<PAGE>



                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K/A
                                (Amendment No. 1)

                     ANNUAL REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal year ended December 31, 2002

                         Commission File No. 000-32547

                       MOUNTAINBANK FINANCIAL CORPORATION
                       (Name of Registrant in its charter)

              North Carolina                                56-2237240
      (State or other jurisdiction of                   (I.R.S. Employer
      incorporation or organization)                   Identification No.)

              201 Wren Drive
      Hendersonville, North Carolina                          28792
  (Address of principal executive offices)                 (Zip Code)

                                 (828) 693-7376
                 Issuer's telephone number, including area code

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

<TABLE>
<S>                                                   <C>
Securities registered under Section 12(g) of the Act: Common Stock, $4.00 par value per share
                                                              (Title of class)
</TABLE>

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

                                 Yes [X] No [ ]

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

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

                                 Yes [ ] No [X]

     The aggregate market value of the Registrant's voting and non-voting common
equity held by nonaffiliates computed by reference to the price at which the
common equity was last sold as of the last business day of the Registrant's most
recently completed second fiscal quarter was $65,361,624.

     On March 15, 2003, the number of outstanding shares of Registrant's common
stock was 3,220,657.

<PAGE>

                                EXPLANATORY NOTE

     This Amendment No. 1 on Form 10-K/A amends the Registrant's 2002 Annual
Report on Form 10-K to delete Items 10, 11, 12 and 13 of the original filing in
their entirety and, in their place, to insert new Items 10, 11, 12 and 13 as
appear below and to insert Exhibits 10.3 and 10.4.

                                    PART III

Item 10. Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 16(a) of the Exchange Act.

         Directors. The following table lists information about MFC's current
         directors.

<TABLE>
<CAPTION>
                           Position with
                              MFC and           First                          Principal occupation
   Name and age            MountainBank      elected (1)                      and business experience
----------------------   -----------------   -----------   ----------------------------------------------------------------
<S>                      <C>                 <C>           <C>
William A. Banks             Director        2002 / 2005   President, BanCo Lumber, Inc. (logging/lumber manufacturing);
       (79)                                                co-owner, Mountain Air Country Club

William H. Burton III        Director        1997 / 2003   President and Chief Executive Officer,
       (48)                                                Cafe Enterprises, Inc. (regional restaurant company)

J. W. Davis (2)          President, Chief    1997 / 2004   MFC's and MountainBank's executive officer
       (56)              Executive Officer
                           and Director

Kenneth C. Feagin            Director        1997 / 2005   President, Ken Feagin Truck & Trailer Sales; Partner,
       (48)                                                Martin-Feagin Ford Lincoln Mercury; formerly, partner and owner,
                                                           Bryan Easler Ford (1980 - 2001) (automobile dealerships)

Danny L. Ford                Director        1999 / 2004   Self-employed cattle rancher; formerly, head football
       (55)                                                coach, University of Arkansas (1993 - 1997) and Clemson
                                                           University (1978 - 1989)

Boyd L. Hyder                Chairman        1997 / 2003   President and owner, B&A Hyder Trucking, Inc. (trucking
       (61)                                                company)

J. Edward Jones              Director        1998 / 2005   President, Sutherland Insurance & Realty Company (general
       (68)                                                insurance and real estate)

Ronald R. Lamb               Director        1997 / 2005   Owner, Lamb Fruit Co., Inc. and Ottanola Farms (apple production
       (67)                                                and sales)

H. Steve McManus             Director        2000 / 2005   President, Beacon Food Services, Inc. (restaurant), McManus
       (61)                                                Development LLC, and Moon McManus Developers LLC
                                                           (residential real estate developers); formerly, Chief
                                                           Executive Officer, Hardee's Food Systems, Inc. (1995 - 1997)

Van F. Phillips              Director        2002 / 2005   Vice President, Great Meadows, Inc. (real estate
       (51)                                                development); general partner, Spruce Pine Shopping Center, Ltd.

Catherine H. Schroader       Director        1997 / 2003   Co-owner and manager, Schroader's Honda, Inc. (motorcycle
       (66)                                                dealership)

Maurice A. Scott             Director        1997 / 2003   Retired; previously, Plant Manager, Monsanto Company (chemical
       (58)                                                manufacturer) (1981 - 1997)
</TABLE>

----------
(1)  "Year first elected" refers to the year in which each individual first took
     office as a director of MFC or, if before MFC's incorporation during 2001,
     as a director of MountainBank. With the exception of Mr. Banks and Mr.
     Phillips, each person first became a director during January 2001 at the
     time MFC was incorporated, and each of them previously served, and
     continues to serve, as a director of MountainBank. Mr. Banks and Mr.
     Phillips previously served as directors

                                        2

<PAGE>

     of First Western Bank and were appointed to serve as directors of MFC
     following and pursuant to the agreement pertaining to MFC's acquisition of
     the bank.

