<PAGE>
 
                                  EXHIBIT 10.5

                              EMPLOYMENT AGREEMENT
                                    BETWEEN
                     THE COMPANY AND E. GREY WINSTEAD, III
                            DATED SEPTEMBER 1, 1997
                                        


<PAGE>
 
                                 EMPLOYMENT AGREEMENT
                                 --------------------

     THIS AGREEMENT is made as of the 1st day of September, 1997, between
Greater Rome Bank (the "Bank"), a commercial bank and trust company chartered by
the State of Georgia, and Greater Rome Bancshares, Inc. (the "Company"), the
parent bank holding company of the Bank (the Bank and the Company collectively,
the "Employer"), and E. Grey Winstead, III, a resident of the State of Georgia
(the "Employee").

                                 RECITALS:


     The Employer desires to employ the Employee as the Chief Financial Officer
of the Employer and the Employee desires to accept such employment.

     In consideration of the above premises and the mutual agreements
hereinafter set forth, the parties hereby agree as follows:

1.    DEFINITIONS.  Whenever used in this Agreement, the following terms and
their variant forms shall have the meaning set forth below:

   1.1  "AGREEMENT" shall mean this Agreement and any exhibits incorporated
herein together with any amendments hereto made in the manner described in this
Agreement.

   1.2  "AFFILIATE" of a person or entity shall mean (a) any other person or
entity directly, or indirectly through one or more intermediaries, controlling,
controlled by, or under common control with such person or entity, and (b) any
officer, director, partner, employer, or direct or indirect beneficial owner of
10% or greater equity of voting interest of such person or entity.
 
   1.3  "AREA" shall mean the geographic area within the boundaries of Floyd
County.  It is the express intent of the parties that the Area as defined herein
is the area where the Employee performs or performed services on behalf of the
Employer under this Agreement as of, or within a reasonable time prior to, the
termination of the Employee's employment hereunder.

   1.4  "AVERAGE MONTHLY COMPENSATION" shall mean the quotient obtained by
dividing by twelve the highest annual compensation (i.e., salary and bonus) paid
to the Employee by the Employer for any preceding calendar year.

   1.5  "BUSINESS OF THE EMPLOYER" shall mean the business conducted by the
Employer, which is commercial banking.
 
   1.6  "CAUSE" shall mean:
 
      1.6.1  With respect to termination by the Employer:

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<PAGE>
 
         (a) A material breach of the terms of this Agreement by the Employee,
   including, without limitation, failure by the Employee to perform his duties
   and responsibilities in the manner and to the extent required under this
   Agreement or a breach of any representation or warranty of the Employee set
   forth herein which remains uncured after the expiration of thirty (30) days
   following the delivery of written notice of such breach to the Employee by
   the Employer;
 
         (b) Conduct by the Employee that amounts to fraud, dishonesty or
   willful misconduct in the performance of his duties and responsibilities
   hereunder;

         (c) The conviction of the Employee of a felony;
 
         (d) Conduct by the Employee that amounts to gross and willful
   insubordination or inattention to his duties and responsibilities hereunder
   which remains uncured after the expiration of thirty (30) days following the
   delivery of written notice of such breach to the Employee by the Employer; or
 
         (e) Conduct by the Employee that results in removal from his position
   as an officer or employee of the Employer pursuant to a written order by any
   regulatory agency with authority or jurisdiction over the Employer.
 
      1.6.2  With respect to termination by the Employee, a material diminution
   in the powers, responsibilities or duties of Employee hereunder, or the
   failure of the Board of Directors of the Bank and the Company to elect him as
   Chief Financial Officer, or a material breach of the terms of this Agreement
   by the Employer which remains uncured after the expiration of thirty (30)
   days following the delivery of written notice of such breach to the Employer
   by the Employee.
 
   1.7  "CHANGE IN CONTROL" of the Employer shall mean any consummated
transaction wherein twenty-five percent (25%) of the shares of the Bank or the
Company, are directly or indirectly transferred by sale, gift, merger, exchange
or any other means to new owners other than an Affiliate of such person or
entity transferring such shares or if a majority of the members of the Board of
Directors of the Bank or the Company are replaced within any twelve month
period.

   1.8  "COMPANY INFORMATION" means Confidential Information and Trade Secrets.

