EXHIBIT 13.1

                       2000 ANNUAL REPORT TO SHAREHOLDERS


MARKET  FOR  THE  COMPANY'S  COMMON  STOCK  AND  RELATED  SHAREHOLDER  MATTERS.

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  RESULTS OF OPERATIONS AND FINANCIAL
CONDITION.

INDEPENDENT  AUDITOR'S  REPORT.

CONSOLIDATED  FINANCIAL  STATEMENTS  AND  NOTES  TO  CONSOLIDATED  FINANCIAL
STATEMENTS.


                                        1
<PAGE>
                      MARKET FOR THE COMPANY'S COMMON STOCK
                         AND RELATED SHAREHOLDER MATTERS

     There  is currently no market for the Company's shares of Common Stock, and
it  is  not  likely that an active trading market will develop for the shares in
the  future.  There  are  no  present plans for the Company's Common Stock to be
traded  on  any  stock  exchange of over-the-counter market.  As of December 31,
2000,  there  were  approximately  642 holders of record of the Company's Common
Stock  and  800,000  shares  of  Common  Stock  issued  and  outstanding.

     No cash dividends have been paid to date on the Company's Common Stock, and
it  is  anticipated that earnings will be retained for the foreseeable future to
support  the Company's rapid growth and expansion.  The Company currently has no
source of income other than dividends and other payments received from the Bank.
The  amount  of dividends that may be paid by the Bank to the Company depends on
the  Bank's  earnings  and  capital position and is limited by federal and state
law,  regulation  and  policies.


                                        2
<PAGE>
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The  following  is  a  discussion  of  our financial condition and the financial
condition  of  our  bank  subsidiary,  The  Citizens  Bank of Forsyth County, at
December  31,  2000  and  1999  and the results of operations for the years then
ended.  The  purpose  of  this  discussion  is to focus on information about our
financial  condition  and results of operations, that are not otherwise apparent
from our audited consolidated financial statements.  Reference should be made to
those  statements  and  the  selected financial data presented elsewhere in this
report  for  an  understanding  of  the  following  discussion  and  analysis.

FORWARD-LOOKING  STATEMENTS

We  may  from  time  to  time  make  written or oral forward-looking statements,
including  statements  contained in our filings with the Securities and Exchange
Commission  and  our  reports  to  stockholders.  Statements  made in the Annual
Report, other than those concerning historical information, should be considered
forward-looking  and  subject  to  various  risks  and  uncertainties.  Such
forward-looking  statements  are  made based upon management's belief as well as
assumptions made by, and information currently available to, management pursuant
to  "safe  harbor" provisions of the Private Securities Litigation Reform Act of
1995.  Our  actual results may differ materially from the results anticipated in
forward-looking  statements  due to a variety of factors, including governmental
monetary  and  fiscal  policies,  deposit  levels,  loan demand, loan collateral
values,  securities portfolio values, interest rate risk management, the effects
of  competition  in  the  banking business from other commercial banks, thrifts,
mortgage  banking  firms,  consumer finance companies, credit unions, securities
brokerage  firms,  insurance  companies,  money market funds and other financial
institutions  operating in our market area and elsewhere, including institutions
operating  through  the Internet, changes in governmental regulation relating to
the  banking  industry,  including  regulations  relating  to  branching  and
acquisitions,  failure  of  assumptions underlying the establishment of reserves
for  loan  losses, including the value of collateral underlying delinquent loans
and  other  factors.  We caution that such factors are not exclusive.  We do not
undertake  to update any forward-looking statement that may be made from time to
time  by  us,  or  on  our  behalf.

OVERVIEW

Our  2000  results  were highlighted by continued loan and deposit growth and an
increase  in  net income of 13%.  We opened a new branch in the Midway community
of  Forsyth County, Georgia in 2000 and are currently in process of constructing
a  permanent facility at this location.  We are also currently in the process of
planning  an additional branch facility in neighboring Cherokee County, Georgia.
The Forsyth County area remains one of the fastest growing areas in the country.
We believe that our geographic expansion will allow us to take advantage of this
growth.


