##### 



SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-QSB

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)


OF THE SECURITIES EXCHANGE ACT OF 1934


|                            |  |                      
|--------------------------- |  | ---------------------
|For Quarterly Period Ended: |  | Commission File umber
|June 30, 2003               |  | 1-13640              

SOUTHFIRST BANCSHARES, INC.

(Exact name of registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 63-1121255                          
|                                                               |  |                                     
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)

|                                                                                   |  |             
|---------------------------------------------------------------------------------- |  | ------------
|126 North Norton Avenue, Sylacauga, Alabama                                        |  | 35150       
|                                                                                  
|(Address of principal executive offices)                                           |  | (Zip Code)  
|                                                                                   |  |             
|Registrants telephone number, including area code:                                |  | 256-245-4365
|                                                                                  
|                                                                                   |  |             
|Not applicable                                                                     |  |             
|                                                                                  
|(Former name, former address and former fiscal year, if changed since
last report)

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 period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.

|    |  |   |  |    |  | 
|--- |  | - |  | -- |  | 
|Yes |  | X |  | No |  | 

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

|                                       |  |                             
|-------------------------------------- |  | ----------------------------
|Common Stock, par value $.01 per share |  | 716,044 shares              
|                                       |  |                             
|Class                                  |  | Outstanding at July 31, 2003

Transitional Small Business Disclosure Format:
   Yes     No X





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##### 



SOUTHFIRST BANCSHARES, INC.

TABLE OF CONTENTS

|                                                                                              |                                                                                                                |  |       |     | 
|--------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------- |  | ----- | --- | 
|                                                                                              |                                                                                                                |  | Page 
|                                                                                              |                                                                                                                |  |      
|PART I  FINANCIAL INFORMATION                                                                |                                                                                                                |  |       |    
|Item 1: Financial Statements (Unaudited)                                                      |                                                                                                                |  | 1     |    
|                                                                                              | Consolidated Statements of Financial Condition at June 30, 2003 (Unaudited)
and September 30, 2002             |  |       | 1   | 
|                                                                                              | Consolidated Statements of Operations (Unaudited) for the Three and Nine Months
Ended June 30, 2003 and 2002   |  |       | 2   | 
|                                                                                              | Consolidated Statements of Changes in Stockholders Equity (Unaudited) for the
Nine Months Ended June 30, 2003 |  |       | 3   | 
|                                                                                              | Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended
June 30, 2003 and 2002             |  |       | 4-5 | 
|                                                                                              | Notes to Consolidated Financial Statements (Unaudited)  June 30, 2003 and 2002                                |  |       | 6-9 | 
|Item 2: Managements Discussion and Analysis of Financial Condition and Results of Operations |                                                                                                                |  | 10-15 |    
|Item 3: Controls and Procedures                                                               |                                                                                                                |  | 15    |    
|PART II  OTHER INFORMATION                                                                   |                                                                                                                |  | 16    |    
|Item 1: Legal Proceedings                                                                     |                                                                                                                |  | 16    |    
|Item 6: Exhibits and Reports on Form 8-K                                                      |                                                                                                                |  | 16    |    
|SIGNATURES                                                                                    |                                                                                                                |  | 16    |    
|CERTIFICATIONS                                                                                |                                                                                                                |  | 17-18 |    





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##### 



SOUTHFIRST BANCSHARES, INC.
AND SUBSIDIARIES

PART 1: FINANCIAL INFORMATION

Item 1: Financial Statements

Consolidated Statements of Financial Condition
June 30, 2003 (Unaudited) and September 30, 2002

|                                                            |                                                                                                                                                                                                             |                      |                                            |                |            |             |             |               |            |             |            | 
|----------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------- | ------------------------------------------ | -------------- | ---------- | ----------- | ----------- | ------------- | ---------- | ----------- | ---------- | 
|                                                            |                                                                                                                                                                                                             |                      |                                            |                |            | June 30,    |             | September 30,
|                                                            |                                                                                                                                                                                                             |                      |                                            |                |            | 2003        |             | 2002         
|                                                            |                                                                                                                                                                                                             |                      |                                            |                |            |             |             |              
|                                                            |                                                                                                                                                                                                             |                      |                                            |                |            | (Unaudited) |             |               |            |            
|Assets                                                      |                                                                                                                                                                                                             |                      |                                            |                |            |             |             |              
|Cash and cash equivalents                                   |                                                                                                                                                                                                             | $                    | 7,024,079                                  |                |            | $           | 8,122,898   |              
|Interest-bearing deposits in other financial institutions   |                                                                                                                                                                                                             |                      | 524,277                                    |                |            |             | 883,262     |              
|Investment securities available-for-sale, at fair value     |                                                                                                                                                                                                             |                      | 29,344,262                                 |                |            |             | 26,768,039  |              
|Loans receivable                                            |                                                                                                                                                                                                             |                      | 91,036,022                                 |                |            |             | 93,838,835  |              
|Less allowance for loan losses                              |                                                                                                                                                                                                             |                      | (947,637                                   | )              |            |             | (854,013    | )            
|                                                            |                                                                                                                                                                                                             |                      |                                            |                |            |             |             |              
|                                                            | Net loans                                                                                                                                                                                                   |                      |                                            | 90,088,385     |            |             |             | 92,984,822    |           
|Loans held for sale at cost (which approximates fair value) |                                                                                                                                                                                                             |                      | 4,050,920                                  |                |            |             | 2,292,400   |              
|Foreclosed assets, net                                      |                                                                                                                                                                                                             |                      | 595,759                                    |                |            |             | 79,983      |              
|Premises and equipment, net                                 |                                                                                                                                                                                                             |                      | 4,343,986                                  |                |            |             | 4,867,235   |              
|Federal Home Loan Bank stock, at cost                       |                                                                                                                                                                                                             |                      | 1,117,000                                  |                |            |             | 2,229,800   |              
|Accrued interest receivable                                 |                                                                                                                                                                                                             |                      | 609,897                                    |                |            |             | 734,168     |              
|Other assets                                                |                                                                                                                                                                                                             |                      | 2,628,431                                  |                |            |             | 2,652,237   |              
|                                                            |                                                                                                                                                                                                             |                      |                                            |                |            |             |             |              
|                                                            | Total Assets                                                                                                                                                                                                |                      | $                                          | 140,326,996    |            |             | $           | 141,614,844   |           
|                                                            |                                                                                                                                                                                                             |                      |                                            |                |            |             |             |              
|Liabilities And Stockholders Equity                        |                                                                                                                                                                                                             |                      |                                            |                |            |             |             |              
|Liabilities:                                                |                                                                                                                                                                                                             |                      |                                            |                |            |             |             |              
|                                                            | Deposits:                                                                                                                                                                                                   |                      |                                            |                |            |             |             |               |           
|                                                            |                                                                                                                                                                                                             | Non-interest bearing |                                            | $              | 5,114,702  |             |             | $             | 2,849,970  |            
|                                                            |                                                                                                                                                                                                             | Interest bearing     |                                            |                | 95,135,675 |             |             |               | 93,633,292 |            
|                                                            |                                                                                                                                                                                                             |                      |                                            |                |            |             |             |              
|                                                            |                                                                                                                                                                                                             |                      |                                            | Total deposits |            |             | 100,250,377 |               |            |             | 96,483,262 | 
|                                                            |                                                                                                                                                                                                             |                      |                                            |                |            |             |             |              
|                                                            | Advances by borrowers for property taxes and insurance                                                                                                                                                      |                      |                                            | 214,320        |            |             |             | 276,909       |           
|                                                            | Accrued interest payable                                                                                                                                                                                    |                      |                                            | 745,690        |            |             |             | 825,850       |           
|                                                            | Borrowed funds                                                                                                                                                                                              |                      |                                            | 25,657,861     |            |             |             | 29,057,611    |           
|                                                            | Accrued expenses and other liabilities                                                                                                                                                                      |                      |                                            | 958,708        |            |             |             | 1,092,829     |           
|                                                            |                                                                                                                                                                                                             |                      |                                            |                |            |             |             |              
|                                                            |                                                                                                                                                                                                             |                      | Total liabilities                          |                |            | 127,826,956 |             |               |            | 127,736,461 |           
|                                                            |                                                                                                                                                                                                             |                      |                                            |                |            |             |             |              
|Stockholders Equity:                                       |                                                                                                                                                                                                             |                      |                                            |                |            |             |             |              
|                                                            | Common stock, $.01 par value, 2,000,000 shares authorized,
989,868 shares issued and 710,711shares outstanding at June 30, 2003;
989,868 shares issued and 800,911 shares outstanding at September 30, 2002 |                      |                                            | 9,996          |            |             |             | 9,996         |           
|                                                            | Additional paid-in capital                                                                                                                                                                                  |                      |                                            | 9,819,676      |            |             |             | 9,819,676     |           
|                                                            | Treasury stock, at cost (273,774 shares at June 30, 2003;
183,574 shares at September 30, 2002)                                                                                                             |                      |                                            | (3,719,761     | )          |             |             | (2,407,231    | )         
|                                                            | Deferred compensation on common stock employee benefit plans                                                                                                                                                |                      |                                            | (252,156       | )          |             |             | (324,060      | )         
|                                                            | Shares held in trust at cost (9,775 shares at June 30, 2003
and September 30, 2002)                                                                                                                         |                      |                                            | (107,161       | )          |             |             | (107,161      | )         
|                                                            | Retained earnings                                                                                                                                                                                           |                      |                                            | 6,314,799      |            |             |             | 6,457,443     |           
|                                                            | Accumulated comprehensive other income                                                                                                                                                                      |                      |                                            | 434,647        |            |             |             | 429,720       |           
|                                                            |                                                                                                                                                                                                             |                      |                                            |                |            |             |             |              
|                                                            |                                                                                                                                                                                                             |                      | Total stockholders equity                 |                |            | 12,500,040  |             |               |            | 13,878,383  |           
|                                                            |                                                                                                                                                                                                             |                      |                                            |                |            |             |             |              
|                                                            |                                                                                                                                                                                                             |                      | Total Liabilities and Stockholders Equity |                | $          | 140,326,996 |             |               | $          | 141,614,844 |           
|                                                            |                                                                                                                                                                                                             |                      |                                            |                |            |             |             |              