   1.9  "CONFIDENTIAL INFORMATION" means data and information relating to the
business of the Employer (which does not rise to the status of a Trade Secret)
which is or has been disclosed to Employee or of which Employee became aware as
a consequence of or through Employee's relationship to the Employer and which
has value to the Employer and is not generally known to its competitors.
Confidential Information shall not include any data or information that has been
voluntarily disclosed to the public by the Employer (except where such public

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<PAGE>
 
disclosure has been made by Employee without authorization) or that has been
independently developed and disclosed by others, or that otherwise enters the
public domain through lawful means.

   1.10  "INITIAL TERM" shall mean that period of time commencing on the date of
execution of this Agreement by the Employer and the Employee and running until
the earlier of three (3) years thereafter or any termination of employment of
the Employee under this Agreement as provided for in Section 3.
 
   1.11  "PERMANENT DISABILITY" shall mean a physical or mental condition that
prevents the performance of substantially all of the Employee's duties under
this Agreement for a period of ninety (90) consecutive days as certified by a
physician chosen by the Employer and reasonably acceptable to the Employee.

   1.12  "TERM" shall mean the Initial Term and all subsequent renewal periods.

   1.13  "TRADE SECRETS" means information including , but not limited to,
technical or nontechnical data, formulas, patterns, compilations, programs,
devices, methods, techniques, drawings, processes, financial data, financial
plans, product plans or lists of actual or potential customers or suppliers
which (1) derives economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other persons
who can obtain economic value from its disclosure or use; and (2) is the subject
of efforts that are reasonable under the circumstances to maintain its secrecy.
 
2.    DUTIES.
 
   2.1  The Employee is employed initially as the Chief Financial Officer of the
Employer and, subject to the direction of the President of the Employer shall
perform and discharge well and faithfully the duties which may be assigned to
him from time to time by the President in connection with the conduct of its
business.  The duties and responsibilities of the Employee are set forth on
Exhibit A attached hereto.
 
   2.2  In addition to the duties and responsibilities specifically assigned to
the Employee pursuant to Section 2.1 hereof, the Employee shall:  (1) devote
substantially all of his time, energy and skill during regular business hours to
the performance of the duties of his employment (reasonable vacations and
reasonable absences due to illness excepted) and faithfully and industriously
perform such duties; (2) diligently follow and implement all management policies
and decisions communicated to him by the President; and (3) timely prepare and
forward to the President all reports and accounting as may be requested of the
Employee.
 
   2.3  The Employee shall devote his entire business time, attention and
energies to the Business of the Employer and shall not during the term of this
Agreement be engaged (whether or not during normal business hours) in any other
business or professional activity, whether or not such activity is pursued for

                                       3
<PAGE>
 
gain, profit or other pecuniary advantage; but this shall not be construed as
preventing the Employee from (1) investing his personal assets in businesses
which (subject to clause (2) below) are not in competition with the Business of
the Employer and which will not require any services on the part of the Employee
in their operation or affairs and in which his participation is solely that of
an investor, (2) purchasing securities in any corporation whose securities are
regularly traded provided that such purchase shall not result in his
collectively owning beneficially at any time five percent (5%) or more of the
equity securities of any business in competition with the Business of the
Employer and (3) participating in civic and professional affairs and
organizations and conferences, preparing or publishing papers or books or
teaching so long as the President approves of such activities prior to the
Employee's engaging in them.  Prior to commencing any activity described in
clause (3) above, the Employee shall inform the President, in writing, of any
such activity.  Furthermore, this paragraph shall not be construed as preventing
the Employee from tending to the affairs of his family farm, from time to time,
provided such activities do not interfere with the performance of the Employee's
duties, as determined by the President.

3.      TERM AND TERMINATION.
 
   3.1  TERM.  This Agreement shall remain in effect for the Initial Term.  At
the end of the first twelve-month period hereunder and at the end of each
successive twelve-month period, this Agreement shall automatically be extended
for a successive twelve-month period following the then two-year remaining term
unless either party gives written notice to the other of its intent not to
extend this Agreement with such written notice to be given not less than ninety
(90) days prior to the end of such twelve-month period.  In the event such
notice of non-extension is properly given, this Agreement shall terminate at the
end of the remaining term then in effect.  However, notwithstanding the
provisions of this Section 3.1, after the last day of the month during which the
Employee attains age 65, the term of this Agreement will be for twelve months
and shall automatically be extended for a successive twelve-month period unless
either party gives written notice to the other of its intent not to extend this
Agreement with such written notice to be given not less than ninety (90) days
prior to the end of such twelve-month period.
 