(2)  Mr. Davis' employment agreement with MountainBank provides that he be
     nominated each year for election as a director.

          Executive Officers. MFC's and MountainBank's current executive
officers are listed below.

     J. W. Davis, age 56, serves as MFC's and MountainBank's President and Chief
Executive Officer. He was first employed by MountainBank's organizers during
1996 to coordinate and direct its initial organization, and he was elected
President when MountainBank began operations during 1997. Previously, Mr. Davis
was employed for 15 years with NationsBank (now Bank of America) where he held
various positions, the most recent of which was Senior Vice President and
Regional Executive for that bank's western South Carolina branches. He has a
total of 33 years of banking experience.

     Vincent K. Rees, age 35, has served as MountainBank's Executive Vice
President since 1999, and he served as Chief Lending Officer from the time the
bank began operations during 1997 until January 2002. He previously was employed
for seven years by NationsBank (now Bank of America) where he served as Vice
President and in various positions in branch management, credit analysis, and
consumer and commercial lending. Mr. Rees has a total of 13 years of banking
experience.

     Gregory L. Gibson, age 46, serves as MFC's and MountainBank's Executive
Vice President and Chief Financial Officer. He became a full-time employee of
MountainBank during 2000, having previously served as its Chief Financial
Officer on a part-time basis since 1999. From 1997 until he was employed by
MountainBank, Mr. Gibson operated his own public accounting and financial
institutions consulting firm (which MountainBank retained to provide it with
financial consulting services) and, from 1994 to 1997, was employed as Senior
Vice President of Bank of Mecklenburg, Charlotte, North Carolina. Mr. Gibson is
a certified public accountant and has 22 years of experience in the banking
industry, having served as an executive officer of six community banks and bank
holding companies.

          Section 16(a) Beneficial Ownership Reporting Compliance. MFC's
directors and executive officers are required by federal law to file reports
with the Securities and Exchange Commission regarding the amount of and changes
in their beneficial ownership of MFC's equity securities. Based on its review of
copies of those reports, MFC's Proxy Statements and Annual Reports on Form 10-K
are required to disclose failures to report shares beneficially owned or changes
in beneficial ownership, and failures to timely file required reports, during
previous years. It has come to MFC's attention that its executive officer,
Gregory L. Gibson, overlooked the filing of a report relating to one purchase of
shares by a related interest during 2002. That report is in the process of being
prepared.

                                        3

<PAGE>

Item 11. Executive Compensation.

Officer Compensation

          Cash Compensation. The following table shows the cash and certain
other compensation received or deferred by MFC's and MountainBank's named
executive officers for the years indicated.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                              Annual Compensation              Long term compensation
                                    ----------------------------------------   ----------------------
          Name and                                           Other annual           Securities             All other
  principal position(s)      Year   Salary (1)    Bonus     compensation (2)   underlying options (3)   compensation (4)
--------------------------   ----   ----------   --------   ----------------   ----------------------   ---------------
<S>                          <C>     <C>         <C>              <C>                 <C>                   <C>
J. W. Davis                  2002    $193,550    $204,860         -0-                   -0-                 $24,750
   President and             2001     163,750     135,000         -0-                   -0-                  13,450
   Chief Executive Officer   2000     144,000      75,000         -0-                 15,000                  5,500

Vincent K. Rees              2002     120,000      90,000         -0-                   -0-                   2,321
   Executive Vice            2001      94,479      70,000         -0-                   -0-                   2,716
   President                 2000      78,333      35,000         -0-                  9,000                  1,961

Gregory L. Gibson            2002     115,833     110,000         -0-                   -0-                     -0-
   Executive Vice            2001      90,000      70,000         -0-                   -0-                     -0-
   President and             2000      81,667      27,500         -0-                  9,000                    -0-
   Chief Financial Officer
</TABLE>

----------
(1)  Includes amounts of salary deferred at each officer's election under
     MountainBank's Section 401(k) plan.

(2)  In addition to compensation paid in cash, MFC's and MountainBank's
     executive officers receive certain personal benefits. The value of non-cash
     benefits received by each named officer during 2002 did not exceed 10% of
     his cash compensation.

(3)  As adjusted for stock dividends and splits since the date the options were
     granted.

(4)  For 2002, consists of, for Mr. Davis, the Bank's $4,750 contribution to the
     Section 401(k) plan for his account and $20,000 in directors' fees, and for
     Mr. Rees, the Bank's contribution to the Section 401(k) plan for his
     account.