See accompanying notes to consolidated financial statements.

-1-



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##### 



SOUTHFIRST BANCSHARES, INC.
AND SUBSIDIARIES

Consolidated Statements of Operations (Unaudited)
for the Three and Nine Months Ended June 30, 2003 and 2002

|                                     |                                                                 |                                                     |                                    |           |                   |           |                    |           |           |           |        |           |           |           |          |           |           |           | 
|------------------------------------ | --------------------------------------------------------------- | --------------------------------------------------- | ---------------------------------- | --------- | ----------------- | --------- | ------------------ | --------- | --------- | --------- | ------ | --------- | --------- | --------- | -------- | --------- | --------- | --------- | 
|                                     |                                                                 |                                                     |                                    |           | Nine Months Ended |           | Three Months Ended
|                                     |                                                                 |                                                     |                                    |           | June 30,          |           | June 30,          
|                                     |                                                                 |                                                     |                                    |           |                   |           |                   
|                                     |                                                                 |                                                     |                                    |           | 2003              |           | 2002               |           | 2003      |           | 2002  
|                                     |                                                                 |                                                     |                                    |           |                   |           |                    |           |           |           |       
|Interest and dividend income:        |                                                                 |                                                     |                                    |           |                   |           |                    |           |           |           |        |           |           |           |          |          
|                                     | Interest and fees on loans                                      |                                                     | $                                  | 4,496,951 |                   |           | $                  | 5,181,512 |           |           | $      | 1,451,490 |           |           | $        | 1,577,904 |          
|                                     | Interest income on deposits in
other financial institutions     |                                                     |                                    | 77,650    |                   |           |                    | 76,810    |           |           |        | 20,372    |           |           |          | 23,624    |          
|                                     | Interest and dividend income on
investment securities           |                                                     |                                    | 984,759   |                   |           |                    | 1,198,086 |           |           |        | 341,068   |           |           |          | 463,184   |          
|                                     |                                                                 |                                                     |                                    |           |                   |           |                    |           |           |           |        |           |           |           |          |          
|                                     |                                                                 |                                                     | Total interest and dividend
income |           |                   | 5,559,360 |                    |           |           | 6,456,408 |        |           |           | 1,812,930 |          |           |           | 2,064,712 | 
|                                     |                                                                 |                                                     |                                    |           |                   |           |                    |           |           |           |        |           |           |           |          |          
|Interest expense:                    |                                                                 |                                                     |                                    |           |                   |           |                    |           |           |           |        |           |           |           |          |          
|                                     | Interest on deposits                                            |                                                     |                                    | 1,999,088 |                   |           |                    | 2,732,073 |           |           |        | 610,036   |           |           |          | 795,882   |          
|                                     | Interest on borrowed funds                                      |                                                     |                                    | 759,978   |                   |           |                    | 959,185   |           |           |        | 254,281   |           |           |          | 313,297   |          
|                                     |                                                                 |                                                     |                                    |           |                   |           |                    |           |           |           |        |           |           |           |          |          
|                                     |                                                                 | Total interest expense                              |                                    |           | 2,759,066         |           |                    |           | 3,691,258 |           |        |           | 864,317   |           |          |           | 1,109,179 |          
|                                     |                                                                 |                                                     |                                    |           |                   |           |                    |           |           |           |        |           |           |           |          |          
|                                     |                                                                 | Net interest income                                 |                                    |           | 2,800,294         |           |                    |           | 2,765,150 |           |        |           | 948,613   |           |          |           | 955,533   |          
|Provision for loan losses (benefit)  |                                                                 |                                                     | 118,451                            |           |                   |           | (363,266           | )         |           |           | 29,488 |           |           |           | (388,362 | )        
|                                     |                                                                 |                                                     |                                    |           |                   |           |                    |           |           |           |        |           |           |           |          |          
|                                     |                                                                 | Net interest income after
provision for loan losses |                                    |           | 2,681,843         |           |                    |           | 3,128,416 |           |        |           | 919,125   |           |          |           | 1,343,895 |          
|                                     |                                                                 |                                                     |                                    |           |                   |           |                    |           |           |           |        |           |           |           |          |          
|Other income:                        |                                                                 |                                                     |                                    |           |                   |           |                    |           |           |           |        |           |           |           |          |          
|                                     | Service charges and other fees                                  |                                                     |                                    | 405,890   |                   |           |                    | 320,873   |           |           |        | 149,536   |           |           |          | 96,760    |          
|                                     | Employee benefit trust and
consulting fees                      |                                                     |                                    | 866,438   |                   |           |                    | 869,731   |           |           |        | 326,225   |           |           |          | 310,883   |          
|                                     | Gain on sale of loans                                           |                                                     |                                    | 872,409   |                   |           |                    | 343,398   |           |           |        | 329,291   |           |           |          | 121,084   |          
|                                     | Gain (loss) on sale of
foreclosed assets                        |                                                     |                                    | 5,700     |                   |           |                    | (14,606   | )         |           |        | 22,595    |           |           |          | (18,780   | )        
|                                     | Gain (loss) on sale of equipment                                |                                                     |                                    | 13,890    |                   |           |                    | (4,180    | )         |           |        | 2,725     |           |           |          |          |          
|                                     | Gain (loss) on sale of
investment securities
available-for-sale |                                                     |                                    | 236,150   |                   |           |                    | 163,757   |           |           |        | 2,412     |           |           |          | (6,423    | )        
|                                     | Other                                                           |                                                     |                                    | 268,981   |                   |           |                    | 483,257   |           |           |        | 94,840    |           |           |          | 123,923   |          
|                                     |                                                                 |                                                     |                                    |           |                   |           |                    |           |           |           |        |           |           |           |          |          
|                                     |                                                                 | Total other income                                  |                                    |           | 2,669,458         |           |                    |           | 2,162,230 |           |        |           | 927,624   |           |          |           | 627,447   |          
|                                     |                                                                 |                                                     |                                    |           |                   |           |                    |           |           |           |        |           |           |           |          |          
|Other expenses:                      |                                                                 |                                                     |                                    |           |                   |           |                    |           |           |           |        |           |           |           |          |          
|                                     | Compensation and benefits                                       |                                                     |                                    | 3,138,281 |                   |           |                    | 2,641,554 |           |           |        | 1,056,364 |           |           |          | 947,127   |          
|                                     | Net occupancy expense                                           |                                                     |                                    | 295,654   |                   |           |                    | 261,955   |           |           |        | 95,139    |           |           |          | 88,714    |          
|                                     | Furniture and fixtures                                          |                                                     |                                    | 340,043   |                   |           |                    | 340,348   |           |           |        | 109,426   |           |           |          | 115,495   |          
|                                     | Data processing                                                 |                                                     |                                    | 202,165   |                   |           |                    | 241,338   |           |           |        | 58,380    |           |           |          | 75,709    |          
|                                     | Office supplies and expense                                     |                                                     |                                    | 328,303   |                   |           |                    | 301,735   |           |           |        | 113,430   |           |           |          | 102,958   |          
|                                     | Deposit insurance premiums                                      |                                                     |                                    | 82,028    |                   |           |                    | 57,866    |           |           |        | 27,163    |           |           |          | 21,069    |          
|                                     | Goodwill amortization                                           |                                                     |                                    |          |                   |           |                    | 40,459    |           |           |        |          |           |           |          | 13,485    |          
|                                     | Legal                                                           |                                                     |                                    | 126,350   |                   |           |                    | 309,067   |           |           |        | 66,350    |           |           |          | 217,883   |          
|                                     | Other                                                           |                                                     |                                    | 510,772   |                   |           |                    | 444,144   |           |           |        | 195,378   |           |           |          | 164,453   |          
|                                     |                                                                 |                                                     |                                    |           |                   |           |                    |           |           |           |        |           |           |           |          |          
|                                     |                                                                 | Total other expenses                                |                                    |           | 5,023,596         |           |                    |           | 4,638,466 |           |        |           | 1,721,630 |           |          |           | 1,746,893 |          
|                                     |                                                                 |                                                     |                                    |           |                   |           |                    |           |           |           |        |           |           |           |          |          
|                                     |                                                                 | Income before income taxes                          |                                    |           | 327,705           |           |                    |           | 652,180   |           |        |           | 125,119   |           |          |           | 224,449   |          
|Income tax expense                   |                                                                 |                                                     | 124,597                            |           |                   |           | 248,295            |           |           |           | 47,485 |           |           |           | 80,971   |          
|                                     |                                                                 |                                                     |                                    |           |                   |           |                    |           |           |           |        |           |           |           |          |          
|                                     |                                                                 | Net income                                          |                                    | $         | 203,108           |           |                    | $         | 403,885   |           |        | $         | 77,634    |           |          | $         | 143,478   |          
|                                     |                                                                 |                                                     |                                    |           |                   |           |                    |           |           |           |        |           |           |           |          |          
|Earnings per share:                  |                                                                 |                                                     |                                    |           |                   |           |                    |           |           |           |        |           |           |           |          |          
|                                     | Basic                                                           |                                                     |                                    | 0.27      |                   |           |                    | 0.49      |           |           |        | 0.11      |           |           |          | 0.18      |          
|                                     | Diluted                                                         |                                                     |                                    | 0.26      |                   |           |                    | 0.49      |           |           |        | 0.11      |           |           |          | 0.18      |          
|Cash dividends declared              |                                                                 |                                                     | 0.45                               |           |                   |           | 0.45               |           |           |           | 0.15   |           |           |           | 0.15     |          
|Weighted average shares outstanding: |                                                                 |                                                     |                                    |           |                   |           |                    |           |           |           |        |           |           |           |          |          
|                                     | Basic                                                           |                                                     |                                    | 752,700   |                   |           |                    | 822,420   |           |           |        | 711,819   |           |           |          | 799,824   |          
|                                     | Diluted                                                         |                                                     |                                    | 767,263   |                   |           |                    | 825,397   |           |           |        | 727,766   |           |           |          | 805,971   |          