   3.2  TERMINATION.  During the Term, the employment of the Employee under this
Agreement may be terminated only as follows:
 
      3.2.1  BY THE EMPLOYER:
 
         (a) For Cause, upon written notice to the Employee, in which event the
   Employer shall have no further obligation to the Employee except for the
   payment of any amounts due and owing under Section 4 on the effective date of
   termination; or
 
         (b) Without Cause at any time, provided that the Employer shall give
   the Employee thirty (30) days prior written notice of its intent to
   terminate, in which event the Employer shall be required to pay the Employee

                                       4
<PAGE>
 
   his Average Monthly Compensation on a monthly basis for a period of twelve
   (12) months following termination.
 
         (c) Upon the Permanent Disability of the Employee, provided that at
   least thirty (30) days prior written notice of the intent to terminate is
   provided, in which event the Employer shall pay the Employee an amount equal
   to his Average Monthly Compensation (or prorata portion thereof) for each
   month (or portion thereof) during the period beginning on the effective date
   of termination and continuing until the earlier of (i) the first anniversary
   of the effective date of termination; or (ii) the commencement of the period
   for which long-term disability benefits become payable to the Employee.

      3.2.2  BY THE EMPLOYEE:
 
         (a) For Cause, with no prior notice except as provided in Section 1.6,
   in which event the Employer shall be required to pay the Employee his Average
   Monthly Compensation on a monthly basis for a period of twelve (12) months
   following termination; or
 
         (b) Without Cause, provided that the Employee shall give the Company
   sixty (60) days prior written notice of his intent to terminate, in which
   event the Employer shall have no further obligation to the Employee except
   future payment of any amounts due and owing under Section 4 on the effective
   date of the termination.

         (c) Upon the Permanent Disability of Employee, provided that at least
   thirty (30) days prior written notice of the intent to terminate is provided,
   in which event the Employer shall pay the Employee an amount equal to his
   Average Monthly Compensation (or prorata portion thereof) for each month (or
   portion thereof) during the period beginning on the effective date of
   termination and continuing until the earlier of (i) the first anniversary of
   the effective date of termination; or (ii) the commencement of the period for
   which long-term disability benefits become payable to the Employee.

      3.2.3  By the Employee within six (6) months following a Change in Control
   of the Employer, provided that the Employee shall give written notice to the
   Employer of his intention to terminate this Agreement, in which event the
   Employer shall be required to pay the Employee his Average Monthly
   Compensation on a monthly basis for a period of twelve (12) months after
   termination.
 
      3.2.4  Upon termination as specified under paragraphs 3.2.1 (b), 3.2.2 (a)
   and 3.2.3, the Employer agrees to reimburse the Employee on a monthly basis
   for the out of pocket cost of an individual employee-only group medical
   insurance policy premiums from the date of termination until the earlier of
   (i) the Employee obtaining employment with a company providing group medical
   coverage, (ii) the Employee becoming eligible for Medicare, or (iii)  twelve
   (12) months from the date of termination.  Upon termination as specified in
   paragraphs 3.2.1 (c) and 3.2.2 (c), the Employer agrees to reimburse the
   Employee for the out of pocket cost of an individual employee-only group

                                       5
<PAGE>
 
   medical insurance policy premiums from the date of termination until the
   earlier of (i) the commencement of the period for which long-term disability
   benefits become payable to the Employee, (ii) the Employee becoming eligible
   for Medicare, or (iii) twelve (12) months from the date of termination.  The
   Employee shall provide the Employer with satisfactory evidence that he has
   incurred the cost, and the amount of any monthly reimbursement will not
   exceed the monthly cost of COBRA premiums then being charged by the Employer
   for employee-only coverage under its group health plan in effect for the
   Employer.

      3.2.5 At any time upon mutual, written agreement of the parties, in which
event the Employer shall have no further obligation to the Employee except for
the payment of any amounts due and owing under Section 4 on the effective date
of termination unless otherwise set forth in the written agreement.