          Employment Agreements. The executive officers listed in the Summary
Compensation Table above are employed by MountainBank pursuant to employment
agreements. The agreements call for original terms of three-years but, absent
notice of non-renewal from either party, the term of each agreement is extended
by one additional year on each anniversary date of that agreement. The
agreements provide for annual base salary of not less than $108,000 for Mr.
Davis, $70,000 for Mr. Rees, and $90,000 for Mr. Gibson (as those amounts may be
increased from time to time), and other benefits. Each officer's agreement may
be terminated by MountainBank at any time for "just cause" (as defined in the
agreement) but, if the bank terminates an officer's agreement without cause, the
bank must continue to pay salary and benefits to the officer for a period of two
years in the case of Mr. Davis or one year in the case of Mr. Rees and Mr.
Gibson. Following a "change in control" (as defined in the agreements) of
MountainBank, if the bank or its successor terminates an officer's agreement
without cause within one year, the officer will be entitled to receive salary
and benefits (other than under qualified retirement plans) for three full years
in the case of Mr. Davis, or two full years in the case of Mr. Rees and Mr.
Gibson, following the date of termination, together with reimbursement for the
amount of any excise tax liability he incurs as a result of those payments.
Also, (1) following a change in control that was not approved by at least
two-thirds of the bank's directors who are not affiliates of the acquiring
person, an officer may voluntarily terminate his agreement for any reason within
one year and be entitled to receive salary and benefits for three full years in
the case of Mr. Davis, or two full years in the case of Mr. Rees and Mr. Gibson,
as described above, and (2) following a change in control that was approved by
at least two-thirds of the bank's directors who are not affiliates of the
acquiring person, an officer may voluntarily terminate

                                        4

<PAGE>

his agreement and be entitled to continue to receive salary and benefits as
described above if, without his consent, he is required to move his residence or
principal job location more than 50 miles from Hendersonville, his salary or
benefits are reduced, or his responsibilities or authority are reduced below the
level associated with his position described in his agreement.

          Supplemental Retirement and Death Benefits. As a supplement to
retirement benefits under its Section 401(k) plan, MountainBank has established
a supplemental retirement arrangement under which benefits will be paid to the
bank's executive officers listed in the Summary Compensation Table above
following their retirement or other terminations of their employment. The
amounts of each officer's benefits will be based on the difference between (1)
increases in the cash values of life insurance policies purchased and owned by
MountainBank to fund its obligations to that officer, and (2) the bank's assumed
opportunity cost related to premiums paid for those policies. Full, lifetime
benefits will be paid to an officer following his retirement from employment
with MountainBank on or after age 65. In the case of an officer's retirement or
the termination of his employment for any other reason, including his death,
before age 65, reduced benefits will be paid. However, if the officer's
employment terminates before age 65 as a result of his disability, or due to a
change in control of the bank, full benefits will be paid. All benefits are
forfeited if an officer's employment is terminated for cause. The amounts of
benefits that will be paid to each officer following his retirement or other
termination of employment currently are not calculable.

          Employee Stock Options. The following table contains information
regarding options to purchase shares of MFC's common stock that were held on
December 31, 2002, under MFC's employee stock purchase plan by the executive
officers named in the Summary Compensation Table above.

                 AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                        AND FISCAL YEAR END OPTION VALUES

<TABLE>
<CAPTION>
                                                           Number of securities             Value of unexercised
                                                          underlying unexercised            in-the-money options
                                                     options on December 31, 2002 (2)   on December 31, 2002 (2)(3)
                                                     --------------------------------   ---------------------------
                        Shares acquired     Value
       Name               on exercise     realized      Exercisable   Unexercisable     Exercisable   Unexercisable
---------------------   ---------------   --------      -----------   -------------     -----------   -------------

<S>                           <C>                          <C>            <C>             <C>            <C>
J. W. Davis .........         (1)            --            49,200         9,000           $979,312       $114,000
Vincent K. Rees .....         (1)            --            25,200         5,400            497,256         68,400
Gregory L. Gibson ...         (1)            --            11,160         9,000            180,166        128,000
</TABLE>

----------

(1)  No options were exercised during 2002.
(2)  All share and dollar amounts have been adjusted, or calculated based on an
     exercise price that has been adjusted, for the six-for-five stock split
     which was effected in the form of a 20% stock dividend on March 11, 2002.
(3)  Represents the aggregate market value on December 31, 2002, of shares
     underlying options held on that date, minus the aggregate exercise or
     purchase price of those shares.

Director Compensation

          Director Fees. MFC's directors also serve as directors of
MountainBank. Each director currently receives a monthly retainer of $100 plus a
fee of $900 for attendance at each meeting of MFC's or MountainBank's Board of
Directors and $150 for attendance at each meeting of a Board committee. Members
of the Executive Committee receive a monthly retainer of $500 and are not
compensated for attendance at Committee meetings.

                                        5

<PAGE>

          In addition to his compensation for services as a director, Maurice A
Scott has been paid $3,000 per month since July 2002 for consulting services in
connection with MFC's acquisition of TrustCo Holding, Inc. and the integration
of the business of that company's subsidiaries into MFC.