See accompanying notes to consolidated financial statements.

-2-



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##### 



SOUTHFIRST BANCSHARES, INC.
AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders Equity (Unaudited)
for the Nine Months Ended June 30, 2003

|                                                                                                                                 |            |   |        |  |         |   |            |  |               |   |            |   |          |   |               |   |               |   |          |   |             |   |           |         |  |   |         |  |  |   |            |         | 
|-------------------------------------------------------------------------------------------------------------------------------- | ---------- | - | ------ |  | ------- | - | ---------- |  | ------------- | - | ---------- | - | -------- | - | ------------- | - | ------------- | - | -------- | - | ----------- | - | --------- | ------- |  | - | ------- |  |  | - | ---------- | ------- | 
|                                                                                                                                 |            |   |        |  |         |   |            |  |               |   |            |   |          |   | Deferred      |   |               |   |          |   |             |   |           |         |  |   |         |  |  |   |           
|                                                                                                                                 |            |   |        |  |         |   |            |  |               |   |            |   |          |   | Compensation  |   |               |   |          |   |             |   |           |         |  |   |         |  |  |   |           
|                                                                                                                                 |            |   |        |  |         |   |            |  |               |   |            |   |          |   | on Common     |   |               |   |          |   |             |   |           |         |  |   |         |  |  |   |           
|                                                                                                                                 |            |   |        |  |         |   | Additional |  |               |   |            |   | Stock    |   | Shares        |   |               |   |          |   | Accumulated |   | Total    
|                                                                                                                                 |            |   | Common |  | Paid-in |   | Treasury   |  | Employee      |   | Held in    |   | Retained |   | Comprehensive |   | Stockholders'
|                                                                                                                                 |            |   | Stock  |  | Capital |   | Stock      |  | Benefit Plans |   | Trust      |   | Earnings |   | Other Income  |   | Equity       
|                                                                                                                                 |            |   |        |  |         |   |            |  |               |   |            |   |          |   |               |   |              
|Balance at September 30,
2002                                                                                                    |            | $ | 9,996  |  |         | $ | 9,819,676  |  |               | $ | (2,407,231 | ) |          | $ | (324,060      | ) |               | $ | (107,161 | ) |             | $ | 6,457,443 |         |  | $ | 429,720 |  |  | $ | 13,878,383 |        
|                                                                                                                                 |            |   |        |  |         |   |            |  |               |   |            |   |          |   |               |   |               |   |          |   |             |   |           |         |  |   |         |  |  |   |            |        
|Comprehensive income:                                                                                                            |            |   |        |  |         |   |            |  |               |   |            |   |          |   |               |   |               |   |          |   |             |   |           |         |  |   |         |  |  |   |            |        
|                                                                                                                                 | Net income |   |        |  |         |   |            |  |               |   |            |   |          |   |               |   |               |   |          |   |             |   |           | 203,108 |  |   |         |  |  |   |            | 203,108 | 
|Change in net unrealized
gain on available-for-sale
securities, net of reclassi-
fication adjustments and
income taxes of $3,019 |            |   |        |  |         |   |            |  |               |   |            |   |          |   |               |   |               |   |          |   |             |   |           |         |  |   | 4,927   |  |  |   | 4,927      |        
|Total comprehensive
income (loss)                                                                                                |            |   |        |  |         |   |            |  |               |   |            |   |          |   |               |   |               |   |          |   |             |   |           |         |  |   |         |  |  |   | 208,035    |        
|                                                                                                                                 |            |   |        |  |         |   |            |  |               |   |            |   |          |   |               |   |               |   |          |   |             |   |           |         |  |   |         |  |  |   |            |        
|Vesting of deferred
compensation shares                                                                                          |            |   |        |  |         |   |            |  |               |   |            |   |          |   | 71,904        |   |               |   |          |   |             |   |           |         |  |   |         |  |  |   | 71,904     |        
|Acquisition of Treasury
stock                                                                                                    |            |   |        |  |         |   |            |  |               |   | (1,312,530 | ) |          |   |               |   |               |   |          |   |             |   |           |         |  |   |         |  |  |   | (1,312,530 | )      
|Cash dividends declared                                                                                                          |            |   |        |  |         |   |            |  |               |   |            |   |          |   |               |   |               |   |          |   |             |   | (345,752  | )       |  |   |         |  |  |   | (345,752   | )      
|                                                                                                                                 |            |   |        |  |         |   |            |  |               |   |            |   |          |   |               |   |               |   |          |   |             |   |           |         |  |   |         |  |  |   |            |        
|Balance at June 30, 2003                                                                                                         |            | $ | 9,996  |  |         | $ | 9,819,676  |  |               | $ | (3,719,761 | ) |          | $ | (252,156      | ) |               | $ | (107,161 | ) |             | $ | 6,314,799 |         |  | $ | 434,647 |  |  | $ | 12,500,040 |        
|                                                                                                                                 |            |   |        |  |         |   |            |  |               |   |            |   |          |   |               |   |               |   |          |   |             |   |           |         |  |   |         |  |  |   |            |        

-3-



---



##### 



SOUTHFIRST BANCSHARES, INC.
AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)
for the Nine Months Ended June 30, 2003 and 2002

