute values of
each for a basis for the allocation. Non-accruing loans were included in the
average loan balances used in determining the yields.

`Table 3A - Volume/Rate Analysis

                                  2003 Change from 2002              2002 Change from 2001
                              Volume    Rate       Total        Volume     Rate         Total

INTEREST INCOME:

Loans                             1241    -983            258         75     -2735           -2660

Investment Securities              686    -644             42         80      -350            -270

Other                             -117    -186           -303        184      -147              37

Total Interest Income             1810   -1813             -3        339     -3232           -2893

INTEREST EXPENSE:

Interest Bearing
Demand Deposit Accounts            135    -276           -141        125      -612            -487

Savings Deposits                    53     -84            -31         32       -68             -36

Time Deposits                      101    -619           -518       -121     -2370           -2491

Borrowed Funds                     -62     -63           -125        102       -73              29

Total Interest Expense             227   -1042           -815        138     -3123           -2985

NET INTEREST INCOME               1583    -771            812        201      -109              92`

Non-interest expense
increased by 5.62% from 2001 to 2002 and increased by 5.21 % from 2002 to 2003,
primarily because of increases in salaries and employee benefits. This increase
reflects Security Capital Corporations move into new market areas, namely
Tunica, Robinsonville, Hernando and Pope, that required banking facilities as
well as employees to perform the operational procedures. Also, Security Capital
Corporation provided its Olive Branch location and Hernando location with a new
state of the art building to address the needs of its staff and the increase in
business as well as to present an attractive banking establishment for its
customers. Of course with the establishment of a new facility, other costs are
involved such as utility expense, the purchase of new equipment and the increase
in the maintenance costs of the equipment. In addition to the increase in
employees, salaries and employee benefits normally increase in a range from 3%
to 7% depending the profits and the attainment of performance goals.

---

Non-interest income
increased by $511 thousand from 2002 to 2003 due primarily to a gain of $406
thousand from the sale of stock in a company that had provided credit life and
disability insurance services to the Company.

The following table
provides details on non-interest income and expense for the Years ended December
31, 2001 through 2003.

`Table 4 - Non-Interest Income and Expense
                                                                            For the Year Ended December 31,
                                                                             2003         2002       2001
          Non-Interest Income:
          Trust Department Income                                             876          734        652
          Service Charges: Deposits                                         3,758        3,671      3,456
          Other Operating Income                                             1032          750        483
          Total Non-Interest Income                                         5,666        5,155      4,591

          Non-Interest Expense:
          Salaries & Employee Benefits                                      6,649        6,145      5,598
          Occupancy Expense                                                 1,311        1,267      1,143
          Other Operating Expense                                           2,658        2,680      2,814
          Total Non-Interest Expense                                       10,618       10,092      9,555`

Security Capital
Corporation records a provision for income taxes currently payable, along with a
provision for those taxes in the future. Such deferred taxes arise from
differences in timing of certain items for financial statement reporting rather
than income tax reporting. Security Capital Corporation benefits in its
computation of income taxes due from having tax-exempt securities and loans.

The loan portfolio
constitutes the major earning asset of Security Capital Corporation and in the
opinion of management offers the best alternative for maximizing interest spread
above the cost of funds. The continuing loan growth is primarily due to Security
Capital Corporations move to a market area that is experiencing rapid
growth in the building of residential and commercial structures. Real Estate
Loans and Commercial Loans comprise the largest segment of the loan portfolio.
Commercial loans which bear a higher degree of risk comprise 9.11% of the loan
portfolio at December 31, 2003. Agricultural loans, another type of loan that
carries a higher degree of risk, are only 2.10% of the loan portfolio at
December 31, 2003.

The Board of Directors of
the Corporation has approved guidelines and policies specific for each type
loan. These guidelines are followed under the direction of the President and the
Senior Loan Officer. All loans made above $25,000 will be presented by the
officer originating the loan to a committee of loan officers for a review of the
maker(s), the repayment ability, source of repayment, type and sufficiency of
collateral and length of repayment. The loans reviewed will be compiled into a
report certifying that the loans have been made in accordance with the Board
approved policies and principles. This periodic report is submitted to the
Directors Loan Committee for review and then ratified at the next scheduled
meeting. Each loan officer has an individual lending limit (not to exceed the
legal limit of $250,000) which is awarded based on his or her lending experience
and length of service. Any loan in excess of the loan officers limit must
be approved prior to consummation by the Senior Loan Officer or the President or
the Board of Directors or by a combined lending authority with another loan
officer. All loans or lines of credit over $250,000 must be pre-approved by the
Directors Loan Committee.

---

All loans must have an
ample margin of safety between the loan advance and the current fair value of
the collateral. The benchmark, under normal circumstances, is loan advances for
all types of loans should not to exceed 80% of the current fair value of the
collateral. However, decisions of judgement are needed in special circumstances
and this percentage may be reduced by the abnormality/unusual nature of the
collateral. Documentation of the collateral is properly collected before the
loan transaction is completed and will meet the requirements (to name a few) of
the Mississippi Uniform Commercial Code, the Loan Policy, and all pertinent
regulations. In an effort to secure and to protect the liens of the First
Security Bank, a staff provides loan management with periodic reports
highlighting loan accounts requiring additional documentation. In addition, the
compliance and loan review officer along with the internal audit staff monitor
the procedures on an ongoing basis with reports for management of any
deficiencies.

The composition of the loan
portfolio consists chiefly of real estate, agricultural, consumer and commercial
loans. Real estate loans, in addition to the general collateral and
documentation requirements, require the performance of an appraisal or
evaluation before the credit decision is made. An appraisal is required for all
new real estate loans where the loan amount is $250,000 or greater. All
appraisals must be prepared by a certified appraiser. However, on 1-4 family
residential real estate loans less than $1,000,000, the appraisal may be
prepared by a licensed appraiser. For small loans (less than $250,000), the
appraisals may be performed by a certified or licenced in-house appraiser. Real
estate loans are normally considered a low risk due to the required strength in
collateral. Agricultural loans mandate an extensive review of the
customers farming tract record, financial statements, cash flow
statements, projected income and collateral. The depth of these reviews should
determine the honesty, integrity, the debt status, the repayment ability and the
collateral strength of the farmer. To combat this high risk area, the
banks policy is for production loans to be completely secured with
tangible assets and not to exceed 60% of the projected cash repayment ability.
Consumer loans is another area of high risk due to the type and location of the
collateral and the volatility of the economy which may affect the payback
ability of the customer. The consumer loans normally require the pledging of
collateral. However, up to $10,000 may be extended without the pledging of the
collateral but must be based on the creditworthiness of the loan applicant.
Credit card loans (a very high risk area) - in the consumer group - require a
financial statement submitted in order for a credit limit of $5,000 and over to
be granted. Commercial loans require a review of the purpose and the assessment
of the future benefit of the operation, the financial statements, and the
collateral on the onset to determine the strength of the potential loan asset.
The degree of risks associated with the commercial lending is dependent on the
completeness of the initial loan evaluation process.

The bank monitors its loans
in a manner that the loan portfolio will not represent an excessive risk due to
concentrations of credit from a large volume of economically related assets
advanced to one individual, related groups of borrowers or industry. Loans to
one individual or corporation shall not exceed the limits set by state law.
Mississippi state law states that the limit of lending to one individual or
entity shall not exceed 20% of unimpaired capital and reserves. To keep abreast
of the loan concentrations, a tracking of individual borrowers, related groups
of borrowers and industry groups as well as geographical locations is compiled
in a quarterly report that is presented to the Directors Loan Committee.

---

The following table
reflects outstanding balances by loan types for the past five years.

`Table 5 - Loans by Type

                                                                        December 31,
                                                        2003      2002      2001      2000      1999

Commercial, Financial & Agricultural                     32,878    38,229    34,459    43,539    43,068
Real Estate - Construction & Development                 37,116    27,165    21,183    21,792    15,079
Real Estate - Mortgage                                  103,348    96,737    88,074    82,927    62,699
Installment Loans to Individuals                         28,529    22,602    23,893    28,192    25,834
Other                                                     2,553     2,782     2,509     3,585     3,155

Total Loans                                             204,424   187,515   170,118   180,035   149,835`

The
following table reflects the maturity schedule or repricing frequency of all
loans that will reprice or mature within one year.

`e
                           Table 6 - Loan Liquidity

                                                                12/31
                                                           2003        2002
Loans That Will Reprice or Will Mature:

Within 1 Year                                               120,186    103,781

Over 1 Year:
Variable Rates                                               24,149     32,213
Fixed Rates                                                  60,089     51,521

Total Loans                                                 204,424    187,515`

The provision for loan
losses represent charges made to earnings to maintain an adequate allowance for
loan losses. The allowance is maintained at an amount believed by management to
be sufficient to absorb losses inherent in the credit portfolio. Factors considered in establishing an appropriate allowance
include: a careful assessment of the financial condition of the borrower; a realistic determination for the value and adequacy of
underlying collateral; the condition of the local economy and the condition of the specific industry of the
borrower; a comprehensive analysis of the levels and trends of loan categories;
and review of delinquent and classified loans.

---

Security Capital
Corporation maintains a comprehensive loan review program to evaluate loan
administration, credit quality, and loan documentation. This program includes a
regular review of problem loans, delinquencies, and charge-offs. The adequacy of
the allowance for loan losses is evaluated on a quarterly basis. This evaluation
focuses on specific loan reviews, changes in the type and volume of the loan
portfolio given the current and forecasted economic conditions, and historical loss experience. Any one of the following
conditions may necessitate a review of a specific loan: a question of whether the customer's cash flow or net worth may not be
sufficient to repay the
loan; the loan has been criticized in a regulatory examination; the accrual of
interest has been suspended; serious delinquency; or other reasons where either
the ultimate collectibility of the loan is in question or
the loan has other special or unusual characteristics which require special
monitoring.

Activity in the allowance
for loan losses is reflected in Table 7 - Analysis of Allowance for Loan Losses.
The recorded values of loans and leases actually removed from the consolidated
balance sheets are referred to as charge-offs and, after netting out recoveries
on previously charged-off assets, become net charge-offs. Security Capital Corporation's policy is to charge-off loans, when, in
management's opinion, the loan is deemed uncollectible, although concerted efforts are made to maximize recovery.

`Security Capital Corporation
                                    Table 7 - Allowance for Loan Losses

                                             2003       2002      2001      2000      1999
Balance at
   Beginning of Year                         3,455      3,039     2,920     2,716     1,676

Loans Charged-Off
Commercial, Financial & Agricultural           146         75        58       252       174
Real Estate - Construction &                     4          0
Development
Real Estate - Mortgage                          69         75       121
Installment Loans to Individuals               167        584       666       116       166
Other                                          324          4        21        15         5
Total Charge-Offs                              710        738       866       383       345

Charge-Off Recovered
Commercial, Financial & Agricultural            36          8        18        69       122
Real Estate - Construction &                    26          6         2
Development
Real Estate - Mortgage                           0         39         6         6
Installment Loans to Individuals               104        423       254       185        99
Other                                          208          6         4         1         1
Total Recoveries                               374        482       284       261       222

Net Charge-Offs                                336        256       582       122       123

Current Year Provision                         546        672       701       326       271
Adjustment (1)                                                                          892

Balance at EOY                               3,665      3,455     3,039     2,920     2,716

Loans at EOY                               204,424    187,515   170,118   180,035   149,835`

---

`Security Capital Corporation
                                    Table 7 - Allowance for Loan Losses

                                             2003       2002      2001      2000      1999

Ratio: Allowance to Loans                    1.79%      1.84%     1.79%     1.62%     1.81%

Average Loans                              197,814    179,295   178,263   167,795   126,317

Ratio: Allow. To Avg Loans                   1.85%      1.93%     1.70%     1.74%     2.15%

Ratio:  Net Charge Offs to Average           0.17%      0.14%     0.33%     0.07%     0.10%
Loans

(1) Reserves were obtained with the
acquisition of a branch.

                                Composition of Loan Portfolio by Type at End of Year

                                             2003       2002      2001      2000      1999

Commercial, Financial & Agricultural        32,878     38,229    34,459    43,539    43,068
Real Estate - Construction &                37,116     27,165    21,183    21,792    15,079
Development
Real Estate - Mortgage                     103,348     96,737    88,074    82,927    62,699
Installment Loans to Individuals            28,529     22,602    23,893    28,192    25,834
Other                                        2,553      2,782     2,509     3,585     3,155

Total Loans                                204,424    187,515   170,118   180,035   149,835`

Nonperforming assets and
relative percentages to loan balances are presented in Table 8 - Nonperforming
Assets. The level of nonperforming loans and leases is an important element in
assessing asset quality and the relevant risk in the credit portfolio. Nonperforming loans include non-accrual loans, restructured
loans, and loans delinquent 90 days or more. Loans are classified as non-accrual when management believes that collection of
interest is doubtful,
typically when payments are past due over 90 days, unless well secured and in
the process of collection. Another element associated with asset quality is
other real estate owned (OREO), which represents properties
acquired by Security Capital Corporation through loan defaults by customers.

`Table 8 - Nonperforming Assets

                                                        December 31,
                                        2003      2002      2001      2000      1999
Loans:
Non-accrual                               78       590       495       306       238
90 Days+ Past-Due                        629       307       333       162       447

Total Nonperforming Loans                707       897       828       468       685
As % of Total Loans                    0.35%     0.48%     0.49%     0.26%     0.46%

Other Real Estate                        129       234       228       214         5
As % of Total Loans                    0.06%     0.12%     0.13%     0.12%     0.00%

Loan Loss Reserve                      3,665     3,455     3,039     2,920     2,716

Loan Charge-Offs                         710       738       866       384       345

Total Loans includes Reserve         204,424   187,515   170,118   180,034   149,790`

---

The consolidated reserve
for loan losses reflected in Table 7 are the balances remaining after the charge
offs for the year.

The loan portfolio
contained an aggregate of $78 thousand in non-accrual loans and an aggregate of
$629 thousand of 90 days past due and over as of December 31, 2003. If the
non-accrual loans had been performing loans during the 2003 period, interest
income would have shown an addition of $4 thousand. The 90 days and over past
due loans are not subject to a non-accrual status and interest is accrued and
recognized daily as income. The interest income recognized in 2003 for the loans
classified as 90 days and over past due at December 31, 2003 totaled $57
thousand.

As of December 31, 2003,
four loans (not included in the non-accrual and the 90 day and over totals)
totaling $39 thousand have been identified by loan management as being doubtful
as to the ability of the borrowers to comply with the present loan repayment
terms. Analysis of possible workout plans anticipate a possible deficiency
approximating $25 thousand. The actual deficiency depends on the market for the
equipment and real estate at the time of disposal.