      3.2.6 Notwithstanding anything in this Agreement to the contrary, the term
of employment shall end automatically upon the Employee's death, in which event
the Employer shall have no further obligation to the Employee except for the
payment of any amounts due and owing under Section 4 on the effective date of
termination.
 
   3.3    EFFECT OF TERMINATION.  Termination of the employment of the Employee
pursuant to Section 3.2 shall be without prejudice to any right or claim which
may have previously accrued to either the Employer or the Employee hereunder and
shall not terminate, alter, supersede or otherwise affect the terms and
covenants and the rights and duties prescribed in this Agreement.
 
4.    COMPENSATION.  The Employee shall receive the following salary and
      benefits:
 
   4.1    BASE SALARY.  During the Initial Term, the Employee shall be
compensated at a base rate of $75,000 per annum (the "Base Salary").  The
Employee's salary shall be reviewed by the Board annually, and the Employee
shall be considered annually for an increase in such amount, if any, as may be
determined by the Board.  Such salary shall be payable in accordance with the
Employer's normal payroll practices. Once the Bank becomes cumulatively
profitable, as defined in Exhibit B, the Employee's base rate of pay will be
adjusted in accordance with the provisions of Exhibit B.

   4.2    INCENTIVE COMPENSATION.  The Employee shall be entitled to participate
in such bonus, incentive and other executive compensation programs as are made
available to senior management of the Employer from time to time (the "Incentive
Compensation").  After the Bank is cumulatively profitable, the Employee will
earn Incentive Compensation which shall include the bonus described in
accordance with the terms specified in Exhibit B.

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<PAGE>
 
   4.3    BENEFITS.
 
         (a) In addition to the Base Salary and Incentive Compensation, the
   Employee shall be entitled to such benefits as may be available from time to
   time for executives of the Employer similarly situated to the Employee,
   including, but not limited to, long-term disability coverage so long as such
   coverage can be purchased at commercially reasonable rates, and further, by
   way of example only, profit sharing plans, retirement or investment funds,
   dental, health, life, and such other benefits as the employer deems
   appropriate.
 
      (b) The Employer specifically agrees to reimburse the Employee for
   reasonable business expenses incurred by him in performance of his duties
   hereunder, as approved from time to time by the President; provided that the
   Employee shall, as a condition of reimbursement, submit verification of the
   nature and amount of such expenses in accordance with reimbursement policies
   from time to time adopted by the Employer and in sufficient detail to comply
   with rules and regulations promulgated by the Internal Revenue Service.
 
         (c) On a non-cumulative basis the Employee shall be entitled to three
   (3) weeks of vacation in each year of this Agreement, during which his
   compensation shall be paid in full.

   4.4    WITHHOLDING.  The Employer may deduct from each payment of
compensation hereunder all amounts required to be deducted and withheld in
accordance with applicable federal and state income, FICA and other withholding
requirements.

5.    COMPANY INFORMATION.

   5.1    OWNERSHIP OF COMPANY INFORMATION.   All Company Information received
or developed by the Employee while employed by the Employer will remain the sole
and exclusive property of the Employer.

   5.2    OBLIGATIONS OF EMPLOYEE.  Employee agrees (1) to hold Company
Information in strictest confidence, and (2) not to use, duplicate, reproduce,
distribute, disclose or otherwise disseminate Company Information or any
physical embodiments thereof and may in no event take any action causing or fail
to take any action necessary in order to prevent any Company Information from
losing its character or ceasing to qualify as Confidential Information or a
Trade Secret.  In the event that Employee is required by law to disclose any
Company Information, Employee will not make such disclosure unless (and then
only to the extent that) Employee has been advised by independent legal counsel
that such disclosure is required by law and then only after prior written notice
is given to the Company when Employee becomes aware that such disclosure has
been requested and is required by law.  This Section 5 shall survive for a
period of two (2) years following termination of this Agreement with  respect to
Confidential Information, and shall survive termination of this Agreement for so
long as is permitted by the then-current Georgia Trade Secrets Act of 1990,
O.C.G.A. subsection 10-1-760-10-1-767, with respect to Trade Secrets.