          Director Retirement and Death Benefits. MountainBank has established
an arrangement under which its directors will receive annual retirement benefits
of $5,000 for ten years following their retirement after completing ten years of
service as directors. Reduced annual benefits are payable to a director whose
service terminates for any reason, including disability, before he has completed
ten years of service. However, if a director's "early termination" results from
his death or occurs for any reason within one year following a change in control
of the bank, the director, or his beneficiary in the case of death, would
receive full benefits. All benefits are forfeited if a director's service is
terminated for cause.

          Director Stock Options. MFC's non-employee directors hold options to
purchase the following numbers of shares of MFC's common stock under its
director stock option plan: William H. Burton III - 24,424; Kenneth C. Feagin -
24,779; Danny L. Ford - 17,673; Boyd L. Hyder - 3,860; J. Edward Jones - 17,197;
Ronald R. Lamb - 16,827; H. Steve McManus - 15,541; Catherine H. Schroader -
26,769; and Maurice A. Scott - 7,735. Additionally, William A. Banks and Van F.
Phillips, who formerly served as directors of First Western Bank and who became
MFC's directors in connection with MFC's acquisition of that bank, each holds
options to purchase 7,860 shares. Those options originally were granted by First
Western Bank under its separate plans and were assumed by MFC and converted into
options to purchase MFC common stock in connection with the acquisition.

Item 12. Security Ownership of Certain Beneficial Owners and Management and
         Related Stockholder Matters.

          Beneficial Ownership of Equity Securities. The following table
describes the beneficial ownership of MFC's equity securities as of April 29,
2003, by its current directors, nominees for election as directors, and certain
of its executive officers, individually, and by all its current directors and
executive officers as a group.

<TABLE>
<CAPTION>
                                                             Amount and nature of
                                                         beneficial ownership (1)(2)
                                          --------------------------------------------------------
                Name of                                  Percent of      Series A       Percent of
           beneficial owner               Common Stock    class (3)   Preferred Stock    class (3)
---------------------------------------   ------------   ----------   ---------------   ----------
<S>                                          <C>            <C>            <C>             <C>
William A. Banks ......................       13,408        0.42%             -0-            --

William H. Burton III .................       68,372        2.10%          10,500          2.50%

J. W. Davis ...........................       81,600        2.50%             -0-            --

Kenneth C. Feagin .....................       42,900        1.32%             -0-            --

Danny L. Ford .........................       52,598        1.62%           5,000          1.19%

Gregory L. Gibson .....................       15,410        0.48%             -0-            --

Boyd L. Hyder .........................      151,953        4.65%          40,000          9.54%

J. Edward Jones .......................       28,127        0.87%           5,000          1.19%

Ronald R. Lamb ........................       29,116        0.90%             -0-            --

H. Steve McManus ......................      122,551        3.76%          20,000          4.77%

Van F. Phillips .......................       76,476        2.37%           4,000          0.95%
</TABLE>

                                        6

<PAGE>

<TABLE>
<CAPTION>
                                                             Amount and nature of
                                                         beneficial ownership (1)(2)
                                          --------------------------------------------------------
                Name of                                  Percent of      Series A       Percent of
           beneficial owner               Common Stock    class (3)   Preferred Stock    class (3)
---------------------------------------   ------------   ----------   ---------------   ----------
<S>                                          <C>           <C>            <C>             <C>
Vincent K. Rees .......................       26,280        0.81%             -0-            --

Catherine H. Schroader ................       86,104        2.65%           5,685          1.36%

Maurice A. Scott ......................       65,986        2.03%          20,000          4.77%

All current directors and executive
    officers as a group (14 people) ...      860,881       24.03%         110,185         26.28%
</TABLE>