Management believes loans
classified for regulatory purposes as loss, doubtful, or substandard that are
not included in nonperforming or impaired loans do not represent or result from
trends or uncertainties which will have a material impact on future operating
results, liquidity, or capital resources. The most recent safety and soundness
exam conducted by the FDIC as of December 31, 2001identified $3,130,000 as
Substandard loans and $99,000 as Loss loans. These loans have been watched by
management.

In addition to loans
classified for regulatory purposes, management, also, designates certain loans
for internal monitoring purposes in a watch category. Loans may be placed on
managements watch list as a result of delinquent status, concern about the
borrowers financial condition or the value of the collateral securing the
loan, substandard classification during regulatory examinations, or simply as a
result of managements desire to monitor more closely a borrowers
financial condition and performance. Watch category loans may include loans with
loss potential that are still performing and accruing interest and may be
current under the terms of the loan agreement; however, management may have a
significant degree of concern about the borrowers ability to continue to
perform according to the terms of the loan. Loss exposure on these loans is
typically evaluated based primarily upon the estimated liquidation value of the
collateral securing the loan. Also, watch category loans may include credits
which, although adequately secured and performing, reflect a past delinquency
problem or unfavorable financial trends exhibited by the borrower.

---

All watch list loans are
subject to additional scrutiny and monitoring. Security Capital
Corporations policies require loan officers to identify borrowers that
should be monitored in this fashion and believe this process ultimately results
in the identification of problem loans in a more timely fashion. At December 31,
2003, Security Capital Corporation in its Loan Loss Reserve Analysis classified
$4,341,120 with a rating of Watch, $1,109,667 with a rating of Substandard, and
$116,976 with a rating of Doubtful.

All other real estate is
carried by Security Capital Corporation at the lower of cost or market value
less costs to dispose. Any normal expense of holding the other real estate is
expensed as occurred. Any expenses from the other real estate that is
substantial or that extends the life of the asset is capitalized.

An analysis of the loan
portfolio and the loan loss reserve or allowance is conducted on a quarterly
basis by the senior loan administrator and approved by the Board of Directors to
insure that the bank is well protected against any potential and/or unexpected
loan losses. To arrive at the proper grades or classifications needed in the
loan loss reserve analysis, each loan officer reviews each loan in his or her
portfolio. The review process will include consideration of the payment history
of the customer, bankruptcy status, and stimuli in the economy or in the area
that may affect the future cash flow of the customer. The loan officer and/or
the senior loan administrator will grade the loan as exceptional, satisfactory,
watch, substandard or doubtful. This quarterly review and grading process is
conducted on an ongoing basis to identify the loans that are non-performing as
well as loans that no longer require an allocation in the loan loss reserve. The
required reserve will fluctuate from quarter to quarter due to the loan
portfolio performance being monitored.

The composition of the
allowance or reserve for loan losses is based on the risk elements in the loan
portfolio. Loans with the highest risk are graded doubtful. These would be loans
that have been restructured due to poor payment performance, insufficient
collateral to support the loan balance, non-accrual loans and loans that have
been modified due to a change in the financial condition of the borrower to such
an extent that a loss would most normally be expected. Loans with the second
highest risk are graded substandard. These loans normally portray extremely weak
credit with a potential for either partial or total loss which must be
recognized. With these loans, legal action is anticipated with the debt not
being retired through liquidation of the collateral. The next risk level is the
loans that are considered to be on the watch list. These loan
customers display inadequate financial strength or credit to provide loan
management with the assurance that they will meet the scheduled repayment plan.
Loan customers who have filed bankruptcy present a high risk due to likelihood
of the payment plan may not be re-affirmed. Due to the type of collateral or
lack of collateral, consumer loans without real estate are considered another
area of risk requiring more reserves. Agricultural loans, by the nature of the
purpose and the unforeseen elements in the farming process, completes the loans
identified as having more than the normal risks.

---

`Table 8A - Allocation of the Allowance for Loan Losses
                                                 (Dollars in thousands)
                                                     At December 31,

                                    2003                2002               2001             2000                1999
                             ----------------------------------------------------------------------------------------------
                             Amount    Percent    Amount   Percent   Amount  Percent   Amount  Percent     Amount   Percent
                             ----------------------------------------------------------------------------------------------

Commercial, Financial &        856      16.08%     1,006   20.39%      679   20.26%    1,116    24.18%      1,096    28.74%
Agricultural

Real Estate - Construction     461      18.16%       298   14.49%      227   12.45%      230    12.10%        167    10.06%
& Development

Real Estate - Mortgage       1,533      50.56%     1,246   51.59%    1,040   51.77%      968    46.06%        785    41.85%

Installment Loans to           732      13.95%       816   12.05%      859   14.04%      538    15.66%        612    17.24%
Individuals

Other Loans                     26       1.25%        28    1.48%       25    1.48%       36     2.00%         32     2.11%

Unallocated                     57       N/A          61     N/A       209    N/A         32      N/A          24      N/A
                             ----------------------------------------------------------------------------------------------
Total                        3,665     100.00%      3,455 100.00%      3,039  100.00%    2,920  100.00%     2,716   100.00%
                             ==============================================================================================`

At December 31, 1999, the loan loss reserve reflected an increase of
approximately $1 million from the previous year.  This increase was due to the growth of loans - primarily resulting from a bank
purchase in July of 1999.  The growth of the loan portfolio spurred an increase in the potential risk areas.  The loan loss
reserve at December 31, 1999 was composed of the following: 15% of substandard loans, $149 thousand; 50%
of doubtful loans, $48 thousand; 20% of bankruptcy loans, $207 thousand; 10% of
credit card loans, $79 thousand; 4% of agricultural loans, $696
thousand; 2% of consumer loans without real estate collateral, $289 thousand; 3%
of watch loans, $131thousand; and 1% of the remainder of the adjusted loan
portfolio, $1,093 thousand. Changes were made in the risk factor (%)
due to the ongoing analysis of the potential loss elements within the actual
loan categories. The additional risk were allocated with increases in the
following categories at December 31, 1999: 5% for substandard loans; 5% for bankruptcy loans; 1% for agricultural loans; and
..50% for consumer loans without real estate collateral.

---

The loan loss reserve at
December 31, 2000 showed a small increase of $204 thousand from the previous
year, which can be justified by the increase in the loan portfolio. The loan
loss reserve at December 31, 2000 was represented by 15% of
the substandard loans ($101 thousand), 50% of the doubtful loans ($43 thousand),
20% of the bankruptcy loans ($210 thousand), 5% of the credit card loans ($40
thousand), 4% of the agricultural loans ($732 thousand), 2% of the
consumer loans without real estate collateral ($257 thousand), 2% of the watch
loans ($96 thousand) and 1% for the remainder of the adjusted loan portfolio
($1,409 thousand). The primary reasons for major changes in the
allocation from the previous year were: substandard loans decreased from $996
thousand to $676 thousand; consumer loans without real estate collateral dropped
from $14.4 million to $12.8 million; and the risk factor (%) for credit card
loans decreased from 10% to 5%. This decrease in the risk factor for credit card
loans was due to the current analysis of the potential problem accounts along
with the banks historical loss experience factor.

At December 31, 2001, the
loan loss reserve grew approximately $119 thousand from December 31, 2000. The
allocation for substandard loans increased from $101 thousand to $169 thousand
due to the increase in the loans in this risk category from $676 thousand to
$1.1 million. Bankruptcy loans increased by approximately $800 and caused an increase in its loan loss reserve allocation of
$156 thousand.  The loans classified as agricultural loans decreased by approximately $1.6 million.   This decrease with a decrease
in the risk factor of 1.25% created a decrease in
the agricultural loans allocation by $274 thousand. The allocation for consumer
loans without real estate collateral increased by $204 thousand due to the
increase from $12.8 million in 2000 to $23 million in 2001. Other variables in the loan loss reserve allocation remained constant.
The allocation for December 31, 2001 is as follows:  15% of substandard loans, $169 thousand; 50% of doubtful loans, $39 thousand;
20% of bankruptcy loans,
$367 thousand; 5% of credit card loans, $38 thousand; $2.75% of agricultural
loans, $458 thousand; 2% of consumer loans without real estate collateral, $461
thousand; 2% of watch loans, $83 thousand and 1% of the remainder of the adjusted loan portfolio, $1,215 thousand.

At December 31, 2002, the
loan portfolio analysis required an increase in the loan loss reserve. The major
stimulus for the increase was the growth in the loan portfolio from $170 million
to $187.5 million. In addition, increases were made to the risk factors for the
following categories: agricultural loans, 1.25% and consumer loans without real estate collateral, 1%.  These risk factor increases
were the result of a continuing study of the loan quality and the bank's experience record in these categories.  A decrease in the
amount allocated for doubtful loans from $38 thousand to $7 thousand was attributed to a decrease in the balance of
loans with this grade.  The loan loss reserve at December 31, 2002 was allocated as follows: 15% of substandard loans, $201
thousand; 50% of doubtful loans, $7 thousand; 20% of bankruptcy loans, $350 thousand; 5% of
credit card loans, $39 thousand; 4% of agricultural loans, $742 thousand; 3% of
consumer loans without real estate collateral,
$645 thousand; 2% of watch loans, $133 thousand; and 1% of the remainder of the
adjusted loan portfolio, $1,277 thousand.

---

Due to the growth in the
loan portfolio from $187.5 million to $204.4 million during 2003, the loan
portfolio analysis required an increase in the loan loss reserve. Another
stimuli for the growth in the reserve was the increase of 4% in the risk factor for the category of watch loans.  The assigned
risk factors are the result of a continuing study of the loan quality and the bank's experience record in these categories.  The
allocation for doubtful
loans reflected an increase of $17 thousand primarily due to using a specific
allocation instead of the 50% of the loan balance as used in previous periods. A
specific allocation is a deficiency when the balance of the loans
exceeds the market value of the collateral. The loan loss reserve at December
31, 2003 was allocated as follows: 15% of substandard loans, $166 thousand;
specific allocation of doubtful loans, $25 thousand; 20% of bankruptcy
loans, $439 thousand; 5% of credit card loans, $38 thousand; 4% of agricultural
loans, $575 thousand; 2% of consumer loans without real estate collateral, $540
thousand; 6% of watch loans, $260 thousand; and 1% of the
remainder of the adjusted loan portfolio, $1,622 thousand.

Loan charge offs in
2002 and 2003 were $738 and $710 thousand, respectively, reflecting a
significant increase over the average
loan charge offs of $531 thousand for the prior three years. This increase in
loan charge offs created the need for additional provisions for the Allowance
for Loan Losses for 2002 and 2003. Another indication that additions to the Allowance for Loan Losses were needed was the
regulatory exam as of December 31, 2001 in which approximately $3.1 million of loans were classified as substandard.   Recoveries
reflected an increase in
2002 as a result of the diligent efforts by the loan personnel to regain
principal from the classified loan activity. In1999, the purchase of a branch
increased the Allowance for Loan Losses by $892 thousand causing the ratio
of Allowance for Loan Losses to Loans to increase by 27 basis points. In 2000,
the ratio decreased because less provisions were made to the Allowance. The
ratio of the Allowance for Loan Losses to Loan for the other years presented shows a small increase with each year.

Securities are identified
as either Available for Sale or Held to Maturity. Securities held to maturity
are those securities which Security Capital Corporation has both the intent and
the ability to hold to maturity and are reported at the amortized cost.  Securities available for sale are those securities which
Security Capital Corporation may decide to sell if needed for liquidity, asset/liability management or other
reasons.  Securities that are available for sale are reported at market value with the unrealized gains or losses
included as a separate component of equity, net of tax.

---

`Table 9 - Securities

                                                          December 31,
                                            2003      2002      2001      2000      1999

Securities Available for Sale
U. S. Treasuries                             702       713     1,007     1,506     4,504
U. S. Agencies                            28,560    14,924     1,032     4,017    16,916
Mortgage Backed                            9,611    17,260    14,045    14,664    19,028
State, Municipals & Other                 37,447    41,982    45,972    47,899    31,677
Equities                                     991       738       717       682       632

Total Securities Available for Sale       77,311    75,617    62,773    68,768    72,757


Securities Held to Maturity
U. S. Treasuries                               0         0         0         0         0
U. S. Agencies                                 0         0         0         0         0
Mortgage Backed                                0         0         0         0         0
State, Municipals & Other                  2,053         0         0         0    11,818

Total Securities HTM                       2,053         0         0         0    11,818

Total Securities                          79,364    75,617    62,773    68,768    84,575`

The security portfolio is composed of U. S. Treasury securities, U. S. Agency
securities, State and
Municipal securities - both tax-exempt and taxable, equities, and mortgage-backed securities.

---

`Table 10
                  Securities Maturity & Repricing Schedule
                               For 12/31/2003

                                           After 1
                                             Year
                                1 Year       Thru 5     5 to 10     Over 10
                               and Less      Years       Years       Years
Agencies
Fair Value                      19,217        4,296
Book Yield                      4.349%       4.170%

MBS*
Fair Value                         949       13,709
Book Yield                      4.184%       4.964%

Taxable Municipals
Fair Value                         830        1,683         170           86
Book Yield                      6.631%       5.660%      4.782%       4.871%

Municipals
Fair Value                       8,474       21,449       6,808
Book Yield                      4.183%       4.326%      5.339%

Treasuries
Fair Value                         702
Book Yield                      2.862%

Equity-FHLB
Fair Value                                                               987
Book Yield                                                             2.12%

Other Securities                                                           4

Total Fair Values               30,172       41,137       6,978        1,077
Weigh Bk Yields                 4.322%       4.580%      5.325%       2.317%


*Mortgage Backed
Securities`

---

`Table 11 - Securities Weighted Maturity and Tax Equivalent Yield by Classification

                                      December 31, 2003

                                                                         Weighted
                                               Weighted                Tax-Equivalent
                                               Maturity                    Yield

U. S. Treasuries                                .08 Yrs                     2.862%
U. S. Agencies                                13.19 Yrs                     4.345%
Mortgage Backed                                2.77 Yrs                     4.925%
Taxable Municipals                             2.82 Yrs                     6.230%
Tax-Exempt Municipals                          5.52 Yrs                     6.395%

Total Securities Portfolio                     7.54 Yrs                     5.386%`

The weighted tax-equivalent
yields reflected in the table above were calculated using amortized costs and a
tax rate of 34%.

