United States
                       Securities and Exchange Commission
                             Washington, D. C. 20549


                                   FORM 10-QSB


(Mark One)

[X]  Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act
     of 1934 For the Period Ended September 30, 1996
                                       or

[ ] Transition Report Under Section 13 or 15(d ) of the Securities Exchange Act
    of 1934 For the Transition Period Ended From                    to
                                ----------------

                         Commission file number 0-26174

                             FIRST BANKSHARES, INC.
             (Exact name of registrant as specified in its charter)

          Georgia                                                58-2094754
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                             Identification No.)

         2833 Main St.
         East Point, Georgia                                        30344
  (Address of principal executive offices)                        (Zip Code)

                                 (404) 768-9305
              (Registrant's telephone number, including area code)

                                 Not applicable
   (Former name, former address and 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  periods  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No

                Applicable Only to Issuers Involved in Bankruptcy
                   Proceedings During the Preceding Five Years

     Indicate by check mark whether the  registrant  has filed all documents and
reports  required  to be filed by  Sections  12, 13, or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by the court. Yes X No

                      Applicable Only to Corporate Issuers

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practical date:

Common Stock, $1.00 Par Value 1,052,462 shares as of October 25, 1996.


<PAGE>


      
                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements



                      FIRST BANKSHARES, INC. AND SUBSIDIARY
                      Condensed Consolidated Balance Sheets


<TABLE>
<CAPTION>
                                                                        September 30,            December 31,
                                                                            1996                     1995
                                                                       -------------           -------------
                                                                         (Unaudited)                (Note)
                            ASSETS
<S>                                                                    <C>                     <C>   
Cash and due from banks                                                $   2,588,395           $   3,403,926
Investment securities                                                     21,402,672              23,966,501
Federal funds sold                                                         3,520,000                      --
Loans, net                                                                72,970,336              58,090,869
Premises and equipment, net                                                1,812,343               1,828,648
Real estate acquired through foreclosure, net                                606,000                 808,090
Cash value of life insurance                                               2,333,262               2,266,781
Other assets                                                                 524,807               1,886,208
                                                                       -------------           -------------

                                                                        $105,757,815           $  92,251,023
                                                                        ============           =============


             LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
   Deposits                                                            $  83,405,973           $  78,733,938
   Federal funds purchased                                                 4,000,000               2,360,000
   Notes payable to FHLB and banks                                         8,300,000               2,000,000
   Other liabilities                                                       1,332,088               1,249,562
                                                                       -------------           -------------

   Total Liabilities                                                      97,038,061              84,343,500

Stockholders' Equity:
   Common stock, $1.00 par value;
     10,00,000 shares authorized; 1,048,840
     shares issued and outstanding                                         1,048,840               1,048,840
   Additional paid-in capital                                              4,198,435               4,198,435
   Retained earnings                                                       3,566,520               2,397,106
   Net unrealized gains (losses) on securities                               (94,041)                263,142
                                                                       --------------          -------------
   Total Stockholders' Equity                                              8,719,754               7,907,523
                                                                       -------------           -------------

                                                                       $ 105,757,815           $  92,251,023
                                                                       =============           =============

Note:  The balance  sheet at December 31, 1995 has been derived from the audited
financial  statements at that date but does not include all the  information and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements.

The  accompanying  note is an integral part of the condensed  consolidated
financial statements.
<PAGE>


                      FIRST BANKSHARES, INC. AND SUBSIDIARY
                 Condensed Consolidated Statements of Operations
                                   (Unaudited)


<CAPTION>
                                                     Three Months Ended                Nine Months Ended
                                                        September 30,                   September 30,
                                                 --------------------------       --------------------------
                                                    1996            1995             1996            1995
                                                 -----------    -----------       -----------    -----------
<S>                                              <C>            <C>               <C>            <C>    
Interest income:
   Loans, including fees                         $ 1,862,761    $ 1,206,298       $ 5,105,096    $ 3,438,613
   Investment securities                             339,299        298,329         1,027,189        800,543
   Other                                              21,688         54,220            57,211        167,799
                                                 -----------    -----------      ------------    -----------
   Total interest income                           2,223,748      1,558,847         6,189,496      4,406,955

Interest expense:
   Deposits                                          671,902        646,123         2,018,911      1,769,108
   Federal funds purchased and note payable           66,732          3,087           217,214          6,906
                                                 -----------    -----------      ------------    -----------
   Total interest expense                            738,634        649,210         2,236,125      1,776,014
                                                 -----------    -----------      ------------    -----------

   Net interest income                             1,485,114        909,637         3,953,371      2,630,941

Provision for possible loan losses                    50,000          5,000            50,000         25,000
                                                 -----------    -----------      ------------    -----------

   Net interest income after provision
     for possible loan losses                      1,435,114        904,637         3,903,371      2,605,941

Noninterest income                                   670,902        190,973         1,523,588        711,692

Noninterest expenses:
   Salaries and employee benefits                    645,499        377,412         1,777,424      1,093,900
   Occupancy and equipment                           100,796         58,335           294,659        175,092
   Other operating                                   506,053        262,132         1,278,853        936,849
                                                 -----------    -----------      ------------    -----------
   Total noninterest expenses                      1,252,348        697,879         3,350,936      2,205,841
                                                 -----------    -----------      ------------    -----------