----------
(1)  Except as otherwise noted, and to the best of MFC's knowledge, the
     individuals named and included in the group exercise sole voting and
     investment power with respect to all listed shares of MFC's Common Stock.
     The listed shares include the following numbers of shares with respect to
     which the individuals named and included in the group have shared voting
     and investment power: Mr. Banks - 2,774; Mr. Burton - 7,566; Mr. Ford -
     18,720; Mr. Gibson - 500; Mr. Hyder - 374; Mr. Lamb - 5,070; Mr. McManus -
     12,150; Mr. Phillips - 56,925; Mr. Rees - 1,080; Ms. Schroader - 26,952;
     Mr. Scott - 300; and all persons included in the group - 132,411. The
     listed shares also include the following numbers of shares that could be
     acquired by the individuals named and included in the group pursuant to
     currently exercisable stock options and with respect to which shares they
     may be deemed to have sole investment power only: Mr. Banks - 7,860; Mr.
     Burton - 21,754; Mr. Davis - 49,200; Mr. Feagin - 22,020; Mr. Ford -
     15,998; Mr. Gibson - 11,160; Mr. Jones - 15,065; Mr. Lamb - 13,955; Mr.
     McManus - 10,361; Mr. Phillips - 7,860; Mr. Rees - 25,200; Ms. Schroader -
     24,538; Mr. Scott - 5,182; and all persons included in the group - 230,153.
     Additionally, the listed shares include the following numbers of shares
     that could be acquired by the individuals named and included in the group
     upon the conversion of shares of MFC's Series A Preferred Stock they
     currently hold and with respect to which shares they may be deemed to have
     sole investment power only: Mr. Burton - 12,600; Mr. Ford - 6,000; Mr.
     Hyder - 48,000; Mr. Jones - 6,000; Mr. McManus - 24,000; Mr. Phillips -
     4,800; Ms. Schroader - 6,822; Mr. Scott - 24,000; and all persons included
     in the group - 132,222.
(2)  MFC's Series A Preferred Stock is non-voting stock. Except as otherwise
     noted, and to the best of MFC's knowledge, the individuals named and
     included in the group exercise sole investment power with respect to all
     listed shares of Series A Preferred Stock. The listed shares include the
     following numbers of shares with respect to which the individuals named and
     included in the group have shared voting and investment power: Mr. Burton -
     10,500; Ms. Schroader - 5,685; and all persons included in the group -
     16,185.
(3)  In the case of MFC's Common Stock, percentages are calculated based on
     3,220,882 total outstanding shares plus, in the case of each named
     individual and the group, the number of additional shares (if any) that
     could be purchased by that individual or by persons included in the group
     pursuant to currently exercisable stock options and/or upon the conversion
     of outstanding shares of MFC's Series A Preferred Stock that they hold. In
     the case of MFC's Series A Preferred Stock, percentages are calculated
     based on 419,243 total outstanding shares.

                                        7

<PAGE>

          Securities Authorized for Issuance Under Equity Compensation Plans.
The following table contains summary information as of December 31, 2002,
regarding all compensation plans and individual compensation arrangements under
which shares of MFC's common stock have been authorized for issuance.

<TABLE>
<CAPTION>
                                         EQUITY COMPENSATION PLAN INFORMATION
---------------------------------------------------------------------------------------------------------------------
                                             (a)                   (b)                            (c)
                                       Number of shares                               Number of shares remaining
                                      to be issued upon      Weighted-average     available for future issuance under
                                         exercise of        exercise price of    equity compensation plans (excluding
           Plan category             outstanding options   outstanding options      shares reflected in column (a))
----------------------------------   -------------------   -------------------   ------------------------------------
<S>                                       <C>                     <C>                           <C>
Equity compensation plans
   approved by security holders...        466,178(1)              $10.69                        402,509

Equity compensation plans not
   approved by security holders...            -0-                   N/A                             -0-
                                          -------                 ------                        -------
      Total.......................        466,178(1)              $10.69                        402,509
                                          -------                 ------                        -------
</TABLE>

----------
(1)  Includes outstanding options to purchase an aggregate of 113,980 shares at
     a weighted average exercise price of $17.17 which are held by former
     employees and directors of First Western Bank. Those options previously had
     been approved by First Western Bank's shareholders and were converted into
     options to purchase shares of MFC's common stock when First Western Bank
     was acquired by MFC on December 31, 2001.

Item 12.  Certain Relationships and Related Transactions.

          MountainBank has had, and expects to have in the future, banking
transactions in the ordinary course of its business with certain of its and
MFC's current directors executive officers, and their associates. All loans
included in those transactions were made on substantially the same terms,
including interest rates, repayment terms and collateral, as those prevailing at
the time the loans were made for comparable transactions with other persons, and
those loans do not involve more than the normal risk of collectibility or
present other unfavorable features.

          During 1997, and in connection with MountainBank's initial
organization, MountainBank's Chairman, Boyd L. Hyder, constructed and leased to
MountainBank its main banking and executive offices in Hendersonville, North
Carolina. MountainBank's lease agreement calls for an initial term of 20 years
(with two five-year renewal options) and current rental payments of $7,519 per
month (with rent adjustments each five years based on the consumer price index).
Before entering into the lease arrangement, MountainBank's Board of Directors
obtained an independent estimate of the rental value of the building and
compared the terms of the lease to lease terms on comparable properties.
Additionally, during 1998, MountainBank entered into a lease agreement with Mr.
Hyder for approximately 2,400 square feet of space in Four Seasons Shopping
Center that is used as MountainBank's administration/operations facility. The
lease agreement provides for an initial term of five years (with one five-year
renewal option) and rental payments of $1,050 per month. During 2000, the space
leased from Mr. Hyder was increased to approximately 4,800 square feet and,
during 2001, the leased space again was increased to approximately 6,800 square
feet. More recently, during 2002 the leased space was expanded again to provide
for installation of a call center and meeting facility. The lease agreements for
that additional space call for initial terms of ten years (with one five-year
renewal option) and aggregate additional rental payments of $5,306 per month.
Also during 2001, Mr. Hyder leased a building to MountainBank for use as a new
branch office. The terms of that lease call for an initial term of ten years
(with three five-year renewal options) and current lease payments of $2,500 per
month (with a 15% rent adjustment after the first five years and a renegotiated
rental for each renewal period).