The securities portfolio
carries varying degrees of risk. Investments in U. S. Treasury and U. S. Agency
securities have little or no credit risk. Mortgage-backed securities are
substantially issues of federal agencies. Obligations of states and political
subdivisions are the areas of highest potential credit exposure in the
portfolio. This risk is minimized through the purchase of high quality
investments. When purchased, obligations of states and political subdivisions
and corporate bonds must have a credit rating by Moodys or Standard and
Poors of A or better. The risk of non-rated municipal bonds is
minimized by limiting the amounts invested in local issues. Management believes
the non-rated securities are of high equality. No securities of an individual
issuer exceeded 10% of Security Capital Corporations shareholders
equity as of December 31, 2003. Security Capital Corporation does not use
off-balance sheet derivative financial instruments as defined in Statement of
Financial Accounting Standards No. 119, Disclosure about Derivative
Financial Instruments and Fair Value of Financial Instruments.

Even though the earning
assets have increased over the past years, the security portfolio balances have
not. As securities have matured, the proceeds have been used to fund the
increase in the loan portfolio.

Security Capital
Corporation offers a wide variety of deposit services to individual and
commercial customers, such as non-interest-bearing and interest-bearing checking
accounts, savings accounts, money market deposit accounts, and time deposit. The
deposit base provides the major funding source for earning assets. Total average
deposits have shown steady growth over the past few years. Time deposits
continue to be the largest single source of Security Capital Corporations
deposit base.

---

A five year schedule of
average balances of deposits by type is presented in Table 12. Also, the
maturities of time deposits greater than $100,000 is presented in Table 13.

`Table 12 - Deposit Information

                                 2003             2002            2001             2000              1999
                              Average   Avg    Average  Avg    Average  Avg     Average   Avg    Average     Avg
                              Balance   Rate   Balance  Rate   Balance  Rate    Balance   Rate   Balance    Rate
Noninterest- Bearing
   Demand                      47,034          41,552           38,736           42,321           36,191
   Savings                        226             213              181              205              195
Interest-bearing
   Demand                      93,409  1.01    79,950   1.34    70,591  2.39     73,049   3.14    55,779    2.52
   Savings                     22,780  1.13    18,127   1.58    16,097  2.01     16,560   2.03    14,848    1.98
   Time Deposits              114,998  2.11   110,189   2.67   114,704  4.73    103,388   5.52    95,429    4.62
Total Deposits                278,447         250,031          240,309          235,523          202,442

                   Table 13 - Maturity Ranges of Time Deposits With Balances More Than $100,000
                                              As of December 31, 2003


                  3 Months or Less                                                       24,126
                  Over 3 Months thru 6 Months                                             6,645
                  Over 6 Months thru 12 Months                                            5,032
                  Over 12 Months                                                          8,900
                                                                                      ----------
                                                                                         44,703`

Security Capital
Corporation in its normal course of business will acquire large certificates of
deposit (time deposits), generally from public entities that exhibit a variety
of maturities. These funds are acquired on a bid basis and are considered to be
part of the deposit base of Security Capital Corporation.

---

Aside from the core deposit
base and large denomination certificates of deposit mentioned above, the
remaining funding sources include short-term and long-term borrowings. As of
December 31, 2003, Security Capital Corporations short-term borrowings
consisted of $929,000 of the Treasury Tax and Loan open-end note and $8,238,000
borrowed from the Federal Home Loan Bank. As of December 31, 2002, Security
Capital Corporations short-term borrowings consisted only of the Treasury,
Tax and Loan open-end note in the amount of $316,000 and $4,500,000 borrowed
from the Federal Home Loan Bank. As of December 31, 2001, Security Capital
Corporation had $3,000,000 in borrowings from the Federal Home Loan Bank and
$463,000 in Treasury, Tax and Loan open-end note. Security Capital Corporation
foresees short-term borrowings to be a continued source of liquidity and will
continue to use these borrowings as a method to fund short-term needs.

Security Capital
Corporation at the end of 2003 had long-term debt in the amount of $4,737,799
and $3,500,000 in short-term debt to the Federal Home Loan Bank. The rates on
the debt with Federal Home Loan Bank as of December 31, 2003 ranged from 3.483%
on an advance of $3,500,000 due in 2004 to 6.575% on an advance with a balance
of $1,544,479 due in 2017. The maximum month-end balance during 2003 with
Federal Home Loan Bank occurred in January with a total debt of $9,607,774. The
average outstanding long-term balance was $3,197,276 and the average outstanding
short-term balance was $4,916,667 for debt with Federal Home Loan Bank.

Liquidity management is the
process by which Security Capital Corporation ensures that adequate liquid funds
are available to meet financial commitments on a timely basis. These commitments
including honoring withdrawals by depositors, funding credit obligations to
borrowers, servicing long-term obligations, making shareholder dividend
payments, paying operating expenses, funding capital expenditures and
maintaining reserve requirements. Interest rate risk is the exposure to
Corporation earnings and capital from changes in future interest rates. All
financial institutions assume interest rate risk as an integral part of normal
operations. Managing and measuring the interest rate risk is the process that
ranges from reducing the exposure of Security Capital Corporations
interest margin regarding swings in interest rates assuring that there are
sufficient capital and liquidity to support future balance sheet growth.

Liquidity risk is the risk
to a banks earnings and capital arising from its inability to meet
obligations when they come due without incurring losses. Bank management must
ensure that sufficient funds are available at a reasonable cost to meet
potential demands from both funds providers and borrowers.

Security Capital
Corporation addresses shortterm liquidity from both an asset liquidity and
a liability liquidity viewpoint. Short-term asset liquidity is provided by money
market assets, the investment portfolio, and readily saleable bank assets.
Short-term liability liquidity is measured by the liabilities considered to be
more volatile in nature and more likely to be sensitive to changes in interest
rates. Short-term liquidity is monitored thru the asset/liability reports in a
measure of a coverage ratio and a crisis coverage ratio. These

---

ratios measure the ability
of the bank to raise cash quickly and how many times this cash will cover
volatile liabilities. For December 31, 2003, the coverage ratio was 2.46X -
which was in compliance of the policy limit of 1X. Of this ratio, the calculated
reserves or the source for cash was $58.9 million which would be needed to meet
the demand of the identified volatile liabilities and unused loan commitments of
$14.4 million and $9.6 million, respectively. The crisis ratio looks at the
coverage of volatile liabilities under a scenario where cash is needed
immediately. The crisis ratio for December 31, 2003 was .97X, adequately within
the policy limit of .50X. The identified reserves for a crisis ratio totaled
$43.6 million and the volatile liabilities and unused loan commitments totaled
$44.9 million. Additionally, the bank monitors liquidity by looking at the ratio
of cash and short-term investments versus non-core funding. The liquidity ratio
for December 31, 2003 was in compliance with the policy limit of 15% with a
ratio of 19.11%. This ratio measures the net cash and short-term marketable
assets of $42 million to the net deposits and short-term liabilities of $220
million. The corporations dependency ratio complied with policy with a
ratio of 2.70% at December 31, 2003. This ratio measures the net volatile
liabilities to the earning assets less short-term investments.

Long-term liquidity is the
ability of the bank to maintain its reputation in the market and to produce an
acceptable return to its shareholders. Adverse effects of reputation
deterioration could cause depositors and other funds providers as well as
investors, to seek higher compensation and negatively impact the banks
earnings and capital. If negative public opinion occurred, withdrawals of
funding could become debilitating. The bank will take steps to minimize its
reputation risk and the potential impact on liquidity. One step is to monitor
its reliance on credit-sensitive funding. Another issue that is monitored is
asset growth. Strategic consideration will be given to the development of new
business. A significant component of reputation risk is the underlying credit
underwriting process of the financial institution. Continued stringent
underwriting standards for both existing and for new business will be employed.
Additionally, concentrations of credit will be closely monitored.

At December 31, 2003, we
had outstanding loan origination commitments and unused commercial and
commercial and retail lines of credit of $29.6 million. Letters of credit
commitments totaling $11.2 million consisted of financial standby letters of
credit of $7 million, performance standby letters of credit of $638 thousand and
commercial letters of credit of $3.6 million. We anticipate that we will have
sufficient funds available to meet current origination and other lending
commitments. As a contingency plan for significant funding needs, the
Asset/Liability Management Committee may also consider the sale of securities,
sale of loans and/or the temporary curtailment of lending activities.
Certificates of deposit that are scheduled to mature within one year totaled
approximately $74 million at December 31, 2003. We expect to retain a
substantial majority of these certificates of deposit.

---

The asset/liability
committee is responsible for managing liquidity issues and interest rate risk,
among other matters. Various interest rate movements are factored into a
simulation model to assist the asset/liability committee in assessing interest
rate risk. The committee analyzes the results of the simulation model to
formulate strategies to effectively manage the interest rate risk that may
exist.

The liquidity of Security
Capital Corporation is dependent on the receipt of dividends from First Security
Bank. Management expects that in the aggregate, First Security Bank will
continue to have the ability to provide adequate funds to Security Capital
Corporation.

The Interest Rate Risk
Management System is comprised of six different steps. They are: Board
Oversight; Senior Management Oversight; Risk Limits and Controls; Risk
Identification and Measurement; Risk Monitoring and Reporting; and Independent
Review. A strategic plan highlighting risk tolerance levels is established and
monitored by the Board. Senior management implements the strategic plan of
goals, objectives and risk limits. Risk limits are set for Earnings at Risk, Gap
Analysis, Economic Value and Value at Risk. The status of liquidity and rate
sensitivity is forecasted in a quarterly report, Asset/Liability Performance
Analysis which is provided by an independent outside organization. The resulting
analysis report notifies Security Capital Corporation of compliance with the
limitations/goals established by Security Capital Corporation and regulatory
agencies as well as projecting a flat rate scenario where rates do not change
from the starting point of the analysis, the scenario of rates increasing by 200
and 300 basis points and the scenario of rates decreasing by 200 or 300 basis
points.

The areas of interest rate
risk which Security Capital Corporation is susceptible are Repricing Risk,
Option Risk and Yield Curve/Basis Risk. Repricing Risk is the difference in the
timing of the assets and the liabilities due to either maturities or repricing
within a certain time frame. Option Risk is the interest rate related options
embedded in the banks assets and liabilities which change the cash flow
characteristics of the assets and liabilities. Yield Curve/Basis Risk are the
changes in the relationship between different interest rates with the same
maturity or interest rates across a maturity spectrum which create compression
or expansion of net interest margins.

Gap Analysis is the
analytical tools that places maturing and repricing assets and liabilities into
time buckets to measure the short and long term pricing imbalances for a given
period. The broad guidelines set by Security Capital Corporation for this
measure are set in time frames of three months, six months, and twelve months
with a +/- cumulative gap position limit of 30%. Earnings at Risk (EAR), another
analysis tool, is considered managements best source of managing
short-term interest rate risk (in a one-year time frame.) The EAR variance is
the percentage change in net interest income over 12 months relative to the base
case scenario (with rates being flat) for a +/- instantaneous parallel movement.
The first limit or level is set at 10% of net interest income which will serve
as a warning to management. The second level of 15% represents a risk

---

earnings and is not
acceptable to management. When this occurs, an explanation of the variance is
reported to Asset/Liability Committee and to the Board of Directors with an
action plan to decrease the variance. Among the possible actions are loan sales,
use of FHLB borrowings and investment portfolio restructuring. Economic Value of
Equity is the tool for measuring long-term interest rate risk. This tool
measures the long-term safety and soundness of the institution being compromised
for the sake of short-term results. The two limits of Economic Value of Equity
are level I designated having a variance of 30-39% and level II designated
having a variance of 40% or higher and uses the same concern or action level as
for Earnings at Risk.

The analysis performed
using December 31, 2003 data projecting for the period ending December 31, 2004
reflected the net interest income at $13.3 million. There were no exceptions to
policy for the 12 month period. Return on Assets and Return on Equity continue
to be in-line with the prior quarter actuals at 1.72% and 14.19%, respectively.
Historical comparison show a third quarter of 1.80% Return on Assets and 14.08 %
Return on Equity. This model shows asset sensitivity as rates ramp up. The net
interest income increases 3.15% in the 200 ramp up and 5.63% in the up 300 ramp.
Economic Value of Equity increased 10.60% in the up 200 ramp. The down 200 ramp
results in a decrease to net interest income of 3.30% which is well within the
policy limit of 10%. As rates move down 100 basis points we see a decrease in
net interest income of 1.83% . The recommendations from the analysis is to move
available funds from Fed Funds (a waiting on the
Fed strategy) to a one time callable agency security to minimize the
extension exposure.

First Security Banks
source of funding is predominantly core deposits consisting of both commercial
and individual deposits, maturities of securities, repayments of loan principal
and interest, federal funds purchased, and long-term borrowings from the FHLB.
With the deposit base being diversified between individual and commercial
accounts, First Security Bank avoids dependence on large concentrations of
funds. Security Capital Corporation does not solicit certificates of deposit
from brokers. The primary sources of liquidity on the asset side of the balance
sheet are federal funds sold and securities classified as available for sale.
Most of the investment securities portfolio are classified in the available for
sale category and are subject to be sold should liquidity needs arise.

In 2001, the funds provided
by operation activities increased to $6.6 million. With a decrease in loan
demand of $9 million and a decrease in the securities portfolio of approximately
$7 million, the funds available were used to repay federal funds purchased and
to reduce borrowings by $9.4 million. Other major sources of funds were an
increase in deposits of $3.8 million and the other major uses were to pay cash
dividends on common stock of $1.8 million and to provide funds of $3.1 million
for the building of new branches and the purchase of new equipment.

---

Along with the cash
provided by operations of $5.6 million in 2002, the cash available for use was
provided by an increase of deposits of $30 million and a net increase of
borrowings of $2.8 million. These funds were used to provide for an increase in
loan demand of $17.6 million, the increase of an investment of $12.4 million in
securities, the paying of a cash dividend of $2 million, the increase of $8.6
million in federal funds sold, the addition of buildings and equipment of $1.6
million and the purchase of bank owned life insurance of $3 million.

In 2003, funds available
for use were basically provided by net income adjusted for non-cash transactions
for a total of $6.8 million, maturities and calls of securities of $47 million,
long-term debt advances of $3.2 million and withdrawal of certificates of
deposits of $1.3 million. The major use of the funds provided were to invest
$52.8 million in securities and $16.9 million in loans. Further funding was
provided by the increase of deposits of $22.8 million. Other cash uses during
2003 were to fund the cash dividends paid on common stock ($2.2 million) and to
retire debt of $4 million.

Table 14 - Funding Uses and
Sources details the main components of cash flows for 2001 thru 2003.