   Income before income taxes                        853,668        397,731         2,076,023      1,111,792

Income taxes                                         320,497        141,847           765,800        361,492
                                                 -----------    -----------      ------------    -----------

   Net income                                    $   533,171    $   255,884      $  1,310,223    $   750,300
                                                 ===========    ===========      ============    ===========

   Net income per share:
     Primary                                     $       .51    $       .24      $       1.25    $       .72
                                                 ===========    ===========      ============    ===========
     Fully diluted                               $       .49    $       .24      $       1.20    $       .72
                                                 ===========    ===========      ============    ===========

   Weighted average common shares:
     Primary                                       1,048,840      1,048,840         1,048,840      1,048,840
     Fully diluted                                 1,094,000      1,048,840         1,094,000      1,048,840


The  accompanying  note is an integral part of the condensed  consolidated
financial statements.
<PAGE>


                      FIRST BANKSHARES, INC. AND SUBSIDIARY
                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)

<CAPTION>
                                                                           Nine Months Ended September 30,
                                                                       -------------------------------------
                                                                           1996                    1995
                                                                       -------------           -------------
<S>                                                                    <C>                     <C>          
Cash flows provided by operating activities                            $   2,666,254           $     802,290

Cash flows (used in) provided by investing activities                    (16,093,820)            (14,282,162)

Cash flows provided by (used in) financing activities                     12,612,035              12,698,725
                                                                       -------------           -------------


   Net increase (decrease) in cash and cash equivalents                     (815,531)               (781,147)

Cash and cash equivalents at beginning of period                           3,403,926               3,367,514
                                                                       -------------           -------------

Cash and cash equivalents at end of period                             $   2,588,395           $   2,586,367
                                                                       =============           =============

The  accompanying  note is an integral part of the condensed  consolidated
financial statements.
<PAGE>



                      FIRST BANKSHARES, INC. AND SUBSIDIARY
              Notes to Condensed Consolidated Financial Statements
                               September 30, 1996
                                   (Unaudited)


Basis  of  Presentation  The  accompanying   unaudited  condensed   consolidated
financial statements of First Bankshares, Inc. and Subsidiary (the Company) have
been prepared in accordance with generally  accepted  accounting  principles for
interim  financial  information  and with the  instructions  to Form  10-QSB and
Regulation  S-B.  Accordingly,  they  do not  include  all the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
consolidated financial statements. In the opinion of management, all adjustments
(consisting  of  normal  recurring  items)  considered   necessary  for  a  fair
presentation have been included.  Operating results for the three and nine month
periods ended September 30, 1996 are not  necessarily  indicative of the results
that  may be  expected  for the  year  ended  December  31,  1996.  For  further
information,  refer to the audited  consolidated  financial statements and notes
thereto  included in the Company's  Form 10-KSB for the year ended  December 31,
1995.


<PAGE>


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

Results of Operations
Net interest income  increased to $1,485,114 for the quarter ended September 30,
1996 from  $909,637 for the quarter  ended  September 30, 1995 and to $3,953,371
for the nine month period ended  September 30, 1996 from $2,630,941 for the nine
month  period ended  September  30, 1995.  The  increase  was  primarily  due to
increases in loan  volumes and other  interest  bearing  assets and the relative
market  interest  rates and fees  which  exceed  the  related  cost of funds for
investing in such assets.  Total interest income increased to $2,223,748 for the
quarter ended September 30, 1996 from $1,558,847 for the quarter ended September
30, 1995 and to  $6,189,496  for the nine month period ended  September 30, 1996
from $4,406,955 for the nine month period ended September 30, 1995. The increase
in  interest  income  was  primarily  the  result of  increases  in the net loan
portfolio of 64% from  $44,604,944  to  $72,970,336  from  September 30, 1995 to
September 30, 1996. Total interest expense increased to $738,634 for the quarter
ended  September 30, 1996 from $649,210 for the quarter ended September 30, 1995
and to  $2,236,125  for the nine month  period  ended  September  30,  1996 from
$1,776,014  for the nine month period ended  September 30, 1995. The increase in
interest  expense was primarily due to increases in interest bearing deposits of
9% from  $56,680,875  to  $61,986,342  and in other  borrowings  of 100% from no
borrowings to $12,300,000 from September 30, 1995 to September 30, 1996.