                                        8

<PAGE>

          Van F. Phillips, a director of MFC who formerly served as Chairman of
First Western Bank, is a general partner in a partnership that leased property
to First Western Bank during 1997 for use as a branch office. MountainBank
assumed the lease during 2001 in connection with MFC's acquisition of First
Western Bank. The lease agreement calls for a current remaining term of
approximately 18 months (with one three-year renewal option) and rental payments
of $3,000 per month.

          During 2003, MountainBank proposes to lease a building in Greer, South
Carolina, from H. Steven McManus, a director of MFC, for use as an office
facility. While the terms of the proposed lease have not yet been
finalized, rental payments under the lease arrangement are expected to be
approximately $2,700 per month.

                                     PART IV

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

          (a) Exhibits. The following exhibits are filed herewith or
incorporated herein by reference as part of this Report.

Exhibit No.                         Description of Exhibit
-----------   ------------------------------------------------------------------

    2.1       Agreement and Plan of Reorganization and Merger dated June 20,
              2002, as amended, between MFC and CNB Holdings, Inc. (incorporated
              by reference from Exhibits to Amendment No. 2 to MFC's
              Registration Statement on Form S-4 filed on January 30, 2003, Reg.
              No. 333-100491)

    3.1       MFC's Articles of Incorporation, as amended (incorporated by
              reference from Exhibits to MFC's 2001 Annual Report on Form
              10-KSB)

    3.2       MFC's By-laws (incorporated by reference from Exhibits to MFC's
              Current Report on Form 8-K/A dated March 30, 2001)

    4.1       Indenture by and between MFC and Wells Fargo Bank, National
              Association, as Trustee, effective as of June 27, 2002
              (incorporated by reference from Exhibits to MFCs Quarterly Report
              on Form 10-QSB for the quarter ended June 30, 2002)

    4.2       Trust Preferred Securities Guarantee Agreement by and between MFC
              and Wells Fargo Bank, National Association, effective as of June
              27, 2002 (incorporated by reference from Exhibits to MFCs
              Quarterly Report on Form 10-QSB for the quarter ended June 30,
              2002)

   10.1       Employment Agreement dated June 26, 1997, between MountainBank and
              J. W. Davis (incorporated by reference from Exhibits to MFC's
              Registration Statement on Form S-4 filed on October 12, 2001, Reg.
              No. 333-71516)

   10.2       Addendum and Amendment to Employment Contract dated October 1,
              1998, between MountainBank and J.W. Davis (incorporated by
              reference from Exhibits to MFC's Registration Statement on Form
              S-4 filed on October 12, 2001, Reg. No. 333-71516)

   10.3       Employment Agreement dated August 2, 1999, between MountainBank
              and Vincent K. Rees (filed herewith)

   10.4       Employment Agreement dated April 1, 2000, between MountainBank and
              Gregory L. Gibson (filed herewith)

                                        9

<PAGE>

   10.5       1997 Employee Stock Option Plan, as amended (incorporated by
              reference from Exhibits to MFC's Registration Statement on Form
              S-4 filed on October 12, 2001, Reg. No. 333-71516)

   10.6       Form of Employee Stock Option Agreement for 1998 and 1999 grants
              (incorporated by reference from Exhibits to MFC's Registration
              Statement on Form S-4 filed on October 12, 2001, Reg. No.
              333-71516)

   10.7       Form of Employee Stock Option Agreement for 2000 grants
              (incorporated by reference from Exhibits to MFC's Registration
              Statement on Form S-4 filed on October 12, 2001, Reg. No.
              333-71516)

   10.8       1997 Director Stock Option Plan, as amended (incorporated by
              reference from Exhibits to MFC's Registration Statement on Form
              S-4 filed on October 12, 2001, Reg. No. 333-71516)

   10.9       Form of Director Stock Option Agreement (incorporated by reference
              from Exhibits to MFC's Registration Statement on Form S-4 filed on
              October 12, 2001, Reg. No. 333-71516)

   10.10      Lease Agreement pertaining to MFC's Main Office (incorporated by
              reference from Exhibits to MFC's Registration Statement on Form
              S-4 filed on October 12, 2001, Reg. No. 333-71516)