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<PAGE>
 
   5.3    DELIVERY UPON REQUEST OR TERMINATION.  Upon request by the Employer,
and in any event upon termination of his employment with the Employer, the
Employee will promptly deliver to the Employer all property belonging to the
Employer, including without limitation all Company Information then in his
possession or control.

6.    NON-COMPETITION.  The Employee agrees that during his employment by the
Employer hereunder and, in the event of his termination other than by the
Employer without Cause pursuant to Section 3.2.1(b) or by the Employee for Cause
pursuant to Section 3.2.2(a), for a period of six (6) months thereafter, he will
not (except on behalf of or with the prior written consent of the Employer),
within the Area, either directly or indirectly, on his own behalf or in the
service or on behalf of others, as a principal, partner, officer, director,
manager, supervisor, administrator, consultant, executive employee or in any
other capacity which involves duties and responsibilities similar to those
undertaken for the Employer, engage in any business which is the same as or
essentially the same as the Business of the Employer.

7.    NON-SOLICITATION OF CUSTOMERS.  The Employee agrees that during his
employment by the Employer hereunder and, in the event of his termination other
than by the Employer without Cause pursuant to Section 3.2.1(b) or by the
Employee for Cause pursuant to Section 3.2.2(a), for a period of six (6) months
thereafter, he will not (except on behalf of or with the prior written consent
of the Employer), within the Area, on his own behalf or in the service or on
behalf of others, solicit, divert or appropriate or attempt to solicit, divert
or appropriate, directly or by assisting others, any business from any of the
Employer's customers, including actively sought prospective customers, with whom
the Employee has or had material contact during the last two (2) years of his
employment, for purposes of providing products or services that are competitive
with those provided by the Employer.

8.    NON-SOLICITATION OF EMPLOYEES.  The Employee agrees that during his
employment by the Employer hereunder and, in the event of his termination other
than by the Employer without Cause pursuant to Section 3.2.1(b) or by the
Employee for Cause pursuant to Section 3.2.2(a), for a period of six (6) months
thereafter, he will not, on his own behalf or in the service or on behalf of
others, solicit, recruit or hire away or attempt to solicit, recruit or hire
away, directly or by assisting others, any employee of the Employer or its
Affiliates, whether or not such employee is a full-time employee or a temporary
employee of the Employer or its Affiliates and whether or not such employment is
pursuant to written agreement and whether or not such employment is for a
determined period or is at will.

9.    REMEDIES.  The Employee agrees that the covenants contained in Sections 5
through 8 of this Agreement are of the essence of this Agreement; that each of
the covenants is reasonable and necessary to protect the business, interests and
properties of the Employer; and that irreparable loss and damage will be
suffered by the Employer should he breach any of the covenants.  Therefore, the
Employee agrees and consents that, in addition to all the remedies provided by
law or in equity, the Employer shall be entitled to a temporary restraining
order and temporary and permanent injunctions to prevent a breach or
contemplated breach of any of the covenants.  The Employer and the Employee

                                       8
<PAGE>
 
agree that all remedies available to the Employer or the Employee, as
applicable, shall be cumulative.

10.   SEVERABILITY.  The parties agree that each of the provisions included in
this Agreement is separate, distinct and severable from the other provisions of
this Agreement and that the invalidity or unenforceability of any Agreement
provision shall not affect the validity or enforceability of any other provision
of this Agreement.  Further, if any provision of this Agreement is ruled invalid
or unenforceable by a court of competent jurisdiction because of a conflict
between the provision and any applicable law or public policy, the provision
shall be redrawn to make the provision consistent with and valid and enforceable
under the law or public policy.

11.   NO SET-OFF BY EMPLOYEE.  The existence of any claim, demand, action or
cause of action by the Employee against the Employer, or any Affiliate of the
Employer, whether predicated upon this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Employer of any of its rights
hereunder.