`Table 14 - Funding Uses and Sources

                                           2003                             2002                           2001
                                          Increase                        Increase                        Increase
                               Average   (Decrease)           Average    (Decrease)            Average   (Decrease)
                               Balance     Amount       %     Balance      Amount        %     Balance     Amount       %
Funding Uses
Loans                          197,814     18,519     10.33   179,295        1,032      0.58   178,263      10,468     6.24
Securities*                     85,582     19,164     28.85    66,418           15      0.02    66,403     -10,200   -13.32
Federal Funds Sold               5,412       -496     -8.40     5,908        1,153     24.25     4,755       2,398   101.74
                               288,808     37,187     14.78   251,621        2,200      0.88   249,421       2,666     1.08

Funding Sources
Noninterest Bearing
Deposits
   Demand Deposits              47,034      5,482     13.19    41,552        2,816      7.27    38,736      -3,585    -8.47
   Savings Deposits                226         13      6.10       213           32     17.68       181         -24   -11.71
Interest Bearing Deposits
   Demand Deposits              93,409     13,459     16.83    79,950        9,359     13.26    70,591      -2,458    -3.36
   Savings Deposits             22,780      4,653     25.67    18,127        2,030     12.61    16,097        -463    -2.80
   Time Deposits               114,998      4,809      4.36   110,189       -4,515     -3.94   114,704      11,316    10.95
Borrowings                       8,845     -1,589    -15.23    10,434        2,281     27.98     8,153      -2,839   -25.83
                               287,292     26,827     10.30   260,465       12,003      4.83   248,462       1,947     0.79

*Cost basis is used for
securities instead of
market values.`

---

Table 15 - Liquidity and
Interest Rate Sensitivity reflects interest earning assets and interest-bearing
liabilities by maturity distribution. Product lines repricing in time periods
predetermined by contractual agreements are included in the respective maturity
categories.

`Table 15 - Liquidity; Interest Rate Sensitivity


                                                                 As of December 31, 2003
                                                 Less     Over 3 Mos     Over 1 yr     Over
                                                3 Mos     thru 1 Yr      thru 3 Yrs    3 Yrs       Total
       Interest Earning Assets
       Loans                                    96,778       23,424         35,070     49,152     204,424
       Short-Term Investments                   21,574                                             21,574
       Investment Securities                     8,021        4,367         14,653     52,323      79,364
       Total Interest Earning Assets           126,373       27,791         49,723    101,475     305,362

       Interest Bearing Liabilities
       NOW                                      10,420                                 31,259      41,679
       Money Market                             17,540                                 52,620      70,160
       Savings Deposits                          6,467                                 19,402      25,869
       Time Deposits                            40,687       33,805         24,424     11,998     110,914
       Short-Term Borrowings                     4,429                                              4,429
       Long-Term Borrowings                         42          128            366      4,202       4,738
       Total Interest Bearing Liabilities       79,585       33,933         24,790    119,481     257,789

       Rate Sensitive Assets (RSA)             126,373      154,164        203,887    305,362     305,362
       Rate Sensitive Liabilities (RSL)         79,585      113,518        138,308    257,789     257,789
       Rate Sensitive Gap                       46,788       -6,142         24,933    -18,006      47,573
       Rate Sensitive Cumulative Gap            46,788       40,646         65,579     47,573      47,573
       Cumulative % of Earning Assets           15.32%       13.31%         21.48%     15.58%      15.58%
       Cumulative % of Total Assets             13.75%       11.95%         19.27%     13.98%      13.98%`

---

Interest rate risk can also
be measured by analyzing the extent to which the repricing of assets and
liabilities are mismatched to create an interest sensitivity gap. An
asset or liability is said to be interest rate sensitive within a specific time
period. The interest rate sensitivity gap is defined as the difference between
the amount of interest earning assets maturing or repricing within a specific
time period and the amount of interest bearing liabilities maturing or repricing
within that same 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 amount of interest rate sensitive assets.
During a period of rising interest rates, therefore, a negative gap would tend
to adversely affect the net interest income. Conversely, during a period of
falling interest rates, a negative gap position would tend to result in an
increase in net interest income.

As of December 31, 2003,
Security Capital Corporation had a positive gap of 20.74% in a 12 month time
frame in a rate ramp of 200, well within the policy of a +/- 35.

Certain shortcomings are
inherent in the method of analysis presented in the foregoing table. For
example, although certain assets and liabilities may have similar maturities or
periods to repricing, they may react in different degrees to changes in market
interest rates. Also, the interest rates on certain types of assets and
liabilities may fluctuate in advance of changes in market interest rates, while
interest rates on other types of assets may lag behind changes in market rates.
Additionally, in the event of a change in interest rates, prepayment and early
withdrawal levels would likely deviate significantly from those assumed in
calculating the table. Therefore, we do not rely solely on a gap analysis to
manage our interest rate risk, but rather we use what we believe to be the more
reliable simulation model - relating to changes in net interest income.

Based on simulation
modeling at December 31, 2003 and December 31, 2002, our net interest income
would change over a one-year time period due to changes in interest rates as
follows:

`Table 15A - Change in Net Interest Income Over One Year Horizon

                                                              (Dollars in Thousands)
                                                at December 31, 2003           at December 31, 2002
                                              --------------------------     -------------------------
                                                 Dollar         %              Dollar         %
Changes in Levels of Interest Rates              Change       Change           Change       Change
                                              --------------------------     -------------------------

               Increase 2.00%                         $418        3.15%             $699        5.69%
               Increase 1.00%                          195        1.47%              400        3.25%
               Decrease 1.00%                         -243       -1.83%             -149       -1.21%
               Decrease 2.00%                         -439       -3.31%             -390       -3.17%`

---

Analysis of the simulation
presented indicates as of December 31, 2002 there is little short term interest
rate risk as the projected decrease in net interest income would be limited to
3.17% in a down 200 basis point rate ramp. As of December 31, 2003, the asset
sensitivity is evident as reflected in the projected 3.15% increase in the up
200 ramp. The down 200 ramp as of December 31, 2003 results in a decrease to net
interest income of 3.31%, well within the policy limit of (10%).

Security Capital
Corporation and First Security Bank are subject to various regulatory capital
guidelines as required by federal and state banking agencies, as discussed in
greater detail under Item 1 hereof. These guidelines define the various
components of core capital and assign risk weights to various categories of
assets.

The Federal Deposit
Insurance Corporation Improvement Act of 1991 (FDICIA) requires
federal regulatory agencies to define capital tiers. These are: well
capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized, and critically undercapitalized. Under these regulations, a
well-capitalized institution must achieve a Tier I risk-based
capital ration of at least 6.00%, and a total capital ratio of at least 10.00%,
and a leverage ratio of at least 5.00% and not be under a capital directive
order. Failure to meet capital requirements can initiate regulatory action that
could have a direct material effect on Security Capital Corporations
financial statements. If adequately capitalized, regulatory approval is required
to accept brokered deposits. If undercapitalized, capital distributions, asset
growth and expansion is limited, in addition to the institution being required
to submit a capital restoration plan.

Management believes
Security Capital Corporation and First Security Bank meet all the capital
requirements as of December 31, 2003, as noted below in Table 16 - Capital
Ratios, and is well-capitalized under the guidelines established by the banking
regulators. To be well-capitalized, Security Capital Corporation and First
Security Bank must maintain the prompt corrective action capital guidelines
described above.

Security Capital
Corporation increased the amount of dividends paid to $2,243,187 in 2003
compared to $2,022,867 in 2002, an increase of $220,320 or 10.89%.

---

`Table 16 - Capital Ratios
                                                                           As of December 31,
                                                                        2003      2002      2001
                 Tier 1 Capital
                 Total Tier 1 Capital                                  35,690    32,496    29,714

                 Total Capital
                 Tier 1 Capital                                        35,690    32,496    29,194
                 Allowable Allowance for Loan Losses                    2,940     2,738     2,426
                 Total Capital                                         38,630    35,234    32,140

                 Risk Weighted Assets
                 Net Average Assets                                   334,653   313,327   276,204
                 Total Risk Weighted Assets                           234,441   218,363   193,504

                 Risk Based Ratios
                 Tier 1 Leverage Ratio                                  10.79     10.50     10.76
                 Tier 1 Risk Based Capital Ratio                        15.22     14.88     15.36
                 Total Risk Based Capital Ratio                         16.48     16.14     16.61`

There were no off-balance
sheet arrangements existing at December 31, 2003.

`Payment due by period

Contractual Obligations                  Total     Less than 1 year      1-3 years      3-5 years     More than 5
                                                                                                         years

Long-Term Debt Obligations                  4,738               284            611           676          3,167
Capital Lease Obligations                       0                 0              0             0              0
Operating Lease Obligations                    38                10             18            10              0
Purchase Obligations                         1807              1807              0             0              0
Other Long-Term Liabilities                     0                 0              0             0              0
Reflected on the Registrant's
Balance Sheet under GAAP

Total                                        6583              2101            629           686           3167`

---

Market risk is the
potential of loss arising from adverse changes in interest rates and prices. The
Company is exposed to market risk as a consequence of the normal course of
conducting its business activities. Financial products that expose the Company
to market risk include investment securities, loans, deposits and debt. The
Companys market risk management process involves measuring, monitoring,
controlling and managing risks that can significantly impact the Companys
financial position and operating results. In this management process, market
risks are balanced with expected returns in an effort to enhance earnings
performance and shareholder value, while limiting the volatility of each..
Normal business transactions expose the Companys balance sheet profile to
varying degrees of market risk. The Companys primary market risk exposure
is interest rate risk. A key element in the process of managing market risk
involves oversight by senior management and the Board of Directors as to the
level of such risk assumed by the Company in its balance sheet. The Board of
Directors reviews and approves risk management policies, including risk limits
and guidelines and delegates oversight functions to the Asset Liability
Management Committee (ALCO). The ALCO, consisting of senior business
and finance officers, monitors the Companys market risk exposure and as
market conditions dictate, modifies balance sheet positions.

`SECURITY CAPITAL CORPORATION

                                                  CONSOLIDATED BALANCE SHEETS

                                                  DECEMBER 31, 2003 AND 2002

                                                                                                      2003            2002
                                                                                                 ------------    ------------
           ASSETS                                                                                       (In thousands)

Cash and due from banks                                                                          $     14,380    $     13,578
Interest-bearing deposits with banks                                                                      702             127
                                                                                                 ------------    ------------
    Total cash and cash equivalents                                                                    15,082          13,705
Federal funds sold                                                                                     20,380          15,760
Certificates of deposit with other banks                                                                  492           1,851
Securities available-for-sale                                                                          77,311          75,617
Securities held-to-maturity (estimated fair value
    of $2,053 in 2003 and $ -0- in 2002)                                                                2,053            -
                                                                                                 ------------    ------------
        Total securities                                                                               79,364          75,617
Loans, less allowance for loan losses of
    $3,665 in 2003 and $3,455 in 2002                                                                 200,759         184,060
Interest receivable                                                                                     2,414           2,699
Premises and equipment                                                                                 12,804          12,995
Intangible assets                                                                                       3,874           3,734
Cash surrender value of life insurance                                                                  3,358           3,079
Customers' liability on acceptances                                                                       987           1,042
Other assets                                                                                              739           1,054
                                                                                                 ------------    ------------
Total Assets                                                                                      $   340,253    $    315,596
                                                                                                 ============    ============

           LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
    Noninterest-bearing deposits                                                                 $     39,820    $     32,278
    Interest-bearing deposits                                                                         248,622         233,319
                                                                                                 ------------    ------------
Total deposits                                                                                        288,442         265,597
    Interest payable                                                                                      518             714
    Acceptances outstanding                                                                               987           1,042
    Borrowed funds                                                                                      9,167           9,929
    Other liabilities                                                                                     291             457
                                                                                                 ------------    ------------
        Total liabilities                                                                             299,405         277,739
                                                                                                 ------------    ------------
Shareholders' equity:
    Common stock - $5 par value, 5,000,000 shares
        authorized, 2,380,154 shares and 2,267,697
        shares issued in 2003 and 2002, respectively                                                   11,900          11,338
    Surplus                                                                                            24,862          22,311
    Retained earnings                                                                                   2,891           2,681
Accumulated other comprehensive income                                                                  1,285           1,627
    Treasury stock, at par, 18,005 shares and 20,006
        shares in 2003 and 2002, respectively                                                             (90)           (100)
                                                                                                 ------------    ------------
           Total shareholders' equity                                                                  40,848          37,857
                                                                                                 ------------    ------------
Total Liabilities and Shareholders' Equity                                                       $    340,253    $     315,59
                                                                                                 ============    ============

                               The accompanying notes are an integral part of these statements.`

---

`SECURITY CAPITAL CORPORATION

                                               CONSOLIDATED STATEMENTS OF INCOME

                                         YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001



                                                                                     2003             2002            2001
                                                                               --------------    ------------     -----------
                                                                                     (In thousands, except per share data)
INTEREST INCOME
Interest and fees on loans                                                      $      13,584    $     13,175     $    15,817
Interest and dividends on securities:
    Taxable                                                                             1,597           1,308           1,292
    Tax-exempt                                                                          1,659           1,902           2,214
Other                                                                                     169             462             511
                                                                                -------------    ------------     -----------
    Total interest income                                                              17,009          16,847          19,834
                                                                                -------------    ------------     -----------

INTEREST EXPENSE
Interest on time deposits of $100,000 or more                                             936           1,052           2,066
Interest on other deposits                                                              2,675           3,239           5,237
Interest on borrowed funds                                                                344             469             441
                                                                                -------------    ------------     -----------
    Total interest expense                                                              3,955           4,760           7,744
                                                                                -------------    ------------     -----------

Net interest income                                                                    13,054          12,087          12,090

Provision for loan losses                                                                 546             672             701
                                                                                -------------    ------------     -----------
    Net interest income after provision for loan losses                                12,508          11,415          11,389
                                                                                -------------    ------------     -----------

OTHER INCOME
Service charges on deposit accounts                                                     3,758           3,671           3,456
Other service charges and fees                                                            299             297             243
Trust Department income                                                                   876             734             652
Securities gains (losses), net                                                              1            -                 (3)
Gain (loss) on sale of other assets, net                                                  423             227             (20)
Other                                                                                     309             226             263
                                                                                -------------    ------------     -----------
    Total other income                                                                  5,666           5,155           4,591
                                                                                -------------    ------------     -----------

OTHER EXPENSE
Salaries and employee benefits                                                          6,649           6,145           5,598
Net occupancy expense                                                                     766             584             520
Furniture and equipment expense                                                           545             683             623
Goodwill amortization                                                                    -               -                364
Printing, stationery, and supplies                                                        251             225             247
Data processing                                                                           254             198             139
Directors' fees                                                                           234             217             226
Professional fees                                                                         232             152              88
Other                                                                                   1,687           1,888           1,750
                                                                                -------------    ------------     -----------
    Total other expense                                                                10,618          10,092           9,555
                                                                                -------------    ------------     -----------

Income before income taxes                                                              7,556           6,478           6,425
Income taxes                                                                            2,039           1,666           1,814
                                                                                -------------    ------------     -----------