|                      |                                                                                   |                                                                         |                                       |             |             |            |      |             |             |            |  
|--------------------- | --------------------------------------------------------------------------------- | ----------------------------------------------------------------------- | ------------------------------------- | ----------- | ----------- | ---------- | ---- | ----------- | ----------- | ---------- | -
|                      |                                                                                   |                                                                         |                                       |             | 2003        |            | 2002
|                      |                                                                                   |                                                                         |                                       |             |             |            |     
|Operating activities: |                                                                                   |                                                                         |                                       |             |             |            |      |            
|                      | Net income                                                                        |                                                                         | $                                     | 203,108     |             |            | $    | 403,885     |            
|                      | Adjustments to reconcile net income to net cash provided by operating activities: |                                                                         |                                       |             |             |            |      |             |            
|                      |                                                                                   | Provision for loan losses                                               |                                       |             | 118,451     |            |      |             | (363,266    | )         
|                      |                                                                                   | Depreciation and amortization                                           |                                       |             | 255,712     |            |      |             | 259,911     |           
|                      |                                                                                   | Gain on sale of securities                                              |                                       |             | (236,150    | )          |      |             | (163,757    | )         
|                      |                                                                                   | Gain on sale of loans                                                   |                                       |             | (872,409    | )          |      |             | (343,398    | )         
|                      |                                                                                   | Decrease in deferred loan origination fees                              |                                       |             | (2,125      | )          |      |             | (42,604     | )         
|                      |                                                                                   | Net amortization of premium on investment securities available-for-sale |                                       |             | (9,818      | )          |      |             | (80,301     | )         
|                      |                                                                                   | (Gain) loss on sale of other property owned                             |                                       |             | (13,890     | )          |      |             | 4,180       |           
|                      |                                                                                   | (Gain) loss on sale of foreclosed assets                                |                                       |             | (5,700      | )          |      |             | 14,606      |           
|                      |                                                                                   | Loans originated for sale                                               |                                       |             | (41,732,909 | )          |      |             | (15,926,891 | )         
|                      |                                                                                   | Proceeds from sale of loans                                             |                                       |             | 40,846,799  |            |      |             | 15,529,219  |           
|                      |                                                                                   | Decrease in accrued interest receivable                                 |                                       |             | 124,271     |            |      |             | 182,675     |           
|                      |                                                                                   | (Increase) decrease in other assets                                     |                                       |             | 23,806      |            |      |             | (987,897    | )         
|                      |                                                                                   | Deferred compensation expense                                           |                                       |             | 71,904      |            |      |             | 71,942      |           
|                      |                                                                                   | Decrease in accrued interest payable                                    |                                       |             | (80,160     | )          |      |             | (338,886    | )         
|                      |                                                                                   | Increase (decrease) in accrued expenses and other liabilities           |                                       |             | (137,140    | )          |      |             | 309,538     |           
|                      |                                                                                   |                                                                         |                                       |             |             |            |      |            
|                      |                                                                                   |                                                                         | Net cash used in operating activities |             |             | (1,446,250 | )    |             |             | (1,471,044 | )
|                      |                                                                                   |                                                                         |                                       |             |             |            |      |            
|Investing activities: |                                                                                   |                                                                         |                                       |             |             |            |      |            
|                      | Net change in interest-bearing deposits in other financial institutions           |                                                                         |                                       | 358,985     |             |            |      | (126,191    | )          
|                      | Proceeds from calls and maturities of investment securities available-for-sale    |                                                                         |                                       | 14,981,500  |             |            |      | 2,628,272   |            
|                      | Purchase of investment securities available-for-sale                              |                                                                         |                                       | (23,713,384 | )           |            |      | (14,642,587 | )          
|                      | Proceeds from sale of investment securities available-for-sale                    |                                                                         |                                       | 6,409,574   |             |            |      | 13,789,733  |            
|                      | Proceeds from sale of Federal Home Loan Bank stock                                |                                                                         |                                       | 1,112,800   |             |            |      |            |            
|                      | Net decrease in loans                                                             |                                                                         |                                       | 2,780,111   |             |            |      | 11,146,364  |            
|                      | Purchase of premises and equipment                                                |                                                                         |                                       | (170,631    | )           |            |      | (376,863    | )          
|                      | Proceeds from sale of foreclosed real estate                                      |                                                                         |                                       | 267,386     |             |            |      | 214,413     |            
|                      | Proceeds from sale of other assets                                                |                                                                         |                                       | 452,059     |             |            |      | 6,200       |            
|                      | Transfer from loans of real estate owned property                                 |                                                                         |                                       | (780,364    | )           |            |      | (356,416    | )          
|                      | Transfer from loans of other repossessed assets                                   |                                                                         |                                       | 2,901       |             |            |      | (19,878     | )          
|                      |                                                                                   |                                                                         |                                       |             |             |            |      |            
|                      |                                                                                   | Net cash provided by investment activities                              |                                       |             | 1,700,937   |            |      |             | 12,263,047  |           
|                      |                                                                                   |                                                                         |                                       |             |             |            |      |            

(Continued)

See accompanying notes to consolidated financial statements.

-4-



---



##### 



SOUTHFIRST BANCSHARES, INC.
AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)
for the Nine Months Ended June 30, 2003 and 2002

|                                                   |                                                                               |                                       |            |            |            |      |           |             |             |  
|-------------------------------------------------- | ----------------------------------------------------------------------------- | ------------------------------------- | ---------- | ---------- | ---------- | ---- | --------- | ----------- | ----------- | -
|                                                   |                                                                               |                                       |            | 2003       |            | 2002
|                                                   |                                                                               |                                       |            |            |            |     
|Financing activities:                              |                                                                               |                                       |            |            |            |      |           |            
|                                                   | Increase (decrease) in deposits                                               |                                       | $          | 3,767,115  |            |      | $         | (1,111,895  | )          
|                                                   | Proceeds from borrowed funds                                                  |                                       |            | 4,589,000  |            |      |           | 16,923,861  |            
|                                                   | Repayment of borrowed funds                                                   |                                       |            | (7,988,750 | )          |      |           | (26,115,000 | )          
|                                                   | Cash dividends paid                                                           |                                       |            | (345,752   | )          |      |           | (375,595    | )          
|                                                   | Acquisition of treasury stock                                                 |                                       |            | (1,312,530 | )          |      |           | (700,600    | )          
|                                                   | Increase (decrease) in advances by borrowers for property taxes and insurance |                                       |            | (62,589    | )          |      |           | (136,612    | )          
|                                                   |                                                                               |                                       |            |            |            |      |           |            
|                                                   |                                                                               | Net cash used in financing activities |            |            | (1,353,506 | )    |           |             | (11,515,841 | )
|                                                   |                                                                               |                                       |            |            |            |      |           |            
|Increase (decrease) in cash and cash equivalents   |                                                                               |                                       | (1,098,819 | )          |            |      | (723,838  | )          
|Cash and cash equivalents at beginning of period   |                                                                               |                                       | 8,122,898  |            |            |      | 6,020,186 |            
|                                                   |                                                                               |                                       |            |            |            |      |           |            
|Cash and cash equivalents at end of period         |                                                                               | $                                     | 7,024,079  |            |            | $    | 5,296,348 |            
|                                                   |                                                                               |                                       |            |            |            |      |           |            
|Supplemental information on cash payments:         |                                                                               |                                       |            |            |            |      |           |            
|                                                   | Interest paid                                                                 |                                       | $          | 2,839,226  |            |      | $         | 4,030,144   |            
|                                                   |                                                                               |                                       |            |            |            |      |           |            
|                                                   | Income taxes paid                                                             |                                       | $          | 185,375    |            |      | $         | 130,719     |            
|                                                   |                                                                               |                                       |            |            |            |      |           |            
|Supplemental information on non-cash transactions: |                                                                               |                                       |            |            |            |      |           |            
|                                                   | Change in net unrealized gain on investment securities available-for-sale     |                                       | $          | 4,927      |            |      | $         | 49,857      |            
|                                                   |                                                                               |                                       |            |            |            |      |           |            
|                                                   | Real estate obtained through foreclosure                                      |                                       | $          | 780,364    |            |      | $         | 356,416     |            
|                                                   |                                                                               |                                       |            |            |            |      |           |            

See accompanying notes to consolidated financial statements.

-5-



---



##### 



SOUTHFIRST BANCSHARES, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)
June 30, 2003 and 2002



|(1) |  | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | Information filed on this Form 10-QSB as of and for the quarter ended June
30, 2003, was derived from the financial records of SouthFirst Bancshares,
Inc. (SouthFirst) and its wholly-owned subsidiaries, First Federal of the
South (First Federal), and SouthFirst Financial Services, Inc.
(SouthFirst Financial) and First Federals wholly owned subsidiaries,
Pension & Benefit Trust Company (Pension & Benefit), a Montgomery,
Alabama based employee benefits consulting firm, and SouthFirst Mortgage,
Inc., a Birmingham, Alabama based residential construction loan and
mortgage loan origination office. Collectively, SouthFirst Bancshares,
Inc. and its subsidiaries are referred to herein as the Company and as
SouthFirst.
|   
|    |  | In the opinion of management of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments (none of which
are other than normal recurring accruals) necessary for a fair statement of
the financial position of the Company and the results of operations for the
three and nine month periods ended June 30, 2003 and 2002. The results
contained in these statements are not necessarily indicative of the results
which may be expected for the entire year.                                                                                                                                                                                                                                                     
|   
|(2) |  | New Accounting Standard                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    |  | In June 2001, the FASB issued Statement of Financial Accounting Standards
No. 142 (SFAS 142), Goodwill and Other Intangible Assets. Statement 142
provides guidance for the amortization of goodwill arising from the use of
the purchase method to account for business combinations. Goodwill arising
from purchase business combinations completed after June 30, 2001 will not
be amortized. The accounting for goodwill and other intangible assets
required under Statement 142 is effective for the fiscal year beginning
October 1, 2002.                                                                                                                                                                                                          
|   
|    |  | The following table illustrates the impact of the adoption of SFAS 142:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