   10.11      Lease Agreements pertaining to MFC's administration/operations
              facility (incorporated by reference from Exhibits to MFC's
              Registration Statement on Form S-4 filed on October 12, 2001, Reg.
              No. 333-71516)

   10.12      First Western Bank 1998 Nonstatutory Stock Option Plan
              (incorporated by reference from Exhibits to MFC's 2001 Annual
              Report on Form 10-KSB)

   10.13      First Western Bank 1999 Nonstatutory Stock Option Plan
              (incorporated by reference from Exhibits to MFC's 2001 Annual
              Report on Form 10-KSB)

   10.14      Option Modification Agreements relating to stock options of
              William A. Banks (incorporated by reference from Exhibits to MFC's
              2001 Annual Report on Form 10-KSB)

   10.15      Option Modification Agreements relating to stock options of Van F.
              Phillips (incorporated by reference from Exhibits to MFC's 2001
              Annual Report on Form 10-KSB)

   11         Statement regarding computation of per share earnings
              (incorporated by reference from Footnote 13 of MFC's Consolidated
              Financial Statements included in Item 8 of this Report).

   21         List of MFC's subsidiaries (incorporated by reference from
              Exhibits to MFC's 2002 Annual Report on Form 10-K)

   23         Consent of Larrowe & Company, PLLC, to incorporation of its report
              on MFC's financial statements (incorporated by reference from
              Exhibits to MFC's 2002 Annual Report on Form 10-K)

               Schedules. All schedules are omitted as the required information
is either inapplicable or is presented in MFC's consolidated financial
statements or the Notes thereto which are included in this Report.

          (b) Reports on Form 8-K. During the last quarter of the period covered
by this Report on Form 10-K, no Current Reports on Form 8-K were filed by MFC.

                                       10

<PAGE>

                                   SIGNATURES

          In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, Registrant caused this Amendment No. 1 on Form 10-K/A to its 2002
Annual Report on Form 10-K to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                MOUNTAINBANK FINANCIAL CORPORATION


Date: April 30, 2003            By:    /S/ J. W. Davis
                                   ---------------------------------------------
                                           J. W. Davis
                                           President and Chief Executive Officer

                                       11

<PAGE>

                                  CERTIFICATION

     I, J. W. Davis, certify that:

1. I have reviewed this annual report on Form 10-K of MountainBank Financial
Corporation;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a) designed such disclosure controls and procedures to ensure that material
     information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this annual report is being
     prepared;

     b) evaluated the effectiveness of the registrant's disclosures controls and
     procedures as of a date within 90 days prior to the filing date of this
     annual report (the "Evaluation Date"); and

     c) presented in this annual report our conclusions about the effectiveness
     of the disclosure controls and procedures based on our evaluation as of the
     Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

     a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and

     b) any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal
     controls; and

6. The registrant's other certifying officer and I have indicated in this annual
report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.


Date: April 30, 2003                 /S/ J. W. Davis
                                     -------------------------------------------
                                         J. W. Davis
                                         President and Chief Executive Officer

                                       12

<PAGE>

                                  CERTIFICATION

     I, Gregory L. Gibson, certify that:

1. I have reviewed this annual report on Form 10-K of MountainBank Financial
Corporation;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a) designed such disclosure controls and procedures to ensure that material
     information relating to the registrant, including its consolidated
     subsidiaries, is made known to us by others within those entities,
     particularly during the period in which this annual report is being
     prepared;

     b) evaluated the effectiveness of the registrant's disclosures controls and
     procedures as of a date within 90 days prior to the filing date of this
     annual report (the "Evaluation Date"); and

     c) presented in this annual report our conclusions about the effectiveness
     of the disclosure controls and procedures based on our evaluation as of the
     Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

     a) all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to record,
     process, summarize and report financial data and have identified for the
     registrant's auditors any material weaknesses in internal controls; and

     b) any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal
     controls; and

6. The registrant's other certifying officer and I have indicated in this annual
report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.


Date: April 30, 2003                 /S/ Gregory L. Gibson
                                     -------------------------------------------
                                         Gregory L. Gibson
                                         Executive Vice President
                                            and Chief Financial Officer

                                       13

<PAGE>

                                  CERTIFICATION
                      (Pursuant to 18 U.S.C. Section 1350)

     The undersigned hereby certifies that (i) the foregoing Annual Report on
Form 10-K filed by MountainBank Financial Corporation (the "Registrant") for the
year ended December 31, 2002, fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information
contained in that Report fairly presents, in all material respects, the
financial condition and results of operations of the Registrant.