Net income                                                                      $       5,517    $      4,812     $     4,611
                                                                                =============    ============     ===========

Net income per share:
    Basic                                                                       $        2.34    $       2.04     $      1.95
    Diluted                                                                              2.34            2.04            1.95

                               The accompanying notes are an integral part of these statements.`

---

`SECURITY CAPITAL CORPORATION

                                  CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

                                         YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

                                                        (In thousands)

                                                                                                          Accumulated
                                                                                                             Other
                                                    Comprehensive  Common               Retained   Treasury Comprehensive
                                                       Income      Stock     Surplus    Earnings     Stock    Income      Total
                                                     -----------  --------  ---------  ----------  -------- ------------  --------


Balance, January 1, 2001                                           $10,293   $17,755      2,719     $  (96)   $  249      $ 30,920

    Comprehensive income:
        Net income for 2001                           $  4,611       -           -         4,611        -        -           4,611
        Net change in unrealized gain (loss) on
           securities available-for-sale, net of tax       732       -           -          -           -        732           732
                                                      --------
        Comprehensive income                          $  5,343
                                                      ========

    Cash dividends paid                                              -           -        (1,819)       -        -          (1,819)
    5% stock dividend                                                 510       2,192     (2,702)       -        -             -
    Purchase of fractional shares                                    -             (5)      -             (1)    -              (6)
    Purchase of treasury stock                                       -             (7)      -             (2)    -              (9)
                                                                  --------  ---------  ----------  -------- ------------  --------

Balance, December 31, 2001                                         10,803      19,935      2,809         (99)    981        34,429

    Comprehensive income:
        Net income for 2002                           $  4,812        -          -         4,812        -        -           4,812
        Net change in unrealized gain (loss) on
           securities available-for-sale, net of tax       646        -          -          -           -        646           646
                                                      --------
        Comprehensive income                          $  5,458
                                                      ========

    Cash dividends paid                                               -          -        (2,023)       -        -         (2,023)
    5% stock dividend                                                  535      2,382     (2,917)       -        -            -
    Purchase of fractional shares                                     -            (7)      -             (2)    -             (9)
    Purchase of treasury stock                                        -            (3)      -           -        -             (3)
    Reissuance of treasury stock                                      -             4       -              1     -               5
                                                                  --------  ---------  ----------  -------- ------------  --------

Balance, December 31, 2002                                          11,338     22,311      2,681        (100)  1,627        37,857

                                                        ( Continued )

                               The accompanying notes are an integral part of these statements.`

---

`SECURITY CAPITAL CORPORATION

                                  CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

                                         YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

                                                        (In thousands)

                                                                                                            Accumulated
                                                                                                               Other
                                                    Comprehensive    Common              Retained   Treasury Comprehensive
                                                          Income      Stock   Surplus    Earnings   Stock      Income      Total
                                                     ------------   -------  --------   ---------   -------- -----------  --------

Balance, December 31, 2002 (brought forward)                          11,338   22,311    $ 2,681
$   (100)  $  1,627                                     $ 37,857

    Comprehensive income:
        Net income for 2003                             $  5,517         -        -         5,517      -          -        5,517
        Net change in unrealized gain (loss) on
           securities available-for-sale, net of tax        (342)        -        -          -         -          (342)     (342)
                                                        --------
        Comprehensive income                            $  5,175
                                                        ========

    Cash dividends paid                                                  -        -        (2,243)     -          -       (2,243)
    5% stock dividend                                                     562    2,502     (3,064)     -          -         -
    Purchase of fractional shares                                        -          (8)      -           (2)      -          (10)
    Reissuance of treasury stock                                         -          57       -           12       -           69
                                                                    -------  --------   ---------   -------- -----------  --------
Balance, December 31, 2003                                          $  11,900   24,862      2,891  $   (90)   $  1,285   $ 40,848
                                                                    =======  ========   =========   ======== ===========  ========





                               The accompanying notes are an integral part of these statements.`

---

`SECURITY CAPITAL CORPORATION

                                             CONSOLIDATED STATEMENTS OF CASH FLOWS

                                         YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001



                                                                                     2003             2002            2001
                                                                                 ------------    ------------     ------------
                                                                                                 (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                                       $      5,517     $     4,812    $       4,611
Adjustments to reconcile net income to net cash
    provided by operating activities:
        Provision for loan losses                                                         546             672              701
        Amortization of premiums and discounts on
           securities, net                                                              1,408             538              199
        Depreciation and amortization                                                     710             742            1,049
        Deferred income taxes                                                              37            (133)             (60)
        FHLB stock dividend                                                               (23)            (21)             (34)
        (Gain) loss on sale of securities, net                                             (1)              -                3
        (Gain) loss on sale of other assets, net                                         (423)           (227)              20
        Changes in:
           Interest receivable                                                            285             (29)             663
           Cash value of life insurance, net                                             (158)            (79)               -
           Other assets                                                                  (761)           (316)            (186)
           Interest payable                                                              (196)           (261)            (592)
           Other liabilities                                                              (54)           (192)             (25)
                                                                                 ------------    ------------     ------------

Net cash provided by operating activities                                               6,887           5,506            6,349
                                                                                 ------------    ------------     ------------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of securities available-for-sale                                             (50,712)        (27,616)          (7,945)
Proceeds of maturities and calls of securities
    available-for-sale                                                                 47,090          15,284           14,941
Purchase of securities held to maturity                                                (2,054)              -                -
Additions to premises and equipment                                                      (451)         (1,626)          (3,167)
Proceeds of sale of other assets                                                          898             337              232
Purchase of bank-owned life insurance                                                       -          (3,000)               -
Changes in:
    Loans                                                                             (16,918)        (17,611)           9,336
    Federal funds sold                                                                 (4,620)         (8,610)          (7,150)
    Certificates of deposits with other banks                                           1,359           1,075            1,479
                                                                                 ------------    ------------     ------------

Net cash provided by (used in) investing activities                                   (25,408)        (41,767)           7,726
                                                                                 ------------    ------------     ------------

                                                        ( Continued )

                               The accompanying notes are an integral part of these statements.`

---

`SECURITY CAPITAL CORPORATION

                                             CONSOLIDATED STATEMENTS OF CASH FLOWS

                                         YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001



(Continued)                                                                          2003             2002             2001
                                                                                  ----------       -----------     -----------
                                                                                                 (In thousands)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid on common stock                                                  $      (2,243)   $     (2,023)    $    (1,820)
Purchase of treasury stock                                                                  -              (3)             (9)
Reissuance of treasury stock                                                               68               5               -
Purchase of fractional shares                                                             (10)             (9)             (6)
Repayment of debt                                                                      (4,030)         (3,212)         (9,496)
Proceeds from issuance of debt                                                          3,268           6,000           2,000
Changes in:
    Deposits                                                                           22,845          30,405           3,890
    Federal funds purchased                                                                 -               -          (5,000)
                                                                                -------------    ------------     -----------

Net cash provided by (used in) financing activities                                    19,898          31,163         (10,441)
                                                                                -------------    ------------     -----------

Net increase (decrease) in cash and cash equivalents                                    1,377          (5,098)          3,634

Cash and cash equivalents at beginning of year                                         13,705          18,803          15,169
                                                                                -------------    ------------     -----------

Cash and cash equivalents at end of year                                        $      15,082    $     13,705     $    18,803
                                                                                =============    ============     ===========


Supplemental Disclosures of Cash Flow Information

    Cash paid during the year for:
        Interest                                                                $       4,150    $      5,021     $     8,336
        Income taxes                                                                    2,002           1,655           1,789

    Noncash activities:
        Transfers of loans to other real estate and
           repossessed inventory                                                          228              42             268








                               The accompanying notes are an integral part of these statements.`

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Security Capital
Corporation (Corporation), and its subsidiaries, follow accounting principles
generally accepted in the United States of America, including, where applicable,
general practices within the banking industry.

The consolidated financial
statements include the accounts of Security Capital Corporation, a one-bank
holding company, and its wholly-owned subsidiaries, First Security Bank (Bank),
Batesville Security Building Corporation (Building Corporation), and Banks
wholly-owned subsidiary, First Security Insurance, Inc. (Insurance). Significant
intercompany accounts and transactions have been eliminated.

The Corporation is a
financial holding company. Its primary asset is its investment in its subsidiary
bank. The Bank operates under a state bank charter and provides full banking
services, including trust services. The Bank is subject to regulation by the
Mississippi Department of Banking and Consumer Finance, and the Federal Deposit
Insurance Corporation (FDIC). The area served by the Bank is primarily the
northern half of Mississippi, and services are provided in branch locations at
Batesville, Marks, Sardis, Como, Crenshaw, Olive Branch, Hernando, Robinsville,
Tunica, and Pope. The operations of the Building Corporation and Insurance are
not material in relation to the Corporation as a whole.

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

The Banks loans are
generally secured by specific items of collateral including real property,
consumer assets, and business assets. Although the Bank has a diversified loan
portfolio, a substantial portion of its debtors ability to honor their
contracts is dependent on local economic conditions in the agricultural and real
estate development industries.

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

While management uses
available information to recognize losses on loans, further reductions in the
carrying amounts of loans may be necessary based on changes in local economic
conditions. In addition, regulatory agencies, as an integral part of their
examination process, periodically review the estimated losses on loans. Such
agencies may require the Bank to recognize additional losses based on their
judgments about information available to them at the time of their examination.
Because of these factors, it is reasonably possible that the estimated losses on
loans may change materially in the near term. However, the amount of the change
that is reasonably possible cannot be estimated.

Investments in securities
are classified into three categories and are accounted for as follows:

Securities classified as
available-for-sale are those securities that are intended to be held for an
indefinite period of time, but not necessarily to maturity. Any decision to sell
a security classified as available-for-sale would be based on various factors,
including movements in interest rates, liquidity needs, security risk
assessments, changes in the mix of assets and liabilities and other similar
factors. These securities are carried at their estimated fair value, and the net
unrealized gain or loss is reported as accumulated other comprehensive income,
net of tax, until realized. Premiums and discounts are recognized in interest
income using the interest method.

Gains and losses on the
sale of securities available-for-sale are determined using the adjusted cost of
the specific security sold.

Securities classified as
held-to-maturity are those securities for which there is a positive intent and
ability to hold to maturity. These securities are carried at cost adjusted for
amortization of premium and accretion of discount, computed by the interest
method. There were no securities held-to-maturity at December 31, 2002.

Trading account securities
are those securities which are held for the purpose of selling them at a profit.
There were no trading account securities on hand at December 31, 2003 and 2002.

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Loans are carried at the
principal amount outstanding adjusted for the allowance for loan losses, and net
deferred origination fees. Interest income on loans is recognized based on the
principal balance outstanding and the stated rate of the loan.

A loan is considered to be
impaired when it appears probable that the entire amount contractually due will
not be collected. Factors considered in determining impairment include payment
status, collateral values, and the probability of collecting scheduled payments
of principal and interest when due. Generally, impairment is measured on a loan
by loan basis using the fair value of the supporting collateral.

Loans are generally placed
on a nonaccrual status when principal or interest is past due ninety days, or
when specifically determined to be impaired. When a loan is placed on nonaccrual
status, interest accrued but not received is generally reversed against interest
income. If collectability is in doubt, cash receipts on nonaccrual loans are
used to reduce principal rather than recorded as interest income. Past due
status is based on contractual terms.

Loan origination fees and
certain direct origination costs are capitalized and recognized as an adjustment
of the yield on the related loan.

The allowance for loan
losses is maintained at a level believed adequate by management to absorb
probable losses inherent in the loan portfolio and is based on the size and
current risk characteristics of the loan portfolio, an assessment of individual
problem loans, actual and anticipated loss experience, current economic events,
including unemployment levels, and other pertinent factors, including regulatory
guidance and general economic conditions. Determination of the allowance is
inherently subjective as it requires significant estimates, including the
evaluation of collateral supporting impaired loans, estimated losses on pools of
homogeneous loans based on historical loss experience, and consideration of
current economic trends, all of which may be susceptible to significant change.
Loan losses are charged off against the allowance, while recoveries of amounts
previously charged off are credited to the allowance. A provision for loan
losses is charged to operations based on managements periodic evaluation
of the factors previously mentioned, as well as other pertinent factors.

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

The allowance for loan
losses consists of an allocated component and an unallocated component. The
components of the allowance for loan losses represent an estimation done
pursuant to either Financial Accounting Standards Board (FASB) Statement No. 5,
Accounting for Contingencies, or FASB Statement No. 114,
Accounting by Creditors for Impairment of a Loan. The allocated
component of the allowance for loan losses reflects expected losses resulting
from an analysis developed through specific credit allocations for individual or
pools of loans and historical loss experience for each loan category. The
specific allocations are based on a regular review of all loans where the
internal credit rating is at or below a predetermined classification. The
historical loan loss element is determined statistically using loss experience
and the related internal gradings of loans charged off. The analysis is
performed quarterly, and loss factors are updated regularly based on actual
experience. The allocated component of the allowance for loan losses also
includes consideration of the amounts necessary for any concentrations and
changes in portfolio mix and volume.

The unallocated portion of
the allowance reflects managements estimate of probable inherent but
undetected losses within the portfolio due to uncertainties in economic
conditions, changes in collateral values, unfavorable information about a
borrowers financial condition, and other risk factors that have not yet
manifested themselves. In addition, the unallocated allowance includes a
component that explicitly accounts for the inherent imprecision in the loan loss
analysis.

Premises and equipment are
stated at cost, less accumulated depreciation and amortization. Depreciation and
amortization are determined using the straight-line and accelerated methods at
rates calculated to depreciate or amortize the cost of assets over their
estimated useful lives.

Maintenance and repairs of
property and equipment are charged to operations, and major improvements are
capitalized. Upon retirement, sale, or other disposition of property and
equipment, the cost and accumulated depreciation are eliminated from the
accounts, and any gains or losses are included in operations.

The Corporation invests in
bank owned life insurance (BOLI). BOLI involves the purchasing of life insurance
by the Corporation on a chosen number of employees. The Corporation is the owner
of the policies and, accordingly, the cash surrender value of the policies is an
asset, and increases in cash surrender values are reported as income. The
co-beneficiaries of the policies are the Bank and the insured employee.

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Other real estate consists
of properties acquired through foreclosure and is recorded at the lower of cost
or current appraised value less estimated expense to sale. The Bank writes down
other real estate annually in accordance with state banking regulations. Any
write-down from the cost to estimated fair market value required at the time of
foreclosure is charged to the allowance for loan losses. Subsequent gains or
losses, including write-downs, on other real estate are reported in other
operating income or expenses.