|                                                                                                            |                                                                |   |                   |     |                    |   |         |     |      |   |        |     |  |   |         |     | 
|----------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------- | - | ----------------- | --- | ------------------ | - | ------- | --- | ---- | - | ------ | --- |  | - | ------- | --- | 
|                                                                                                            |                                                                |   | Nine Months Ended |     | Three Months Ended
|                                                                                                            |                                                                |   | June 30,          |     | June 30,          
|                                                                                                            |                                                                |   |                   |     |                   
|                                                                                                            |                                                                |   | 2003              |     | 2002               |   | 2003    |     | 2002
|                                                                                                            |                                                                |   |                   |     |                    |   |         |     |     
|Net income                                                                                                  |                                                                | $ | 203,108           |     |                    | $ | 403,885 |     |      | $ | 77,634 |     |  | $ | 143,478 |    
|Add back: excess purchase price
amortization (net of taxes of $15,374
for 9 months and $5,124 for 3 months) |                                                                |   |                  |     |                    |   | 25,085  |     |      |   |       |     |  |   | 8,361   |    
|                                                                                                            |                                                                |   |                   |     |                    |   |         |     |      |   |        |     |  |   |         |    
|Net income as adjusted for the adoption
of SFAS 142                                                         |                                                                | $ | 203,108           |     |                    | $ | 428,970 |     |      | $ | 77,634 |     |  | $ | 151,839 |    
|                                                                                                            |                                                                |   |                   |     |                    |   |         |     |      |   |        |     |  |   |         |    
|Per share:                                                                                                  |                                                                |   |                   |     |                    |   |         |     |      |   |        |     |  |   |         |    
|                                                                                                            | Net income                                                     |   |                   | .27 |                    |   |         | .49 |      |   |        | .11 |  |   |         | .18 | 
|                                                                                                            | Net income  diluted                                           |   |                   | .26 |                    |   |         | .49 |      |   |        | .11 |  |   |         | .18 | 
|                                                                                                            | Net income, as adjusted for the adoption
of SFAS 142           |   |                   | .27 |                    |   |         | .52 |      |   |        | .11 |  |   |         | .19 | 
|                                                                                                            | Net income  diluted, as adjusted for the
adoption of SFAS 142 |   |                   | .26 |                    |   |         | .52 |      |   |        | .11 |  |   |         | .19 | 

-6-



---



##### 





|(3) |  | Stock-Based Compensation Plans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | During 1995, the Company adopted a Stock Option and Incentive Plan for
directors and key employees of the Company. The exercise price cannot be
less than the market price on the grant date and number of shares available
for options cannot exceed 83,000. Stock appreciation rights may also be
granted under the plan. During 1998, the Company adopted the 1998 Stock
Option & Incentive Plan for directors and key employees of the Company.
Under the 1998 plan, options to acquire 63,361 shares had been granted.
The term of the options range from seven to ten years and they vest equally
over periods from three to five years.
|   
|    |  | Following is a summary of the status of the 1995 and 1998 plans:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

|                                  |  |           |        |                  |  |           |       |                  |  |  |        |   |  |   |       | 
|--------------------------------- |  | --------- | ------ | ---------------- |  | --------- | ----- | ---------------- |  |  | ------ | - |  | - | ----- | 
|                                  |  | 1995 Plan |        | 1998 Plan       
|                                  |  |           |        |                 
|                                  |  | Number    |        | Weighted Average |  | Number    |       | Weighted Average
|                                  |  | of Shares |        | Exercise Price   |  | of Shares |       | Exercise Price  
|                                  |  |           |        |                  |  |           |       |                 
|Outstanding at September 30, 2002 |  |           | 45,311 |                  |  | $         | 12.59 |                  |  |  | 47,088 |   |  | $ | 13.69 | 
|Granted                           |  |           | 28,389 |                  |  |           | 12.10 |                  |  |  | 16,211 |   |  |   | 12.10 | 
|Forfeited                         |  |           |       |                  |  |           |      |                  |  |  | (1,328 | ) |  |   | 9.75  | 
|                                  |  |           |        |                  |  |           |       |                  |  |  |        |   |  |   |       | 
|Outstanding at June 30, 2003      |  |           | 73,700 |                  |  | $         | 12.40 |                  |  |  | 61,971 |   |  | $ | 13.36 | 
|                                  |  |           |        |                  |  |           |       |                  |  |  |        |   |  |   |       | 



| |  | Information pertaining to options outstanding at June 30, 2003 is as
follows:
| |  | -----------------------------------------------------------------------------

|                             |        |                    |         |                  |        |                |            |                     |       |                     |  |  |        |        |        |                  |       |  |  |  |  | 
|---------------------------- | ------ | ------------------ | ------- | ---------------- | ------ | -------------- | ---------- | ------------------- | ----- | ------------------- |  |  | ------ | ------ | ------ | ---------------- | ----- |  |  |  |  | 
|                             |        |                    |         |                  |        |                |            | Options Outstanding |       | Options Exercisable
|                             |        |                    |         |                  |        |                |            |                     |       |                    
|                             |        |                    |         |                  |        |                |            | Weighted Average    |       |                     |  |  |        |        |        |                  |       |  |  | 
|                             |        |                    |         |                  |        |                |            | Remaining           |       | Weighted Average    |  |  |        |        |        | Weighted Average
|Exercise Price               |        | Number Outstanding |         | Contractual Life |        | Exercise Price |            | Number Exercisable  |       | Exercise Price     
|                             |        |                    |         |                  |        |                |            |                     |       |                    
|                             |        | $9.75              |         |                  | 21,237 |                |            | 4.35 years          |       |                     |  |  |        |        | 14,159 |                  |       |  |  | 
|                             |        | $9.92              |         |                  | 9,000  |                |            | 8.42 years          |       |                     |  |  |        |        | 1,800  |                  |       |  |  | 
|                             | $12.10 |                    |         | 44,600           |        |                | 9.30 years |                     |       |                     |  |  |        |       |        |                  |       |  | 
|                             | $14.00 |                    |         | 29,880           |        |                | 2.18 years |                     |       |                     |  |  |        | 29,880 |        |                  |       |  | 
|                             | $15.75 |                    |         | 30,954           |        |                | 4.58 years |                     |       |                     |  |  |        | 30,954 |        |                  |       |  | 
|                             |        |                    |         |                  |        |                |            |                     |       |                     |  |  |        |        |        |                  |       |  |  | 
|Outstanding at June
30, 2003 |        |                    | 135,671 |                  |        | 5.82 years     |            | $                   | 12.84 |                     |  |  | 76,793 |        |        | $                | 13.83 | 
|                             |        |                    |         |                  |        |                |            |                     |       |                     |  |  |        |        |        |                  |       |  |  | 



| |  | The Company accounts for these plans under the recognition and measurement
principles of APB Opinion No. 25, Accounting for Stock Issued to Employees,
and related Interpretations. No stock-based employee compensation cost is
reflected in net income, as all options granted under these plans had an
exercise price equal to the market value of the underlying common stock on
the date of grant. The following table illustrates the effect on net
income and earnings per share if the Company had applied the fair value
recognition provisions of FASB Statement No. 123, Accounting for
Stock-Based Compensation, to stock-based employee compensation.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-7-



---



##### 



|                                                                                                                                            |                       |   |                   |     |                    |   |         |     |      |   |        |     |  |   |         |     | 
|------------------------------------------------------------------------------------------------------------------------------------------- | --------------------- | - | ----------------- | --- | ------------------ | - | ------- | --- | ---- | - | ------ | --- |  | - | ------- | --- | 
|                                                                                                                                            |                       |   | Nine Months Ended |     | Three Months Ended
|                                                                                                                                            |                       |   | June 30,          |     | June 30,          
|                                                                                                                                            |                       |   |                   |     |                   
|                                                                                                                                            |                       |   | 2003              |     | 2002               |   | 2003    |     | 2002
|                                                                                                                                            |                       |   |                   |     |                    |   |         |     |     
|Net income, as reported                                                                                                                     |                       | $ | 203,108           |     |                    | $ | 403,885 |     |      | $ | 77,634 |     |  | $ | 143,478 |    
|Deduct: Total stock-based employee
compensation expense determined under
fair value based method for all awards,
net of related tax effects |                       |   | (6,104            | )   |                    |   | (8,114  | )   |      |   | (2,035 | )   |  |   | (2,705  | )  
|                                                                                                                                            |                       |   |                   |     |                    |   |         |     |      |   |        |     |  |   |         |    
|Pro forma net income                                                                                                                        |                       | $ | 197,004           |     |                    | $ | 395,771 |     |      | $ | 75,599 |     |  | $ | 140,773 |    
|                                                                                                                                            |                       |   |                   |     |                    |   |         |     |      |   |        |     |  |   |         |    
|Earnings per share:                                                                                                                         |                       |   |                   |     |                    |   |         |     |      |   |        |     |  |   |         |    
|                                                                                                                                            | Basic  as reported   |   |                   | .27 |                    |   |         | .49 |      |   |        | .11 |  |   |         | .18 | 
|                                                                                                                                            | Basic  pro forma     |   |                   | .26 |                    |   |         | .48 |      |   |        | .11 |  |   |         | .18 | 
|                                                                                                                                            | Diluted  as reported |   |                   | .26 |                    |   |         | .49 |      |   |        | .11 |  |   |         | .18 | 
|                                                                                                                                            | Diluted  pro forma   |   |                   | .26 |                    |   |         | .48 |      |   |        | .10 |  |   |         | .17 | 