12.   NOTICE.  All notices and other communications required or permitted under
this Agreement shall be in writing and, if mailed by prepaid first-class mail or
certified mail, return receipt requested, shall be deemed to have been received
on the earlier of the date shown on the receipt or three (3) business days after
the postmarked date thereof.  In addition, notices hereunder may be delivered by
hand, facsimile transmission or overnight courier, in which event the notice
shall be deemed effective when delivered or transmitted.  All notices and other
communications under this Agreement shall be given to the parties hereto at the
following addresses:

      (i)  If to the Employer, to it at:

           Greater Rome Bank
           1490 Martha Berry Blvd.
           Rome, GA  30165

      (ii) If to the Employee, to him at:

           E. Grey Winstead, III
           Route 3, Box 226
           Summerville, GA  30747

13.   ASSIGNMENT.  Neither party hereto may assign or delegate this Agreement or
any of its rights and obligations hereunder without the written consent of the
other party hereto.

14.   WAIVER.  A waiver by the Employer of any breach of this Agreement by the
Employee shall not be effective unless in writing, and no waiver shall operate
or be construed as a waiver of the same or another breach on a subsequent
occasion.

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<PAGE>
 
15.   APPLICABLE LAW.  This Agreement shall be construed and enforced under and
in accordance with the laws of the State of Georgia.

16.   INTERPRETATION.  Words importing any gender include all genders.  Words
importing the singular form shall include the plural and vice versa.  The terms
"herein", "hereunder", "hereby", "hereto", "hereof" and any similar terms refer
to this Agreement.  Any captions, titles or headings preceding the text of any
article, section or subsection herein are solely for convenience of reference
and shall not constitute part of this Agreement or affect its meaning,
construction or effect.

17.   ENTIRE AGREEMENT.  This Agreement embodies the entire and final agreement
of the parties on the subject matter stated in the Agreement.  No amendment or
modification of this Agreement shall be valid or binding upon the Employer or
the Employee unless made in writing and signed by both parties.  All prior
understandings and agreements relating to the subject matter of this Agreement
are hereby expressly terminated.

18.   RIGHTS OF THIRD PARTIES.  Nothing herein expressed is intended to or shall
be construed to confer upon or give to any person, firm or other entity, other
than the parties hereto and their permitted assigns, any rights or remedies
under or by reason of this Agreement.

19.   SURVIVAL.  The obligations of the Employee pursuant to Sections 5, 6, 7, 8
and 9 shall survive the termination of the employment of the Employee hereunder.

20.   JOINT AND SEVERAL.  The obligations of the Bank and the Company to
Employee hereunder shall be joint and several.

   IN WITNESS WHEREOF, the Employer and the Employee have executed and delivered
this Agreement as of the date first shown above.

THE EMPLOYER:

Greater Rome Bank                                Greater Rome Bancshares, Inc.
 
By:  /s/ Thomas D. Caldwell, III                 By:  /s/ Bradford L. Riddle
    ----------------------------                     ---------------------------
 
Name:  Thomas D. Caldwell, III                   Name:   Bradford L. Riddle
Title: President                                 Title:  Vice Chairman


THE EMPLOYEE:   /s/ E. Grey Winstead, III
                -------------------------
                E. GREY WINSTEAD, III

                                       10
<PAGE>
 
                                   EXHIBIT A

                        INITIAL DUTIES OF THE EMPLOYEE

The initial duties of the Employee shall include, in addition to any other
duties assigned the Employee by the President of the Bank or the Company or
their respective designees, the following:

      .  General supervision and management of the Company's and Bank's
         financial plans and policies, including asset and liability management,
         liquidity and funds management, investment management and capital
         planning including the planning, controlling and directing of the
         accounting systems and financial and regulatory reporting systems.

      .  Work with the President to develop a long-term strategy for the Company
         that creates shareholder value.

      .  Develop and recommend to the President annual business plans and
         budgets that support the Company's long-term strategy.

      .  Perform the duties of Corporate Secretary for the Bank and Company and
         maintain the minutes of all Board and Asset/Liability Committee,
         Investment Committee and Audit Committee Meetings.

      .  Use best efforts to achieve the Company's financial and operating goals
         and objectives.

      .  Fulfill the duties of the Bank's Internal Audit Officer, including
         negotiation, management and coordination of contract internal audit
         services, independent audit services and coordination of regulatory
         safety and soundness exams.

      .  Fulfill the duties of the Bank's human resource officer, including
         personnel and payroll administration, group insurance benefit
         administration, 401K plan administration, and section 125 plan
         administration.

      .  Fulfill the duties of the Bank's senior operations officer including
         planning, supervision and management of the data processing function,
         item processing function, local area network administration and related
         disaster recovery planning and control.