Additions to the allowance for possible loan losses  (Balance of $1,100,984  and
$920,977 at September 30 1996 and 1995, respectively, and $1,026,830 at December
31,  1995) are made  periodically  to maintain the  allowance at an  appropriate
level based on  management's  analysis of potential risk in the loan  portfolio.
The  ratio  of the  allowance  for  possible  loan  losses  to loans of 1.48% at
September 30, 1996  decreased from the 1.73% at December 31, 1995 as a result of
the  increase  in the  mortgage  loans  base of total  loans  outstanding.  Such
mortgage  loans  outstanding at September 30, 1996 carry reduced loss risk since
the Bank  generally  sells these loans in a short period of time.  The amount of
the  provision  for possible  loan losses is  determined by an evaluation of the
amount of loans outstanding, the amount of non-performing loans, historical loan
loss experience,  delinquency  trends,  the amount of losses actually charged to
the  allowance in a given period,  and an assessment of present and  anticipated
economic conditions that might possibly impact the Company's market.  Management
determined  that an  additional  provision  of  $50,000  was  necessary  for the
allowance  for the  quarter  and nine month  period  ended  September  30,  1996
compared to a provision of $5,000 for the quarter ended September 30, 1995 and a
provision  of $25,000  for the nine  month  period  ended  September  30,  1995.
However,  management's  judgment  is based  upon a number of  assumptions  about
future  events,  which are believed to be  reasonable,  but which may or may not
prove valid.  Thus, there can be no assurance that charge-offs in future periods
will not  exceed  the  allowance  for  possible  loan  losses,  that  additional
increases in the allowance will not be required, or that any particular level of
allowance for possible loan losses will be maintained.

Noninterest  income  increased to $670,902 for the quarter  ended  September 30,
1996 from  $190,973 for the quarter  ended  September 30, 1995 and to $1,523,588
for the nine month period ended  September  30, 1996 from  $711,692 for the nine
month period ended September 30, 1995. Such increases were largely  attributable
to gains on sales of loans in the Company's mortgage loan operations.

Noninterest  expense increased to $1,252,348 for the quarter ended September 30,
1996 from  $697,879 for the quarter  ended  September 30, 1995 and to $3,350,936
for the nine month period ended  September 30, 1996 from $2,205,841 for the nine
month period ended  September 30, 1995. The increases were primarily  related to
an increase in the number of full-time  employees,  particularly  related to the
increase  in the  mortgage  loan  operations  and normal  salary  increases,  in
addition to, the expansion of the mortgage operations into separate facilities.

The Company's net income  increased to $533,171  ($.49 per share fully  diluted)
for the quarter ended  September  30, 1996 from  $255,884  ($.24 per share fully
diluted) for the quarter ended  September 30, 1995 and to $1,310,223  ($1.20 per
share fully  diluted) for the nine month period  ended  September  30, 1996 from
$750,300  ($.72  per  share  fully  diluted)  for the nine  month  period  ended
September 30, 1995. The return on average assets and period end equity increased
to 1.83% from 1.45% and to 22.1% from  15.4%,  respectively,  for the nine month
period  ended  September  30,  1996 and 1995.  The  increases  in net income and
returns reflect the increase in net interest income,  the increase in investment
in earning assets in a relatively stable interest rate market, and the stability
of the Company's liquidity position.

Liquidity and Sources of Capital
The Company had cash and cash  equivalents  of $2,588,395 and federal funds sold
of $3,520,000 at September 30, 1996 and cash and cash  equivalents of $3,403,926
at December 31, 1995. The increase in liquidity  reflects the Company's strategy
of having funds  available  for increased  investment in earning  assets and the
relative  stability  of the  Company's  need to respond to short term demand for
funds caused by withdrawals from deposit accounts.  The loan to deposit ratio at
September 30, 1996 was 86.4% compared to 75.1% at December 31, 1995 and 63.2% at
September  30,  1995.  The  increase  in this ratio  continues  to  reflect  the
Company's strategy of increasing investments in higher earning loans and related
fee opportunities.

Primary sources of liquidity are the scheduled repayments on the Company's loans
and interest on and maturities of its investments. Occasionally, the Company may
sell  investment  securities in connection  with the  management of its interest
sensitivity  gap.  The  Company  may also  utilize  its cash and due from banks,
interest-earning  deposits  in  financial  institutions,   federal  funds  sold,
borrowings from FHLB and repurchase agreements to meet liquidity requirements as
needed.  The Company also has the ability,  on a short-term  basis,  to purchase
federal funds from other financial institutions. Presently, the Company has made
arrangements with commercial banks for short-term unsecured and secured advances
of up to  $12,250,000  and with the Federal Home Loan Bank for  borrowings up to
$5,170,000.  The Company  believes that its liquidity will be sufficient to meet
its operating requirements over the near term.


<PAGE>


                           PART II - OTHER INFORMATION



Item 1.  Legal Proceedings.

There are no material pending legal proceedings to which the Company or the Bank
is a party or of which any of their property is subject.

Item 2.  Changes in Securities.

         (a)      Not applicable.

         (b)      Not applicable.

Item 3.  Defaults Upon Senior Securities.

         (a)      Not applicable.

         (b)      Not applicable.

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

         None

Item 5.  Other Information.

         Not applicable.

Item 6.  Other Information.

         (a)      Exhibits.

                  None.

         (b)      Reports on Forms 8-K.

                  None


<PAGE>



                                   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.
                                                                   
                                                    FIRST BANKSHARES, INC.
                                                        (Registrant)



Date  November 1, 1996                             /s/ R. Elliott Miller
    ---------------------------              -------------------------------
                                                     R. Elliott Miller
                                          President and Chief Executive Officer

</TABLE>