| |  | Because the SFAS No. 123 method of accounting has not been applied to
options granted prior to October 1, 1995, the resulting pro forma
compensation costs may not be representative of that to be expected in
future years.
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The fair value of each option grant is estimated on the date of the grant
using the Black-Scholes option-pricing model with the following weighted
average assumptions:                                                     

|                        |  |      |      | 
|----------------------- |  | ---- | ---- | 
|                        |  | 2003
|                        |  |     
|Dividend yield          |  |      | 5.10 | 
|Expected life           |  |      | 8.90 | 
|Expected volatility     |  |      | 8.16 | 
|Risk-free interest rate |  |      | 4.89 | 



|(4) |  | Business Segment Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | The Company organizes its business units into two reportable segments:
traditional banking activities and employee benefits consulting and trust
activities. The banking segment provides a full range of banking services
within its primary market areas of central Alabama. The employee benefits
trust company operates primarily in the state of Alabama. The Companys
reportable business segments are strategic business units that offer
different products and services. Each segment is managed separately,
because each unit is subject to different marketing and regulatory
environments.
|   
|    |  | The accounting policies used by each reportable segment are the same as
those discussed in Note 1 to the Consolidated Financial Statements included
under Exhibit 99.1 of the Annual Report on Form 10-KSB. The following
table presents financial information for each reportable segment:                                                                                                                                                                                                                                                                                                            

-8-



---



##### 



|                                                    |  |                                 |           |                                 |  |          |         |            |  |            |           |          |  |   |           |          |  |   |         |  |  |   |           |  
|--------------------------------------------------- |  | ------------------------------- | --------- | ------------------------------- |  | -------- | ------- | ---------- |  | ---------- | --------- | -------- |  | - | --------- | -------- |  | - | ------- |  |  | - | --------- | -
|                                                    |  | Nine Months Ended June 30, 2003 |           | Nine Months Ended June 30, 2002
|                                                    |  |                                 |           |                                
|                                                    |  |                                 |           |                                 |  | Employee |         |            |  |            |           |          |  |   |           | Employee |  |   |         | 
|                                                    |  | Banking                         |           | Benefits                        |  |          |         |            |  | Banking    |           | Benefits |  |   |           |         
|                                                    |  | Activities                      |           | Activities                      |  | Total    |         | Activities |  | Activities |           | Total   
|                                                    |  |                                 |           |                                 |  |          |         |            |  |            |           |         
|Interest and dividend
income                        |  | $                               | 5,543,858 |                                 |  | $        | 15,502  |            |  | $          | 5,559,360 |          |  | $ | 6,422,751 |          |  | $ | 33,657  |  |  | $ | 6,456,408 |  
|Interest expenses                                   |  |                                 | 2,759,066 |                                 |  |          |        |            |  |            | 2,759,066 |          |  |   | 3,691,258 |          |  |   |        |  |  |   | 3,691,258 |  
|                                                    |  |                                 |           |                                 |  |          |         |            |  |            |           |          |  |   |           |          |  |   |         |  |  |   |           |  
|Net interest income                                 |  |                                 | 2,784,792 |                                 |  |          | 15,502  |            |  |            | 2,800,294 |          |  |   | 2,731,493 |          |  |   | 33,657  |  |  |   | 2,765,150 |  
|Provision for loan
losses (benefit)                 |  |                                 | 118,451   |                                 |  |          |        |            |  |            | 118,451   |          |  |   | (363,266  | )        |  |   |        |  |  |   | (363,266  | )
|                                                    |  |                                 |           |                                 |  |          |         |            |  |            |           |          |  |   |           |          |  |   |         |  |  |   |           |  
|Net interest income after
provision for loan losses |  |                                 | 2,666,341 |                                 |  |          | 15,502  |            |  |            | 2,681,843 |          |  |   | 3,094,759 |          |  |   | 33,657  |  |  |   | 3,128,416 |  
|Other income                                        |  |                                 | 1,794,020 |                                 |  |          | 875,438 |            |  |            | 2,669,458 |          |  |   | 1,293,378 |          |  |   | 868,852 |  |  |   | 2,162,230 |  
|Other expenses                                      |  |                                 | 4,212,629 |                                 |  |          | 810,967 |            |  |            | 5,023,596 |          |  |   | 3,821,998 |          |  |   | 816,468 |  |  |   | 4,638,466 |  
|                                                    |  |                                 |           |                                 |  |          |         |            |  |            |           |          |  |   |           |          |  |   |         |  |  |   |           |  
|Income before income taxes                          |  |                                 | 247,732   |                                 |  |          | 79,973  |            |  |            | 327,705   |          |  |   | 566,139   |          |  |   | 86,041  |  |  |   | 652,180   |  
|Income taxes                                        |  |                                 | 94,199    |                                 |  |          | 30,398  |            |  |            | 124,597   |          |  |   | 215,420   |          |  |   | 32,875  |  |  |   | 248,295   |  
|                                                    |  |                                 |           |                                 |  |          |         |            |  |            |           |          |  |   |           |          |  |   |         |  |  |   |           |  
|Net income                                          |  | $                               | 153,533   |                                 |  | $        | 49,575  |            |  | $          | 203,108   |          |  | $ | 350,719   |          |  | $ | 53,166  |  |  | $ | 403,885   |  
|                                                    |  |                                 |           |                                 |  |          |         |            |  |            |           |          |  |   |           |          |  |   |         |  |  |   |           |  



|    |  | There have been no differences from the last annual report in the basis of
measuring segment profit or loss. There have been no material changes in
the amount of assets for any operating segment since the last annual
report.                                                                                                                                                                                                                                                                                                                                       
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(5) |  | Contingencies and Subsequent Event                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|    |  | On July 31, 2003, the Company declared a regular $0.15 per share cash
dividend on the Companys outstanding stock, payable on August 15, 2003, to
stockholders of record as of August 6, 2003.                                                                                                                                                                                                                                                                                                                                                                         
|   
|    |  | On June 4, 2003, the Company entered into an agreement with First Financial
Bank of Bessemer, Alabama to sell certain assets and certain related
liabilities of its Centreville, Alabama branch. The transaction is subject
to regulatory approvals and is expected to occur in September 2003. The
closing of the transaction is expected to result in an estimated pre-tax
gain of approximately $260,000. The transaction will include the sale of
approximately $8.7 million of deposits and approximately $6.2 million in
commercial, mortgage and consumer loans.

-9-



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##### 



Item 2: Managements Discussion and Analysis of Financial Condition and Results of Operations

REVIEW OF RESULTS OF OPERATIONS

Overview

Net income for the three months ended June 30, 2003 decreased $65,844, or
45.9%, and decreased for the nine months ended June 30, 2003 by $200,777, or
49.7%, compared to the same periods in fiscal 2002. Net interest income, after
the provision for loan losses for the three months ended June 30, 2003
decreased $424,770, or 31.6%, and decreased $446,573, or 14.3%, for the
nine-month period ended June 30, 2003 compared to the same periods in fiscal
2002. Non interest income increased $300,177, or 47.8%, for the three-month
period ended June 30, 2003, and increased $507,228, or 23.5%, for the
nine-month period ended June 30, 2003, when compared to the same periods in
fiscal 2002. Non-interest expense decreased $25,263, or 1.4%, for the
three-month period ended June 30, 2003 and increased $385,130, or 8.3%, for the
nine-month period ended June 30, 2003, compared to the same periods in fiscal
2002.

Primary earnings per common share, based on weighted average shares outstanding
was $.11 and $.18 for the three months ended June 30, 2003 and 2002,
respectively, and $.27 and $.49 for the nine months ended June 30, 2003 and
2002, respectively.

Those items significantly affecting net earnings are discussed in detail below.

Net Interest Income

Net interest income is the difference between the interest and fees earned on
loans, securities, and other interest-bearing assets (interest income) and the
interest paid on deposits and borrowed funds (interest expense). Net interest
income is directly related to the interest rate spread, which is the difference
between the interest rates on interest-earning assets and interest-bearing
liabilities.