      .  Oversee deposit operations, deposit product development and pricing,
         customer service and teller operations.

      .  Implement major corporate policies.
<PAGE>
 
                                   EXHIBIT B
                                        
                                 COMPENSATION

BASE SALARY. Upon achieving cumulative profitability at the Bank, the Employee's
Base Salary shall be increased above the base rate specified in the Initial Term
of this Agreement by  no less than 10%. If such increase has not already
occurred through routine salary review adjustments, it will occur at the
beginning of the first calendar quarter following the calendar quarter in which
retained earnings of the Bank become positive, as reflected in the Bank's
quarterly call reports prepared in accordance with the requirements of the
Federal Financial Institutions Examination Council.

INCENTIVE COMPENSATION.   Until the Bank is cumulatively profitable, no
incentive bonuses may be paid. After cumulative profitability has occurred, as
defined above, the employee will receive a one-time bonus of $37,000.  This
bonus is payable no later than the time of the base rate adjustment specified
above, only after it is fully accrued in the determination of cumulative
profitability.

At the end of each fiscal year thereafter, an incentive bonus will be paid to
the Employee based upon the following qualitative and quantitative criteria.
The qualitative criteria are measured by the Bank's most recent regulatory
CAMELS rating.  The quantitative criteria are measured by the Bank's Return on
Average Assets ("ROAA") until the Company's Tier One Leverage Ratio (as defined
by the FDIC's risk based capital guidelines) is less than eight percent or
January 1, 2001, whichever occurs first.  After such time, the quantitative
criteria will be measured by the Company's Return on Beginning of the Year
Equity ("ROE"). The amount of the Employee's bonus will be determined by adding
the percentages associated with the overall CAMELS rating and the percentages
associated with the ROAA (ROE, when appropriate) categories in the following
tables and applying the limits as stated below:

<TABLE>
<CAPTION>
        Qualitative Criteria                               Quantitative Criteria 

       CAMELS             % of                                     % of                                   % of
       Rating           Base Pay            ROAA                 Base Pay              ROE               Base Pay
<S>                   <C>              <C>                        <C>           <C>                      <C>
          1              25.0         = greater than 2.0%        30.0          = greater than 20.0%       30.0
          2              20.0           = 1.75 - 2.00%           17.0             = 17.5 - 20.0%          17.0
Less than 2               0.0           = 1.50 - 1.75%           10.0             = 15.0 - 17.5%          10.0
                                        = 1.25 - 1.50%            6.0             = 12.5 - 15.0%           6.0
                                        = 1.00 - 1.25%            3.5             = 10.0 - 12.5%           3.5
                                        = 0.75 - 1.00%            2.0            Less than 10.0%           0.0
                                        = 0.50 - 0.75%            1.0
                                       Less than 0.50%            0.0
</TABLE>

ROAA and ROE are calculated using audited financial statements after eliminating
the effect of incentive bonus accruals contemplated under all executive
employment agreements.  For ROAA and ROE results which occur within a range
specified above, the Percent of Base Pay will be calculated using straight line
interpolation (e.g., an ROAA of 1.375% produces a Percent of Base Pay
calculation of 8.0%).  For net income in excess of the 2.00% ROAA or 20.0% ROE,
as applicable,  the Employee will receive a Premium Incentive Bonus equal to
<PAGE>
 
4.0% of the excess net income.  No incentive compensation will be paid if the
Bank's most recent composite CAMELS rating is less than 2, or ROAA is less than
one-half of one (.50%)  percent, or ROE, where applicable, is less than ten
(10%) percent.  In the event the employee is entitled to incentive compensation
as provided herein, the percentage of base pay paid as incentive compensation
for the bank attaining a composite CAMELS of at least 2, said percentage of base
pay will be reduced by five (5%) percent for each individual rating of 3
contained within the overall composite rating.  Incentive compensation is
payable to the Employee no later than March 15th of the year following the year
on which it is calculated.

     Notwithstanding the foregoing, the Base Salary adjustments and Incentive
Compensation payments contemplated in this agreement shall not become due and
payable until the Board of Directors of the Bank has determined, according to
reasonable safety and soundness standards, that the overall financial condition
of the Bank, including asset quality, will not be adversely affected by the
payment of said amounts.