Income taxes are provided
for the tax effects of the transactions reported in the financial statements and
consist of taxes currently payable plus deferred taxes related primarily to
differences between the bases of assets and liabilities as measured by income
tax laws and their bases as reported in the financial statements. The deferred
tax assets and liabilities represent the future tax consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled.

The Corporation and its
subsidiaries file consolidated income tax returns. The subsidiaries provide for
income taxes on a separate return basis and remit to the Corporation amounts
determined to be payable.

Basic net income per share
is computed by dividing net income by the weighted average number of common
shares outstanding for each year. Diluted net income per share is computed by
dividing net income by the weighted average number of common shares outstanding
adjusted to include the number of additional common shares that would have been
outstanding if any dilutive potential common shares had been issued. For the
three years ended December 31, 2003, there were no potential dilutive common
shares. All weighted average, actual shares or per share information in the
financial statements have been adjusted retroactively for the effect of stock
dividends.

Presented below is a
summary of the components used to calculate basic net income per share for the
years ended December 31, 2003, 2002, and 2001 (as restated for stock dividends):

`2003            2002              2001
                                                                              ------------      ------------      -----------
                                                                                     (In thousands, except per share data)
        Basic Net Income Per Share
           Weighted average common shares outstanding                                2,361             2,360             2,361
                                                                              ============      ============      ============
           Net income                                                         $      5,517      $      4,821      $      4,611
                                                                              ============      ============      ============
           Basic net income per share                                         $       2.34      $       2.04      $       1.95
                                                                              ============      ============      ============`

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

For purposes of reporting
cash flows, cash and cash equivalents include cash on hand and
noninterest-bearing and readily available interest-bearing deposits due from
other banks.

Advertising costs are
expensed as incurred. Advertising expense for 2003 and 2002 was approximately
$165,000 and $169,000, respectively.

Prior to 2002, goodwill,
representing the excess of the purchase price over the fair value of the net
assets of the acquired entities, was being amortized on a straight-line basis
over the period of expected benefit of 15 years. Effective January 1, 2002, the
Corporation and its subsidiaries adopted the provisions of FASB No. 142,
Goodwill and Other Intangible Assets. Under this statement, goodwill
is no longer amortized over its estimated useful life, but is subject to an
assessment for impairment using a fair value based test at least annually. If
impaired, the asset is written down to its estimated fair value.

In the ordinary course of
business, the Bank enters into off-balance sheet financial instruments
consisting of commitments to extend credit, credit card agreements, commercial
and similar letters of credit, and commitments to purchase securities. Such
financial instruments are recorded in the financial statements when they are
exercised.

Except for amounts included
in deposits, assets of the Trust Department are not included in the accompanying
balance sheets.

FASB Statement No. 131,
Disclosures About Segments of an Enterprise and Related Information,
requires public companies to report (i) certain financial and descriptive
information about their reportable operating segments (as defined) and (ii)
certain enterprise-wide financial information about products and services,
geographic areas, and major customers. Management believes the
Corporations principal activity is community banking and that any other
activities are not considered significant segments.

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Certain amounts reported in
prior years have been reclassified to conform with the 2003 presentation. These
reclassifications did not impact the Corporations consolidated financial
condition or results of operations.

In December,  2002,  the FASB issued  Statement  No. 148,  "Accounting  for
Stock-Based  Compensation  -  Transition  and
Disclosure."  Statement  No.  148  amends  Statement  No.  123,  "Accounting  for  Stock-Based  Compensation,"  to provide
alternative  methods of transition  for a voluntary  change to the fair value based method of accounting  for  stock-based
employee compensation.  In addition,  Statement No. 148 amends the disclosure requirements of Statement No. 123 to require
prominent  disclosures in both annual and interim  financial  statements  about the method of accounting  for  stock-based
employee  compensation  and the effect of the method used on reported  results.  Statement No. 148 is effective for fiscal
years  beginning  after  December  15, 2002.  The interim  disclosure  provisions  are  effective  for  financial  reports
containing  financial  statements  for interim  periods  beginning  after  December  15,  2002.  The  Corporation  and its
subsidiaries  have  no  stock-based  compensation  plans  and,  as a  result,  Statement  No.  148  had no  effect  on the
Corporation's consolidated financial position, results of operations or cash flows.

The Corporation adopted
FASB Interpretation No. 45 (FIN 45), Guarantors
Accounting and Disclosure Requirements for Guarantees, including Indirect
Guarantees of Indebtedness of Others on January 1, 2003. FIN 45 requires a
guarantor entity, at the inception of a guarantee covered by the measurement
provisions of the interpretation, to record a liability for the fair value of
the obligation undertaken in issuing the guarantee. The Corporation has
financial and performance letters of credit. Financial letters of credit require
the Corporation to make payment if the customers financial condition
deteriorates, as defined in the agreements. FIN 45 applies prospectively to
guarantees the Corporation issues or modifies subsequent to December 31, 2002.
Given the current volume and types of guarantees issued, the amount of the
liability required to be reported at December 31, 2003, was insignificant.

In January, 2003, the FASB
issued Interpretation No. 46 (FIN 46), Consolidation of
Variable Interest Entities. FIN 46 requires a variable interest entity to
be consolidated by a company if that company is subject to a majority of the
risk of loss from the variable interest entitys activities or entitled to
receive a majority of the entitys residual returns, or both. FIN 46 also
requires disclosures about variable interest entities that a company is not
required to consolidate, but in which it has a significant variable interest.
The consolidation requirements of FIN 46 apply immediately to variable interest
entities created after January 31, 2003, and at the end of the first interim or
annual period ending after December 15, 2003, for interests in variable interest
entities created before February 1, 2003. Because the Corporation has no
variable interest entities, the adoption of FIN 46 had no material effect on the
consolidated financial statements.

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

In April, 2003, the FASB
issued Statement No. 149, Amendment of Statement 133 on Derivative
Instruments and Hedging Activities to amend and clarify financial
accounting and reporting for derivative instruments, including certain
derivative instruments embedded in other contracts and for hedging activities
under Statement No. 133, Accounting for Derivative Instruments and Hedging
Activities. In addition, Statement No. 149 requires that contracts with
comparable characteristics be accounted for similarly. Statement No. 149 is
effective for contracts entered into or modified after June 30, 2003 (with
certain exceptions) and for hedging relationships designated after June 30,
2003. Because the Corporation does not have any derivative instruments, the
adoption of Statement No. 149 had no impact on the Corporations
consolidated financial statements.

In May, 2003, the FASB
issued Statement No. 150, Accounting for Certain Financial Instruments
with Characteristics of both Liabilities and Equity, which affects the
accounting for certain freestanding financial instruments depending on the type
of financial instrument. Under Statement No. 150, certain financial instruments
with characteristics of both liabilities and equity must be classified as
liabilities. The adoption of Statement No. 150 had no material effect on
the Corporations consolidated financial statements.

The Bank is required to
maintain reserve funds in cash or on deposit with the Federal Reserve Bank. The
required reserve at December 31, 2003 and 2002, was $3,044,000 and $2,685,000,
respectively.

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

A summary of amortized cost
and estimated fair value of securities available-for-sale at December 31,
2003 and 2002, follows.

`Gross            Gross
                                                           Amortized       Unrealized        Unrealized       Estimated
                                                              Cost              Gains           Losses          Fair Value
                                                          -------------    -------------     -------------    -------------
       December 31, 2003:                                                          (In thousands)
          Securities available-for-sale:
              U. S. Treasury                              $         700    $           2     $        -       $         702
              U. S. Government agencies                          28,342              218              -              28,560
              Mortgage-backed securities                          9,334              301                24            9,611
              State and local political
                 subdivisions                                    35,895            1,561                 9           37,447
              Equity securities                                     991             -                 -                 991
                                                          -------------    -------------     -------------    -------------

                                                          $      75,262    $       2,082     $          33    $      77,311
                                                          =============    =============     =============    =============
          Securities held-to-maturity:
              State and local political
                  subdivisions                            $       2,053    $          14     $          14    $       2,053
                                                          =============    =============     =============    =============


       December 31, 2002:
          Securities available-for-sale:
              U. S. Treasury                              $         701    $          12     $        -       $         713
              U. S. Government agencies                          14,603              321              -              14,924
              Mortgage-backed securities                         16,833              427              -              17,260
              State and local political
                 subdivisions                                    40,148            1,839                 5           41,982
              Equity securities                                     738             -                 -                 738
                                                          -------------    -------------     -------------    -------------

                                                          $      73,023    $       2,599     $           5    $      75,617
                                                          =============    =============     =============    =============`

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

The scheduled maturities of
securities at December 31, 2003, are as follows:

`Available-For-Sale                 Held-to-Maturity
                                                          ------------------------------     ------------------------------
                                                             Amortized     Estimated           Amortized      Estimated
                                                               Cost          Fair Value          Cost           Fair Value
                                                          -------------    -------------     ------------     -------------
                                                                                  (In thousands)

       Due in one year or less                            $       6,627    $       6,718     $       -        $        -
       Due after one year through five years                     17,537           18,153              206               196
       Due after five years through ten years                     7,874            8,169              207               203
       Due after 10 years                                        27,857           28,627            1,640             1,654
       Mortgage-backed securities and equity
          securities                                             15,367           15,644             -                 -
                                                          -------------    -------------     ------------     -------------

                                                          $      75,262    $      77,311     $      2,053     $       2,053
                                                          =============    =============     ============     =============`

Equity securities consist
of investments in Federal Home Loan Bank (FHLB) and Federal Agricultural
Mortgage Corporation. The transferability of the FHLB and Federal Agricultural
Mortgage Corporation stock is restricted.

Investment securities with
a carrying value of $70,578,000 and $66,754,000 at December 31, 2003 and
2002, respectively, were pledged to secure public and trust deposits and for
other purposes as required or permitted by law.

Gross gains of $1,000 in
2003 and $ -0- in 2002 and 2001, and gross losses of $ -0- in both 2003 and
2002, and $3,000 in 2001 were realized on securities available-for-sale.

The details concerning
securities classified as available for sale with unrealized losses as of
December 31, 2003, were as follows:

`Less Than         Losses 12 Months
                                          Losses     12 Months             or Greater                       Total
                                     ---------------------------  -----------------------------   -------------------------
                                                                          (In thousands)
                                                         Gross                        Gross                         Gross
                                         Fair         Unrealized       Fair        Unrealized         Fair       Unrealized
                                         Value          Losses         Value         Losses           Value        Losses
                                     ------------  -------------  --------------  --------------  -----------  ------------
     Mortgage-backed
       securities                    $      9,779  $          24  $         -     $         -     $     9,779  $         24
     State and local political
       subdivisions                         2,398              9            -               -           2,398             9
                                     ------------  -------------  --------------  --------------  -----------  ------------

                                     $     12,177  $          33  $         -     $         -     $    12,177  $         33
                                     ============  =============  ==============  ==============  ===========  ============`

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

The details concerning
securities classified as held to maturity with unrealized losses as of
December 31, 2003, were as follows:

`Losses Less Than            Losses 12 Months
                                               12 Months                  or Greater                       Total
                                     ---------------------------  -----------------------------   -------------------------
                                                                          (In thousands)
                                                         Gross                        Gross                         Gross
                                         Fair         Unrealized       Fair        Unrealized         Fair       Unrealized
                                         Value          Losses         Value         Losses           Value        Losses
                                     ------------  -------------  --------------  --------------  -----------  ------------

     State and local political
       subdivisions                  $        399  $          14  $         -     $         -     $       399  $         14
                                     ============  =============  ==============  ==============  ===========  ============`

As of December 31, 2003,
approximately 5.9% of the number of securities in the portfolio reflected an
unrealized loss. Management is of the opinion the Corporation has the ability
and intent to hold these securities until such time as the value recovers or the
securities mature. Management also believes the deterioration in value is
attributable to changes in market interest rates and not to the credit quality
of the issuer.

Major classifications of
loans were as follows:

`December 31,
                                                                                                -----------------------------
                                                                                                    2003             2002
                                                                                                ------------    -------------
                                                                                                       (In thousands)

      Commercial, financial and agricultural                                                    $     32,878    $      38,229
      Real estate - construction and development                                                      37,116           27,165
      Real estate - mortgage                                                                         103,348           96,737
      Installment loans to individuals                                                                28,529           22,602
      Other                                                                                            2,553            2,782
                                                                                                ------------    -------------
                                                                                                     204,424          187,515
      Less allowance for loan losses                                                                  (3,665)          (3,455)
                                                                                                ------------    -------------
                                                                                                $    200,759    $     184,060
                                                                                                ============    =============`

Included in the above are
customer demand deposits in overdraft status of approximately $323,000 at
December 31, 2003 and $398,000 at December 31, 2002.

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Transactions in the
allowance for loan losses were as follows:

`Years Ended December 31,
                                                                                      ---------------------------------------
                                                                                           2003          2002         2001
                                                                                      ----------    ----------     ----------
                                                                                                    (In thousands)

       Balance at beginning of year                                                   $    3,455    $    3,039     $    2,920
       Charge-offs during year                                                              (710)         (738)          (866)
       Recoveries on loans previously
          charged off                                                                        374           482            284
       Provision charged to operating expense                                                546           672            701
                                                                                      ----------    ----------     ----------

       Balance at end of year                                                         $    3,665    $    3,455     $    3,039
                                                                                      ==========    ==========     ==========`

At December 31, 2003 and
2002, the recorded investment in loans considered to be impaired totaled
approximately $383,000 and $958,000, respectively. The allowance for loan losses
related to these loans approximated $57,000 and $161,000 at December 31, 2003
and 2002, respectively. The average recorded investment in impaired loans during
the years ended December 31, 2003 and 2002, was approximately $451,000 and
$1,336,000, respectively. For the years ended December 31, 2003, 2002, and 2001,
the amount of income recognized on impaired loans was immaterial. At
December 31, 2003 and 2002, nonaccrual loans amounted to approximately
$78,000 and $590,000, respectively, and loans past due ninety days or more and
still accruing interest amounted to approximately $630,000 and $307,000,
respectively.

Premises and equipment are
stated at cost, less accumulated depreciation and amortization as follows:

`December 31,
                                                                        Estimated Useful        ----------------------------
                                                                          Life in Years             2003            2002
                                                                       -----------------        ------------   -------------
                                                                                                      (In thousands)

       Land                                                                     -                 $    2,477       $   2,456
       Buildings and improvements                                          10   - 40                  10,741          10,603
       Furniture and equipment                                              3   - 10                   4,926           4,650
                                                                                               -------------   -------------
                                                                                                      18,144          17,709
       Less accumulated depreciation and amortization                                                 (5,340)         (4,714)
                                                                                               -------------   -------------

                                                                                               $      12,804   $      12,995
                                                                                               =============   =============`

The amount charged to
operating expense for depreciation was $626,000 for 2003, $679,000 for 2002, and
$632,000 for 2001.