As of June 30, 2003, the interest rate spread increased 10 basis points as
rates earned on interest-earning assets decreased 64 basis points to 5.89%
while the cost of funds decreased 74 basis points to 2.87% compared to the same
three-month period ending June 30, 2002. The decrease in rates paid and the
decrease in rates received during this three-month interval reflects the
downward trend in the repricing of higher yielding certificates of deposit, as
well as a downward trend of the overall interest rate environment. While the
cost of funds has been steadily decreasing over the past several months,
interest rates on consumer loans, construction loans and mortgages have also
decreased. The average balance of interest-earning assets decreased $3.2
million, or 2.5%, from $126.4 million to $123.2 million while the average
balance of interest-bearing liabilities decreased $2.2 million, or 1.8%, from
$122.8 million to $120.6 million. The combined effect of the decreases in
average balances and the changes in rates discussed above resulted in a
decrease in net interest income of approximately $6,920, or 0.7%, and an
increase in the interest rate spread from 2.92% to 3.02% for the three months
ended June 30, 2003, respectively, compared to the same period in 2002.

Provision for Loan Losses

The provision for loan losses reflects an expense in the amount of $118,451 for
the nine-month period ending June 30, 2003. This increase is the result of
additional reserves required to cover certain asset quality concerns within the
construction loan portfolio. The provision for 2002 reflects a benefit
resulting from the reclassification of a loan from loss to doubtful related
to a settlement agreement reached with a former director as previously
disclosed.

-10-



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##### 



Other Income

Total other income for the nine months ended June 30, 2003, increased
approximately $507,000 to $2,669,000 compared to $2,162,000 for the nine months
ended June 30, 2002. A portion of the increase in total non-interest income
was attributable to an increase of approximately $529,000 in gains on sales of
loans, an increase of approximately $72,000 in gains on sale of investment
securities available-for-sale, and an increase in service charges and other
fees of approximately $85,000 during the first nine months of fiscal 2003.
These increases are partially offset by a decrease in other income which is the
result of recording a one-time gain of approximately $197,000 between the cash
value of life insurance and the present value of benefits at retirement date on
deferred compensation agreements with certain key employees during March 2002.
Fee income generated from employee benefit trust and consulting remained
approximately the same at $870,000 between the two periods. The gain from the
sale of repossessed assets increased approximately $20,000 during the
nine-month period ending June 30, 2003.

For the three-month period ended June 30, 2003, total non-interest income
increased by approximately $300,000 to $927,000, compared to the same period in
fiscal 2002. This increase was primarily the result of an increase of
approximately $208,000 in gains on sales of loans, an increase of approximately
$53,000 in service charges and other fees, an increase in fee income generated
from employee benefit trust and consulting of approximately $15,000 and an
increase in the gain from sale of repossessed assets of approximately $42,000.
These increases are partially offset by a decrease in other income of
approximately $29,000.

Other Expense

Total other expense for the nine months ended June 30, 2003, increased by
approximately $386,000 to $5,024,000 as compared to $4,638,000 for the nine
months ended June 30, 2002. The changes in other non-interest expense is
attributable to an increase in compensation and benefits of approximately
$497,000, and an increase in other occupancy expenses of approximately $34,000.
Increases also occurred in deposit insurance premiums, office supplies and
expenses, and other expenses of approximately $24,000, $27,000 and $67,000,
respectively. These increases in expenses are partially offset by a decrease
in data processing fees, goodwill amortization expenses and legal expenses of
$39,000, $40,000 and $183,000, respectively, as compared to the nine-month
period ending June 30, 2002.

For the three-month period ended June 30, 2003, total non-interest expense
decreased approximately $25,000 to $1,722,000 from $1,747,000 for the
three-month period ended June 30, 2002. This decrease resulted primarily from
a decrease in legal expenses of approximately $152,000, a decrease in data
processing fees of approximately $17,000, and a decrease in goodwill
amortization expenses of approximately $13,000. These decreases in expenses
are partially offset by increases in compensation and benefit expense, office
supplies and expenses, deposit insurance premiums and other expenses of
approximately $109,000, $10,000, $6,000 and $31,000, respectively.

Income Taxes

The Companys effective tax rate for the nine-month periods ended June 30, 2003
and 2002 was 38.0% and 38.1%, respectively, compared to the federal statutory
rate of 34.0%. SouthFirsts effective tax rate was higher than the statutory
rate due primarily to state income taxes. Income tax expense decreased
approximately $124,000, or 49.8%, to $124,000 for the nine months ended June
30, 2003, as compared to $248,000 for the nine months ended June 30, 2002, due
to the decrease in pre-tax earnings.

-11-



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##### 



REVIEW OF FINANCIAL CONDITION

Overview

Management continuously monitors the financial condition of SouthFirst in order
to protect depositors, increase retained earnings, and protect current and
future earnings.

Return on average stockholders equity is one way of assessing the return
SouthFirst has generated for its stockholders. The table below sets forth the
return on average stockholders equity and other performance ratios of
SouthFirst for the periods indicated.

|                                                          |  |                       |        |      |  |   |       |   
|--------------------------------------------------------- |  | --------------------- | ------ | ---- |  | - | ----- | --
|                                                          |  | At or for the three  
|                                                          |  | months ended June 30,
|                                                          |  |                      
|                                                          |  | 2003                  |        | 2002
|                                                          |  |                       |        |     
|Return on Assets                                          |  |                       | 0.22   | %    |  |   | 0.41  | % 
|Return on Equity                                          |  |                       | 2.48   | %    |  |   | 4.25  | % 
|Equity to Asset Ratio                                     |  |                       | 8.99   | %    |  |   | 9.54  | % 
|Interest Rate Spread                                      |  |                       | 3.02   | %    |  |   | 2.92  | % 
|Net interest margin                                       |  |                       | 3.08   | %    |  |   | 3.02  | % 
|Total Risk based capital                                  |  |                       | 15.90  | %    |  |   | 16.62 | % 
|Non-Performing Loans to Loans                             |  |                       | 0.49   | %    |  |   | 1.45  | % 
|Allowance for Loan Losses to Loans                        |  |                       | 1.00   | %    |  |   | 1.33  | % 
|Allowance for Loan Losses to average non-performing loans |  |                       | 205.20 | %    |  |   | 92.10 | % 
|Ratio of Net charge offs to average loans outstanding     |  |                       | 0.03   | %    |  |   | (0.29 | )%
|Book value per common share outstanding                   |  | $                     | 17.59  |      |  | $ | 16.87 |   

Significant factors affecting SouthFirsts financial condition during the three
months ended June 30, 2003 are detailed below:

Assets

Total assets decreased approximately $1,288,000, or 0.9%, from $141,615,000 at
September 30, 2002 to $140,327,000 at June 30, 2003. Net loans decreased
approximately $2,896,000, or 3.1%. This decrease occurred primarily in
residential construction loans, which is a result of the limitations placed on
construction lending by the Office of Thrift Supervision (OTS), as outlined in
the Supervisory Agreement entered into between OTS and the Bank as of March 22,
2002. Other significant changes in assets occurring included a decrease in
cash and amounts due from banks of approximately $1,099,000, and a decrease in
Federal Home Loan Bank stock of approximately $1,113,000. Investment
securities held for sale increased approximately $2,576,000, while loans held
for sale and foreclosed assets increased approximately $1,758,000 and $516,000,
respectively.

Liabilities

Total liabilities increased approximately $90,000, or .07%, from just over
$127,736,000 at September 30, 2002 to just under $127,827,000 at June 30, 2003.
Deposits increased approximately $3,767,000 during the period, which
represents an increase in certificates of deposit of approximately $0.5 million
and an increase in checking and other savings accounts of approximately $3.3
million. Borrowed funds decreased approximately $3,400,000, which represents
the repayment of short-term daily rate credit advances with the Federal Home
Loan Bank (FHLB) of $2.0 million, and the repayment of short-term reverse
repurchase agreements with Morgan Keegan and Company of approximately $2.5
million. The decrease in borrowed funds is partially offset by an increase in
the balance in an existing line of credit with First Commercial Bank of
approximately $1,100,000.

-12-



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##### 



Loan Quality

Key to long-term earnings growth is maintenance of a high-quality loan
portfolio. SouthFirsts directive in this regard is carried out through its
policies and procedures for review of loans. The goal and result of these
policies and procedures is to provide a sound basis for new credit extensions
and an early recognition of problem assets to allow the greatest flexibility in
their timely disposition.

At June 30, 2003, the allowance for loan losses was $947,637, compared to
$854,013 at September 30, 2002. This increase is due primarily to an
additional provision in the amount of $118,451. (See Allowance for Loan
Losses, above). Non-performing loans at June 30, 2003 were approximately
$462,000 as compared to approximately $764,000 at September 30, 2002. At June
30, 2003 and September 30, 2002, the allowance for loan losses represented
1.00% and 0.88% of average loan balances, respectively. The allowance for loan
losses is based upon managements continuing evaluation of the collectibility
of the loan portfolio under current economic conditions and includes analysis
of underlying collateral value and other factors, which could affect
collectibility. Management considers the allowance for loan losses to be
adequate based upon the evaluations of the averages of specific loans, internal
loan rating systems, and guidelines provided by the banking regulatory
authorities governing First Federal.