Date: April 30, 2003                 /S/ J. W. Davis
                                     -------------------------------------------
                                         J. W. Davis
                                         President and Chief Executive Officer


Date: April 30, 2003                 /S/ Gregory L. Gibson
                                     -------------------------------------
                                         Gregory L. Gibson
                                         Executive Vice President
                                            and Chief Financial Officer

                                       14

<PAGE>

                                  EXHIBIT INDEX

Exhibit
Number                               Description
-------                              -----------
2.1       Agreement and Plan of Reorganization and Merger dated June 20, 2002,
          as amended, between MFC and CNB Holdings, Inc. (incorporated by
          reference from Exhibits to Amendment No. 2 to MFCs Registration
          Statement on Form S-4 filed on January 30, 2003, Reg. No. 333-100491)

3.1       MFC's Articles of Incorporation, as amended (incorporated by reference
          from Exhibits to MFC's 2001 Annual Report on Form 10-KSB)

3.2       MFC's By-laws (incorporated by reference from Exhibits to MFC's
          Current Report on Form 8-K/A dated March 30, 2001)

4.1       Indenture by and between MFC and Wells Fargo Bank, National
          Association, as Trustee, effective as of June 27, 2002 (incorporated
          by reference from Exhibits to MFCs Quarterly Report on Form 10-QSB for
          the quarter ended June 30, 2002)

4.2       Trust Preferred Securities Guarantee Agreement by and between MFC and
          Wells Fargo Bank, National Association, effective as of June 27, 2002
          (incorporated by reference from Exhibits to MFCs Quarterly Report on
          Form 10-QSB for the quarter ended June 30, 2002)

10.1      Employment Agreement dated June 26, 1997, between MountainBank and J.
          W. Davis (incorporated by reference from Exhibits to MFC's
          Registration Statement on Form S-4 filed on October 12, 2001, Reg. No.
          333-71516)

10.2      Addendum and Amendment to Employment Contract dated October 1, 1998,
          between MountainBank and J.W. Davis (incorporated by reference from
          Exhibits to MFC's Registration Statement on Form S-4 filed on October
          12, 2001, Reg. No. 333-71516)

10.3      Employment Agreement dated August 2, 1999, between MountainBank and
          Vincent K. Rees (filed herewith)

10.4      Employment Agreement dated April 1, 2000, between MountainBank and
          Gregory L. Gibson (filed herewith)

10.5      1997 Employee Stock Option Plan, as amended (incorporated by reference
          from Exhibits to MFC's Registration Statement on Form S-4 filed on
          October 12, 2001, Reg. No. 333-71516)

10.6      Form of Employee Stock Option Agreement for 1998 and 1999 grants
          (incorporated by reference from Exhibits to MFC's Registration
          Statement on Form S-4 filed on October 12, 2001, Reg. No. 333-71516)

10.7      Form of Employee Stock Option Agreement for 2000 grants (incorporated
          by reference from Exhibits to MFC's Registration Statement on Form S-4
          filed on October 12, 2001, Reg. No. 333-71516)

10.8      1997 Director Stock Option Plan, as amended (incorporated by reference
          from Exhibits to MFC's Registration Statement on Form S-4 filed on
          October 12, 2001, Reg. No. 333-71516)

<PAGE>

10.9      Form of Director Stock Option Agreement (incorporated by reference
          from Exhibits to MFC's Registration Statement on Form S-4 filed on
          October 12, 2001, Reg. No. 333-71516)

10.10     Lease Agreement pertaining to MFC's Main Office (incorporated by
          reference from Exhibits to MFC's Registration Statement on Form S-4
          filed on October 12, 2001, Reg. No. 333-71516)

10.11     Lease Agreements pertaining to MFC's administration/operations
          facility (incorporated by reference from Exhibits to MFC's
          Registration Statement on Form S-4 filed on October 12, 2001, Reg. No.
          333-71516)

10.12     First Western Bank 1998 Nonstatutory Stock Option Plan (incorporated
          by reference from Exhibits to MFC's 2001 Annual Report on Form 10-KSB)

10.13     First Western Bank 1999 Nonstatutory Stock Option Plan (incorporated
          by reference from Exhibits to MFC's 2001 Annual Report on Form 10-KSB)

10.14     Option Modification Agreements relating to stock options of William A.
          Banks (incorporated by reference from Exhibits to MFC's 2001 Annual
          Report on Form 10-KSB)

10.15     Option Modification Agreements relating to stock options of Van F.
          Phillips (incorporated by reference from Exhibits to MFC's 2001 Annual
          Report on Form 10-KSB)

11        Statement regarding computation of per share earnings (incorporated by
          reference from Footnote 13 of MFC's Consolidated Financial Statements
          included in Item 8 of this Report).

21        List of MFC's subsidiaries (incorporated by reference from Exhibits to
          MFC's 2002 Annual Report on Form 10-K)

23        Consent of Larrowe & Company, PLLC, to incorporation of its report on
          MFC's financial statements (incorporated by reference from Exhibits to
          MFC's 2002 Annual Report on Form 10-K)

                                       16