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

The aggregate amount of
time deposits in denominations of $100,000 or more for 2003 and 2002 was
$44,703,000 and $52,362,000, respectively.

Projected maturities of
time deposits included in interest-bearing deposits at December 31, 2003, are as
follows (in thousands):

`Year                                       Amount
                                       ----                                    -----------

                                       2004                                    $    74,492
                                       2005                                         13,226
                                       2006                                         11,198
                                       2007                                          6,917
                                       2008                                            676
                                    Thereafter                                       4,405
                                                                               -----------

                                                                               $   110,914
                                                                               ===========`

Borrowed funds consisted of
the following:

`December 31,
                                                                                                    -----------------------
                                                                                                       2003          2002
                                                                                                    ---------      --------
                                                                                                         (In thousands)

       FHLB advances                                                                                $   8,237      $  9,613
       Treasury tax and loan note                                                                         930           316
                                                                                                    ---------      --------

                                                                                                    $   9,167      $  9,929
                                                                                                    =========      ========`

The Bank has outstanding
advances from the Federal Home Loan Bank (FHLB) under a blanket agreement for
advances and a security agreement (Agreements). The Agreements entitle the Bank
to borrow funds from FHLB to fund mortgage loan programs and to satisfy certain
other funding needs. Advances from the FHLB have maturity dates ranging from
February, 2004, through December, 2018. Interest is payable monthly at rates
ranging from 3.483% to 6.575%. The advances are collateralized by FHLB capital
stock, amounts on deposit with the FHLB, and a blanket lien on first mortgage,
small business, and agricultural loans equal to the advances outstanding. FHLB
advances available and unused at December 31, 2003, totaled $72 million.

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

The treasury tax and loan note generally matures within one to sixty days
from the transaction  date.  Interest is paid at an adjustable rate as set by the U. S. Government.

Annual principal repayment
requirements on FHLB borrowings at December 31, 2003, are as follows:

`Year                               Amount
                                        ------------                        ------------
                                                                            (In thousands)

                                             2004                           $      3,784
                                             2005                                    298
                                             2006                                    313
                                             2007                                    329
                                             2008                                    346
                                          Thereafter                               3,167`

The Bank has a defined
contribution plan which incorporates the provisions of a deferred compensation
plan [401(k)] covering all employees who perform 1,000 hours of service
annually, have one year of service and are age twenty-one or older. The
Banks contribution is 2% of salaries, and employees may contribute up to
15%of their salary which is matched by the Bank up to an additional 3%.
Additional Bank contributions are subject to Board discretion. The Banks
contribution was approximately $213,000 for 2003, $196,000 for 2002, and
$164,000 for 2001.

The Bank also has an
employee stock ownership plan (ESOP) covering the same group of employees as the
401(k) plan, which is funded at the discretion of the Board. The ESOP invests
primarily in the stock of Corporation. Dividends on ESOP shares are recorded as
a reduction of retained earnings and the shares are considered outstanding for
earnings per share computation. Bank contributions were approximately $196,000
for 2003, $178,000 for 2002 and 2001. The ESOP held 183,104 and 174,385 shares
of Corporation common stock, all of which were allocated shares, at December 31,
2003 and 2002, respectively.

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

In the calculation of
comprehensive income, certain reclassification adjustments are made to avoid
double counting amounts that are displayed as part of other comprehensive
income. The disclosures of the reclassification amounts are as follows:

`Years Ended December 31,
                                                                                     ---------------------------------------
                                                                                        2003           2002          2001
                                                                                     ----------    ----------     ----------
                                                                                                  (In thousands)
          Net change in unrealized (losses) gains on
              available-for-sale securities                                          $     (546)   $    1,029     $   1,205
          Reclassification adjustment for net losses
              (gains) realized in income                                                   -             -              (37)
                                                                                     ----------    ----------     ----------
          Net unrealized (gains) losses                                                    (546)        1,029         1,168
          Tax effect                                                                        204          (383)         (436)
                                                                                     ----------    ----------     ----------

          Net change in unrealized gains (losses) on
              securities available-for-sale, net of tax                              $     (342)   $      646     $     732
                                                                                     ==========    ==========     ==========`

The provision for income
taxes including the tax effects of securities transactions is as follows:

`Years Ended December 31,
                                                                                      ---------------------------------------
                                                                                          2003          2002         2001
                                                                                      ----------    ----------     ----------
                                                                                                   (In thousands)

       Current:
          Federal                                                                     $    1,746    $    1,538     $    1,276
          State                                                                              256           261            598
       Deferred tax expense (benefit)                                                         37          (133)           (60)
                                                                                      ----------    ----------     ----------

                                                                                      $    2,039    $    1,666     $    1,814
                                                                                      ==========    ==========     ==========`

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

The difference between the
total expected tax expense at the federal tax rate and the reported income tax
expense is as follows:

`Years Ended December 31,
                                                                                     ----------------------------------------
                                                                                          2003          2002          2001
                                                                                     -----------    ----------     ----------
                                                                                                   (In thousands)

       Tax on income before income taxes                                             $     2,569    $    2,203     $    2,184
       Increase (decrease) resulting from:
          Tax-exempt income                                                                 (623)         (708)          (710)
          Disallowed interest expense                                                         29            46             83
          State income taxes, net of federal benefit                                         169           172            395
          Other, net                                                                        (105)          (47)          (138)
                                                                                     -----------    ----------     ----------

                                                                                     $     2,039    $    1,666     $    1,814
                                                                                     ===========    ==========     ==========

    The components of the net deferred tax included in the consolidated balance sheets are as follows:

                                                                                                            December 31,
                                                                                                    -------------------------
                                                                                                        2003          2002
                                                                                                    ----------     ----------
                                                                                                         (In thousands)
       Deferred tax assets:
          Allowance for loan losses                                                                 $    1,152     $    1,074
                                                                                                    ----------     ----------

       Deferred tax liabilities:
          Premises and equipment                                                                          (179)          (183)
          Unrealized gain on securities
              available-for-sale                                                                          (764)          (968)
          Other                                                                                           (224)          (104)
                                                                                                    ----------     ----------
                                                                                                        (1,167)        (1,255)
                                                                                                    ----------     ----------

       Net deferred tax liability                                                                   $      (15)    $     (181)
                                                                                                    ==========     ==========`

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

The Corporation and its subsidiaries  adopted FASB Statements No. 142,
"Goodwill and Other Intangible Assets" and No. 147, "Acquisitions of Certain  Financial  Institutions"  effective  January 1,
2002. Had the statements been adopted effective January 1, 2001, the consolidated net income and the basic and diluted net income
per share would have been as follows:

`Years Ended December 31,
                                                                           --------------------------------------------------
                                                                                 2003             2002              2001
                                                                           --------------    --------------   ---------------
                                                                                (In thousands, except per share amounts)

       Reported net income                                                 $        5,517    $        4,812   $         4,611
       Add back goodwill amortization                                                -                 -                  364
                                                                           --------------    --------------   ---------------

       Adjusted net income                                                 $        5,517    $        4,812   $         4,975
                                                                           ==============    ==============   ===============

       Basic and diluted net income per share:
          Reported net income                                              $         2.34    $         2.04   $          1.95
          Add back goodwill amortization                                             -                 -                  .15
                                                                           --------------    --------------   ---------------

                                                                           $         2.34    $         2.04   $          2.10
                                                                           ==============    ==============   ===============`

The consolidated financial
statements do not reflect various commitments and contingent liabilities which
arise in the normal course of the Banks business and which involve
elements of credit risk, interest rate risk and liquidity risk. These
commitments and contingent liabilities are commitments to extend credit,
commercial letters of credit, credit card agreements, and standby letters of
credit. A summary of the Banks approximate commitments and contingent
liabilities arising from the normal course of business at December 31 is as
follows:

`Contractual Amount
                                                                                                -----------------------------
                                                                                                     2003            2002
                                                                                                ------------    -------------
                                                                                                       (In thousands)

        Commitments to extend credit                                                            $     29,651     $    20,775
        Credit card arrangements                                                                       2,244           2,188
        Letters of credit                                                                             11,286          14,250`

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Commitments to extend
credit, credit card agreements, commercial letters of credit, and standby
letters of credit include some exposure to credit loss in the event of
nonperformance of the customer. The Banks credit policies and procedures
for such commitments and financial guarantees are the same as those used for
lending activities. Because these instruments have fixed maturity dates, and
because many of them expire without being drawn upon, they do not generally
present any significant liquidity risk. No significant losses on commitments
were incurred during the three years ended December 31, 2003, nor are any
significant losses as a result of these transactions anticipated.

The Bank leases property
for branch offices under a noncancellable lease agreement that expires in 2007.
The lease is for a five-year period with an option to renew. The total minimum
rental commitment at December 31, 2003, under the leases is approximately
$38,400 which is due as follows:

`Year                    Amount
                                                -----                 ------------

                                                2004                  $      9,600
                                                2005                         9,600
                                                2006                         9,600
                                                2007                         9,600
                                                2008                          -
                                                                      ------------
                                                                      $     38,400
                                                                      ============`

The total rental expense
was $9,600, $16,257, and $42,023 for 2003, 2002, and 2001, respectively.

The Bank is a defendant in
various pending and threatened legal actions arising in the normal course of
business. In the opinion of management, based upon the advice of legal counsel,
the ultimate disposition of these matters will not have a material effect on the
consolidated financial statements.

In the normal course of
business, loans are made to directors and executive officers and to companies in
which they have a significant ownership interest. In the opinion of management,
these loans are made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions with
other parties, are consistent with sound banking practices and are within
applicable regulatory and lending limitations. Such loans amounted to
approximately $1,445,000 and $918,000 at December 31, 2003 and 2002,
respectively.

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Banking regulations require
the Bank to maintain certain capital levels and limit the dividends paid by the
Bank to the holding company. Dividends paid by the Bank to the Corporation are
the primary source of funds for dividends by the Corporation to its
shareholders.

The Corporation and its
subsidiary bank are subject to various regulatory capital requirements
administered by the federal and state 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 Corporations consolidated financial statements.
Under capital adequacy guidelines and the regulatory framework for prompt
corrective action, the Corporation and its subsidiary 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. Capital amounts and classification are also subject to qualitative
judgments by the regulators about components, risk weightings, and other
factors.

Quantitative measures
established by regulation to ensure capital adequacy require the Corporation and
its subsidiary bank to maintain minimum amounts and ratios (set forth in the
following table) of total and Tier 1 capital (as defined in the regulations) to
risk-weighted assets (as defined), and of Tier 1 capital (as defined) to
adjusted average total assets (leverage). Managements contention is that,
as of December 31, 2003, the Corporation and its subsidiary bank exceed all
capital adequacy requirements.

At December 31, 2003, the
Bank was categorized by regulators as well-capitalized under the regulatory
framework for prompt corrective action. A financial institution is considered to
be well-capitalized if it has a total risk-based capital ratio of 10% or more, a
Tier 1 risk-based capital ratio of 6% or more, and a Tier 1 leverage capital
ratio of 5% or more. There are no conditions or anticipated events that, in the
opinion of management, would change the categorization.

The actual capital amounts
and ratios at December 31, 2003 and 2002, are presented in the following table.
No amount was deducted from capital for interest-rate risk exposure.

`Security Capital
                                                                                    Corporation
                                                                                  (Consolidated)                  Bank
                                                                             ----------------------     ----------------------
                                                                                Amount       Ratio        Amount        Ratio
                                                                             -----------  ---------    ------------   --------
                                                                                              ($ In Thousands)
      December 31, 2003:
        Total risk-based                                                     $    38,630      16.5%     $    36,638      15.6%
        Tier 1 risk-based                                                         35,690      15.2%          33,700      14.4%
        Tier 1 leverage                                                           35,690      10.8%          33,700      10.2%

      December 31, 2002:
        Total risk-based                                                     $    35,234      16.1%     $    33,739      15.5%
Tier 1 risk-based                                                                 32,496      14.9%          31,001      14.2%
Tier 1 leverage                                                                   32,496      10.5%          31,001      10.0%`

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

The minimum amounts of
capital and ratios as established by banking regulators at December 31, 2003 and
2002, were as follows:

`Security Capital
                                                                                    Corporation
                                                                                  (Consolidated)                  Bank
                                                                             ----------------------     ----------------------
                                                                                Amount       Ratio        Amount        Ratio
                                                                             -----------  ---------    ------------   --------
                                                                                              ($ In Thousands)
      December 31, 2003:
        Total risk-based                                                     $    18,756       8.0%     $    18,743       8.0%
        Tier 1 risk-based                                                          9,378       4.0%           9,372       4.0%
Tier 1 leverage                                                                    9,923       3.0%           9,919       3.0%

      December 31, 2002:
        Total risk-based                                                     $    17,469       8.0%     $    17,463       8.0%
Tier 1 risk-based                                                                  8,734       4.0%           8,731       4.0%
Tier 1 leverage                                                                    9,288       3.0%           9,286       3.0%`

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

The following methods and
assumptions were used to estimate the fair value of each class of financial
instruments for which it is practicable to estimate that value:

Cash and Cash
Equivalents  For such short-term instruments, the carrying
amount is a reasonable estimate of fair value.

Securities For securities held as investments, fair value equals
market price, if available. If a quoted market price is not available, fair
value is estimated using quoted market prices for similar securities.

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Loans
 The fair value of loans is estimated by discounting the future cash flows
using the current rates at which similar loans would be made to borrowers with
similar credit ratings and for the same remaining maturities.

Deposits
 The fair values of demand deposits are, as required by Statement No. 107,
equal to the carrying value of such deposits. Demand deposits include
noninterest-bearing demand deposits, savings accounts, NOW accounts, and money
market demand accounts. The fair value of variable rate term deposits, those
repricing within six months or less, approximates the carrying value of these
deposits. Discounted cash flows have been used to value fixed rate term deposits
and variable rate term deposits repricing after six months. The discount rate
used is based on interest rates currently being offered on comparable deposits
as to amount and term.

FHLB and Other
Borrowings  The fair value of the fixed rate borrowings are
estimated using discounted cash flows, based on current incremental borrowing
rates for similar types of borrowing arrangements. The carrying amount of any
variable rate borrowings approximates their fair values.

Off-Balance Sheet
Instruments Fair values of off-balance sheet financial
instruments are based on fees charged to enter into similar agreements. However,
commitments to extend credit do not represent a significant value until such
commitments are funded or closed. Management has determined that these
instruments do not have a distinguishable fair value and no fair value has been
assigned.