Liquidity and Funding Sources

The Asset and Liability Committee of First Federals board of directors
monitors and manages the liquidity needs of the Company to ensure that there is
sufficient cash flow to satisfy demand for credit and deposit withdrawals, to
fund operations and to meet other Company obligations and commitments on a
timely and cost effective basis. Under current regulations, First Federal is
required to maintain sufficient liquidity to assure its safe and sound
operation. The requirement to maintain a specific minimum amount of liquid
assets, established by previous regulation, has been eliminated. Presently,
there is no specific standard or guideline regarding the application of the
current regulatory requirement.

Under the previous regulation, First Federal was required to maintain an
average daily balance of liquid assets, in each calendar quarter, of not less
than 4% of (i) the amount of its liquidity base at the end of the preceding
calendar quarter, or (ii) the average daily balance of its liquidity base
during the preceding quarter. For purposes of this computation, liquid assets
included specified short-term assets (e.g., cash, certain time deposits,
certain bankers acceptances and short-term U.S. Government, state or federal
agency obligations), and long-term assets (e.g., U.S. Government obligations of
more than one and less than five years and state agency obligations maturing in
two years or less).

As of June 30, 2003, First Federals average daily balance of liquid assets was
approximately 28% of its March 31, 2003 liquidity base, far exceeding the 4%
requirement set by the previous regulation. These liquid assets included
approximately $6,513,000 in cash and cash equivalents, and approximately
$27,810,000 in other qualifying assets. In addition, as of June 30, 2003, the
fair market value of the companys investment securities portfolio, which is
held for sale, was $29,344,000. The Company uses its investment securities
portfolio to manage liquidity and interest rate risk, whereby liquidity is
available through those securities that are not pledged. Further, cash flows
from operations, resulting primarily from net income adjusted for certain items
such as interest expense and provision for loan loss, are an additional source
of liquidity for the Company.

With respect to current funding sources, deposits provide a significant portion
of the Companys cash flow needs and continue to provide a relatively stable,
low cost source of funds. As of June 30, 2003, the amount of deposits was
$100,250,000, which represents an increase of 3,767,000 from the amount of
deposits at September 30, 2002.

-13-



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##### 



Other sources of funding used by the Company include commercial lines of
credit, and advances from the Federal Home Loan Bank of Atlanta (the FHLBA).
As of June 30, 2003, the Company had a line of credit, based on prime, with
First Commercial Bank in the amount of $2,500,000, which presently is scheduled
to mature on June 1, 2004, and of which there is an outstanding balance at June
30, 2003 of approximately $1,818,000. At June 30, 2003, the Company had
outstanding balances with the FHLBA of approximately $22,340,000 in the
aggregate.

First Federal also has short-term borrowings through reverse repurchase
agreements with Morgan Keegan & Co. As of June 30, 2003, the balance
outstanding was $1,500,000.

Management believes that the Companys significant liquidity and existing
funding sources are more than adequate to ensure sufficient cash flow to
satisfy demand for credit and any deposit withdrawals, to fund operations, and,
otherwise, to meet other Company obligations and commitments on a timely and
cost-effective basis.

Capital Adequacy and Resources

Management is committed to maintaining First Federals capital at a level that
would be sufficient to protect depositors, provide for reasonable growth, and
comply fully with all regulatory requirements. Managements strategy to meet
this commitment is to retain sufficient earnings while providing a reasonable
return on equity.

The Office of Thrift Supervision has issued guidelines identifying minimum
regulatory tangible capital equal to 1.50% of adjusted total assets, a
minimum core capital of 4.0% of adjusted total assets, and a minimum risk-based
capital of 8.0% of risk-weighted assets. First Federal has satisfied its
capital requirements primarily through the retention of earnings.

As of June 30, 2003, First Federal has satisfied all regulatory capital
requirements. First Federals compliance with the current standards is as
follows:

|                   |  |        |            |            |  |            |       |  
|------------------ |  | ------ | ---------- | ---------- |  | ---------- | ----- | -
|                   |  |        |            |            |  | Percent of
|                   |  | Amount |            | Asset Base
|                   |  |        |            |           
|Tangible capital   |  | $      | 13,335,000 |            |  |            | 9.60  | %
|Core capital       |  |        | 13,335,000 |            |  |            | 9.60  | %
|Tier-based capital |  |        | 13,966,000 |            |  |            | 15.90 | %

Cautionary Statement Concerning Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-QSB contain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, which statements generally can be identified by
the use of forward-looking terminology, such as may, will, expect,
estimate, anticipate, believe, target, plan, project, or continue
or the negatives thereof or other variations thereon or similar terminology,
and are made on the basis of managements plans and current analyses of the
Company, its business and the industry as a whole. These forward-looking
statements are subject to risks and uncertainties, including, but not limited
to, economic conditions, competition, interest rate sensitivity and exposure to
regulatory and legislative changes. The above factors, in some cases, have
affected, and in the future could affect, the Companys financial performance
and could cause actual results to differ materially from those expressed or
implied in such forward-looking statements. The Company does not undertake to
publicly update or revise its forward-looking statements even if experience or
future changes make it clear that any projected results expressed or implied
therein will not be realized.

-14-



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##### 



Item 3: Controls and Procedures

The Companys management, with the participation of the Companys Chief
Executive Officer and Controller (principal financial officer) evaluated the
effectiveness of the design and operation of the Companys disclosure controls
and procedures (as such term is defined in Rule 13a-14(c) and 15d-14(c) of the
Securities Exchange Act of 1934, as amended (the Exchange Act) as of the end
of the period covered by this report). Based on such evaluation, the Companys
Chief Executive Officer and Controller have concluded that , as of the end of
such period, the Companys disclosure controls and procedures are effective.

There have not been any significant changes in the Companys internal control
over financial reporting (as such term is defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) during the fiscal quarter to which this
report relates that have materially affected, or are reasonably likely to
materially affect, the Companys internal control over financial reporting.

-15-



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##### 



SOUTHFIRST BANCSHARES, INC.
AND SUBSIDIARIES

PART II. OTHER INFORMATION

Item 1: Legal Proceedings

In the normal course of business, SouthFirst and First Federal from time to
time are involved in legal proceedings. Management believes that there are no
pending or threatened legal proceedings which, upon resolution, are expected to
have a material effect upon SouthFirsts or First Federals financial
condition.

Item 6: Exhibits and Reports on Form 8-K

(a)  Exhibits. The Following Exhibits are filed with this report.

|               |  |                                                                                                                                                                                                             |  |  |  | 
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
|Exhibit Number |  | Description                                                                                                                                                                                                
|               |  |                                                                                                                                                                                                            
|31.1           |  | Certificate of the Chief Executive Officer pursuant to Rule
13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002, dated August 13, 2003.                      
|               |  |                                                                                                                                                                                                             |  |  |  | 
|31.2           |  | Certificate of the Chief Financial Officer pursuant to Rule
13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002, dated August 13, 2003.                      
|               |  |                                                                                                                                                                                                             |  |  |  | 
|32.1           |  | Certificate of the Chief Executive Officer and the Chief
Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated
August 13, 2003.

The certificate listed as Exhibit 32.1 is being furnished pursuant to
interim guidance issued by the Securities and Exchange Commission in Release
No. 33-8212 and shall not be deemed filed for the purposes of Section 18 of
the Securities and Exchange Act of 1934 (the Exchange Act), or otherwise
subject to the liability of such section, nor shall such certificates be deemed
incorporated by reference in any filing under the Securities Act of 1933 or the
Exchange Act, regardless of the general incorporation language of such filings,
except as shall be expressly set forth by specific reference in such filing.

SIGNATURES

Pursuant to the requirements 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.

|                      |  |                                                       
|--------------------- |  | ------------------------------------------------------
|                      |  | SOUTHFIRST BANCSHARES, INC                            
|                      |  |                                                       
|Date: August 13, 2003 |  | By: /s/ Joe K. McArthur                               
|                      |  |                                                       
|                      |  | Joe K. McArthur, President and
Chief Executive Officer
|                      |  | (principal executive officer)                         
|                      |  |                                                       
|Date: August 13, 2003 |  | By: /s/ Janice Browning                               
|                      |  |                                                       
|                      |  | Janice Browning                                       
|                      |  | Controller and Treasurer                              
|                      |  | (principal accounting officer)                        

-16-



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##### 



Exhibit Index

|            |  |                                                                                                                                                                                                             |  |  |  | 
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | 
|Exhibit No. |  | Description of Exhibit                                                                                                                                                                                     
|            |  |                                                                                                                                                                                                            
|31.1        |  | Certificate of the Chief Executive Officer pursuant to Rule
13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002, dated August 13, 2003.                      
|            |  |                                                                                                                                                                                                             |  |  |  | 
|31.2        |  | Certificate of the Chief Financial Officer pursuant to Rule
13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002, dated August 13, 2003.                      
|            |  |                                                                                                                                                                                                             |  |  |  | 
|32.1        |  | Certificate of the Chief Executive Officer and the Chief
Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated
August 13, 2003.

-17-