The estimated fair values
of the financial instruments, none of which are held for trading purposes, were
as follows:

`December 31, 2003                      December 31, 2002
                                                       --------------------------------        -------------------------------
                                                          Carrying           Estimated             Carrying         Estimated
                                                           Amount           Fair Value              Amount          Fair Value
                                                       --------------     ------------        --------------     --------------
                                                                (In thousands)                         (In thousands)
       Financial assets:
          Cash and cash equivalents                    $       15,082     $      15,082        $     13,705     $      13,705
          Federal funds sold                                   20,380            20,380              15,760            15,760
          Certificates of deposit with
              other banks                                         492               492               1,851             1,851
          Securities available-for-sale                        77,311            77,311              75,617            75,617
          Securities held-to-maturity                           2,053             2,053                -                 -
          Loans                                               200,759           204,280             184,060           187,426
       Financial liabilities:
          Noninterest-bearing deposits                         39,820            39,820              32,278            32,278
          Interest-bearing deposits                           248,622           248,362             233,319           233,319
          FHLB and other borrowings                             9,167             9,825               9,929             9,929`

---

# SECURITY
CAPITAL CORPORATION

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

Most of the loans,
commitments, commercial letters of credit and standby letters of credit have
been granted to customers in the Banks market area. Generally such
customers are also depositors. Investments in state and municipal securities
also include governmental entities within the Banks market area. The
concentrations of credit by type of loan are set forth in Note D. The
distribution of commitments to extend credit approximates the distribution of
loans outstanding. Letters of credit were granted primarily to commercial
borrowers.

Balance sheets as of
December 31, 2003 and 2002, and statements of income and cash flows for the
years ended December 31, 2003, 2002, and 2001, of Security Capital Corporation
(parent company only) are presented below:

`BALANCE SHEETS
                                                                                                         December 31,
                                                                                                 ----------------------------
                                                                                                      2003           2002
                                                                                                 ------------    ------------
                                                                                                        (In thousands)
     Assets
     Cash and cash equivalents                                                                   $      1,394    $        654
     Investment in subsidiaries                                                                        39,406          36,922
     Other assets                                                                                         105             328
                                                                                                 ------------    ------------

                                                                                                 $     40,905    $     37,904
                                                                                                 ============    ============
     Liabilities and Shareholders' Equity
     Other liabilities                                                                           $         57    $         47
     Shareholders' equity                                                                              40,848          37,857
                                                                                                 ------------    ------------

                                                                                                 $     40,905    $     37,904
                                                                                                 ============    ============`

---

`SECURITY CAPITAL CORPORATION

                                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE Q - CONDENSED PARENT COMPANY STATEMENTS  (Continued)


                                                     STATEMENTS OF INCOME

                                                                                            Years Ended December 31,
                                                                                 --------------------------------------------
                                                                                      2003           2002            2001
                                                                                 ------------    ------------    ------------
                                                                                                (In thousands)
     Income
     Dividends from subsidiary                                                   $      2,530    $      2,145    $      2,090
     Gain on sale of other asset                                                          406            -              -
     Other                                                                                 10              12              18
                                                                                 ------------    ------------    ------------
                                                                                        2,946           2,157           2,108

     Expense                                                                              177             125              68
                                                                                 ------------    ------------    ------------
     Income before income taxes and equity in
        undistributed earnings of subsidiaries                                          2,769           2,032           2,040
     Income tax (expense) benefit                                                         (78)             45              21
                                                                                 ------------    ------------   -------------
     Income before equity in undistributed earnings
        of subsidiaries                                                                 2,691           2,077           2,061
     Equity in undistributed earnings of subsidiaries
        in excess of dividends                                                          2,826           2,735           2,550
                                                                                 ------------    ------------   -------------

     Net income                                                                  $      5,517    $      4,812   $       4,611
                                                                                 ============    ============   =============`

---

`SECURITY CAPITAL CORPORATION

                                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE Q - CONDENSED PARENT COMPANY STATEMENTS  (Continued)


                                                   STATEMENTS OF CASH FLOWS

                                                                                            Years Ended December 31,
                                                                                 --------------------------------------------
                                                                                      2003           2002            2001
                                                                                 ------------    ------------    ------------
                                                                                                (In thousands)
     Cash Flows From Operating Activities
     Net income                                                                  $      5,517    $      4,812    $      4,611
     Equity in subsidiaries' earnings                                                  (2,826)         (2,735)         (2,550)
     Gain on sale of other asset                                                         (406)           -               -
     Other, net                                                                           234             (28)             (6)
                                                                                 ------------    ------------    ------------

     Net cash provided by operating activities                                          2,519           2,049           2,055
                                                                                 ------------    ------------    ------------

     Cash Flows From Investing Activities
     Proceeds from sale of other asset                                                    406            -               -
                                                                                 ------------    ------------    ------------

     Cash Flows From Financing Activities
     Dividends paid on common stock                                                    (2,243)         (2,023)         (1,819)
     Repayment of debt                                                                   -                114            -
     Other, net                                                                            58              (7)            (15)
                                                                                 ------------    ------------    ------------

     Net cash used in financing activities                                             (2,185)         (1,916)         (1,834)
                                                                                 ------------    ------------    ------------

     Net increase in cash and cash equivalents                                            740             133             221
     Cash and cash equivalents at beginning of year                                       654             521             300
                                                                                -------------   -------------   -------------

     Cash and cash equivalents at end of year                                   $       1,394   $         654   $         521
                                                                                =============   =============   =============`

---

`SECURITY CAPITAL CORPORATION

                                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE R - SUMMARY OF QUARTERLY RESULTS OF OPERATIONS AND PER SHARE
         AMOUNTS (UNAUDITED)

                                                                                     Three Months Ended
                                                                -------------------------------------------------------------
                                                                   Mar. 31          June 30        Sept. 30        Dec. 31
                                                                ------------     -----------      ----------      -----------
                                                                            (In thousands, except per share data)
    2003
    Total interest income                                       $      4,171     $     4,350      $    4,331      $     4,157
    Total interest expense                                             1,067             998             958              932
                                                                ------------     -----------      ----------      -----------
        Net interest income                                            3,104           3,352           3,373            3,225
    Provision for loan losses                                            161             162             161               62
                                                                ------------     -----------      ----------      -----------
        Net interest income after provision for
           loan losses                                                 2,943           3,190           3,212            3,163
    Total noninterest income, excluding
        securities gains (losses)                                      1,309           1,402           1,257            1,697
    Securities gains (losses)                                              1            -               -                -
    Total noninterest expenses                                         2,523           2,725           2,687            2,683
    Income taxes                                                         360             380             522              777
                                                                ------------     -----------      ----------      -----------

    Net income                                                  $      1,370     $     1,487      $    1,260      $    1,400
                                                                ============     ===========      ==========      ===========

    Per share:  (1)
        Net income                                              $        .58      $      .63     $       .53      $       .60
        Net income, diluted                                              .58             .63             .53              .60
        Cash dividends declared                                            -               -               -              .95


(1) Restated for stock dividends.`

---

`SECURITY CAPITAL CORPORATION

                                          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE R - SUMMARY OF QUARTERLY RESULTS OF OPERATIONS AND PER SHARE
         AMOUNTS (UNAUDITED)  (Continued)

                                                                                     Three Months Ended
                                                                -------------------------------------------------------------
                                                                   Mar. 31          June 30        Sept. 30         Dec. 31
                                                                ------------     -----------      ----------      -----------
                                                                            (In thousands, except per share data)
2002
Total interest income                                           $      4,168     $     4,209      $    4,351      $     4,119
Total interest expense                                                 1,238           1,147           1,189            1,186
                                                                ------------     -----------      ----------      -----------
    Net interest income                                                2,930           3,062           3,162            2,933
Provision for loan losses                                                172             166             167              167
                                                                ------------     -----------      ----------      -----------
    Net interest income after provision for
        loan losses                                                    2,758           2,896           2,995            2,766
Total noninterest income, excluding
    securities gains (losses)                                          1,115           1,436           1,298            1,306
Securities gains (losses)                                               -               -               -                -
Total noninterest expenses                                             2,470           2,496           2,576            2,550
Income taxes                                                             387             476             444              359
                                                                ------------     -----------      ----------      -----------

Net income                                                      $      1,016     $     1,360      $    1,273      $     1,163
                                                                ============     ===========      ==========      ===========

    Per share:  (1)
        Net income                                              $        .43      $      .58     $       .54      $       .49
        Net income, diluted                                              .43             .58             .54              .49
        Cash dividends declared                                            -               -               -              .86


(1) Restated for stock dividends.`

---

Not applicable.

For prior years audited by
W. H. Polk and Company, their reports on the audited financial statements did
not contain any adverse opinions or disclaimers of opinion and were not
qualified or modified as to uncertainty, audit scope or accounting principles.
Moreover, there were no disagreements on material adjustments, accounting
principles, financial disclosure, practices, or auditing scope of procedures
between W. H. Polk and Company and Security Capital Corporation for any given
year.

---

As defined by the
Securities and Exchange Commission in Exchange Act Rules 13a-15(e), a
companys disclosure controls and procedures means controls and
other procedures of an issuer that are designed to ensure that information
required to be disclosed by the issuer in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the Commissions rules and forms.

As of December 31, 2003
(the Evaluation Date), the Companys Chief Executive Officer
and Chief Financial Officer have evaluated the effectiveness of the
Companys disclosure controls and procedures as defined in the Exchange Act
Rules. Based on their evaluation, the Companys Chief Executive Officer and
Chief Financial Officer have concluded that the Companys disclosure
controls and procedures are sufficiently effective to ensure that material
information relating to the Company and required to be disclosed by the Company
in the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
Commissions rules and forms.

Subsequent to the
Evaluation Date, there have been no significant changes in the Companys
internal controls or in other factors that could significantly affect these
controls.

Included under the heading
Information Concerning Nominees and Directors in the Companys
Proxy Statement dated April 5, 2004 and incorporated by reference herein.

The Companys Board of
Directors has adopted a Code of Ethics that applies to the Companys
principal executive officer, principal financial officer, principal accounting
officer, or persons performing similar functions. A copy of this Code of Ethics
can be found at the Companys internet website at www.firstsecuritybk.com.
The Company intends to disclose any amendments to its Code of Ethics, and any
waiver from a provision of the Code of Ethics granted to the Companys
principal executive officer, principal financial officer, principal accounting
officer, or persons performing similar functions, on the Companys internet
website within five business days following such amendment or waiver. The
information contained on or connected to the Companys internet website is
not incorporated by reference into this Form 10-K and should not be considered
part of this or any other report that we file with or furnish to the SEC.

Included under the heading
Executive Compensation in the Companys Proxy Statement dated
April 5, 2004 and incorporated by reference herein.

---

Included under the heading
Security Ownership of Certain Beneficial Owners and Management in
the Companys Proxy Statement dated April 5, 2004 and incorporated by
reference herein.

Included under the heading
Certain Relationship and Related Transactions in the Companys
Proxy Statement dated April 5, 2004 and incorporated by reference herein.

Included under the heading
Independent Public Accountants and Fees in the Companys Proxy
Statement dated April 5, 2004 and incorporated by reference herein.

The following financial
statements included under the heading Financial Statements and
Supplementary Data are included in this report:

(a)      Independent Auditors' Report

None.

Pursuant to the
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

`Security Capital Corporation



Date: March 30, 2004               By   /s/ Frank West
                                     -----------------------------------------
                                        Frank West, Chief Executive Officer

Date: March 30, 2004               By   /s/ Connie Hawkins
                                     -----------------------------------------
                                        Connie Hawkins, Chief Financial Officer`

---

`SIGNATURES

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



DATE:    March 30, 2004
                               /s/ Larry Pratt             , Director


DATE:    March 30, 2004
                               /s/ Frank West              , Director


DATE:    March 30, 2004
                               /s/ John Mothershed         , Director


DATE:    March 30, 2004
                               /s/ Joe Brown               , Director


DATE:    March 30, 2004
                               /s/ Ben Smith               , Director


DATE:    March 30, 2004
                               /s/ G. E. McKittrick        , Director


DATE:    March 30, 2004
                               /s/ Will Hays               , Director


DATE:    March 30, 2004
                               /s/ Steve Ballard           , Director


DATE:    March 30, 2004
                               /s/ Tony Jones              , Director`

---

`EXHIBIT INDEX

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

         Financial Statements and Schedules

        The following Consolidated Financial Statements of Security Capital Corporation are included in Item 8 of
        this report:

        Consolidated Statements of Income--Years ended December 31, 2003, 2002, and 2001

        Consolidated Balance Sheets--December 31, 2003 and 2002

        Consolidated Statements of Shareholders' Equity--Years ended December 31, 2003, 2002, and 2001

        Consolidated Statements of Cash Flows--Years ended December 31, 2003, 2002, and 2001

        Notes to Consolidated Financial Statements

All other schedules to the Consolidated Financial Statements stipulated by Article 9 of Regulation S-X and all
other schedules to the financial statements of the registrant required by Article 5 of Regulation S-X are not
required under the related instructions or are inapplicable and, therefore, have been omitted.

         31.1    Certification of Annual Report on Form 10-K pursuant to Rule 13a-14(a) by Chief Executive
                 Officer   and President

         31.2    Certification of Annual Report on Form 10-K pursuant to Rule 13a-14(a) by Chief
                  Financial Officer, Cashier and Executive Vice-President.

         32.0    Certification of Annual Report on Form 10-K pursuant to 18 U. S. C. Section 1350 and Rule
                 13a-14(b)`

---

# INDEPENDENT
AUDITORS REPORT

We have audited the
accompanying consolidated balance sheets of Security Capital Corporation and
subsidiaries as of December 31, 2003 and 2002, and the related consolidated
statements of income, changes in shareholders equity and cash flows for
the years then ended. These financial statements are the responsibility of the
Corporations management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in
accordance with auditing standards generally accepted in the United States of
America. 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
financial statements referred to above, present fairly, in all material
respects, the consolidated financial position of Security Capital Corporation
and subsidiaries as of December 31, 2003 and 2002, and the consolidated
results of their operations and their cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.

`/S/  T. E. LOTT & COMPANY


Columbus, Mississippi
January 22, 2004`

---

# INDEPENDENT
AUDITORS REPORT

We have audited the
accompanying consolidated statements of income, changes in shareholders
equity and cash flows of Security Capital Corporation and subsidiaries for the
year ended December 31, 2001. These financial statements are the responsibility
of the Corporations management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in
accordance with auditing standards generally accepted in the United States of
America. 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 audit provides a reasonable basis for our opinion.

In our opinion, the
financial statements referred to above present fairly, in all material respects,
the consolidated results of operations and cash flows of Security Capital
Corporation and subsidiaries for the year ended December 31, 2001, in conformity
with accounting principles generally accepted in the United States.

`/S/  WM. H. POLK & CO.


Batesville, Mississippi
January 29, 2002`