                                        3
<PAGE>
FINANCIAL  CONDITION  AT  DECEMBER  31,  2000  AND  1999

The  following  is  a  summary  of  our  balance sheets for the years indicated:

<TABLE>
<CAPTION>
                                      December  31,
                                      2000     1999
<S>                                  <C>      <C>
                                  (Dollars in Thousands)

Cash and due from banks              $ 2,575  $ 1,959
Interest-bearing deposits in banks       172       --
Federal funds sold                     3,550    2,060
Securities                            25,747   21,843
Loans, net                            47,715   38,072
Premises and equipment                 1,575    1,051
Other assets                           1,240    1,224
                                     -------  -------

                                     $82,574  $66,209
                                     =======  =======

Total deposits                       $73,260  $58,040
Other liabilities                        485      462
Stockholders' equity                   8,829    7,707
                                     -------  -------

                                     $82,574  $66,209
                                     =======  =======
</TABLE>

FINANCIAL  CONDITION  AT  DECEMBER  31,  2000  AND  1999

As  of  December  31, 2000, we had total assets of $82.6 million, an increase of
25% over December 31, 1999.  Total interest-earning assets were $77.8 million at
December  31, 2000 or 94.2% of total assets as compared to 94.3% of total assets
at  December 31, 1999.  Our primary interest-earning assets at December 31, 2000
were  loans, which made up 62.1% of total interest-earning assets as compared to
61.7%  at  December 31, 1999.  Our loan to deposit ratio was 66% at December 31,
2000  as  compared to 67% at December 31, 1999.  Deposit growth of $15.2 million
has been used to fund loan growth of $9.8 million and to increase the securities
portfolio  by  $3.9  million.  The  remainder  was  used  to fund a $1.5 million
increase  in  federal  funds  sold.

Our  securities  portfolio,  consisting  of  U.S.  Agency  securities, state and
municipal  securities,  corporate  securities,  mortgage-backed  securities  and
restricted  equity  securities,  amounted to $25.7 million at December 31, 2000.
Unrealized  losses  on  securities  amounted to $227,000 at December 31, 2000 as
compared  to  $1.1 million at December 31,1999.  Management has not specifically
identified  any  securities for sale in future periods, which, if so designated,
would require a charge to operations if the market value would not be reasonably
expected  to  recover  prior  to  the  time  of  sale.

We  have  66% of our loan portfolio collateralized by real estate located in our
primary market area of Forsyth County and surrounding counties.  Our real estate
mortgage  portfolio  consists  of  loans  collateralized  by one- to four-family
residential  properties  (42%),  construction loans to build one- to four-family
residential properties (26%), and nonresidential properties consisting primarily
of  small business commercial properties (32%).  We generally require that loans
collateralized  by  real  estate  not  exceed  80%  of  the  collateral  value.


                                        4
<PAGE>
The  remaining  34%  of the loan portfolio consists of commercial, consumer, and
other  loans.  We require collateral commensurate with the repayment ability and
creditworthiness  of  the  borrower.

The  specific  economic  and  credit  risks  associated with our loan portfolio,
especially the real estate portfolio, include, but are not limited to, a general
downturn  in  the  economy  which  could affect unemployment rates in our market
area,  general  real  estate  market  deterioration, interest rate fluctuations,
deteriorated  or  non-existing collateral, title defects, inaccurate appraisals,
financial  deterioration  of  borrowers,  fraud,  and  any  violation of banking
protection  laws.  Construction lending can also present other specific risks to
the  lender  such  as  whether developers can find builders to buy lots for home
construction,  whether  the  builders can obtain financing for the construction,
whether  the  builders  can  sell the home to a buyer, and whether the buyer can
obtain permanent financing.  Currently, real estate values and employment trends
in  our  market area are stable with no indications of a significant downturn in
the  local  economy.

We  attempt  to  reduce  these economic and credit risks not only by adhering to
loan  to value guidelines, but also by investigating the creditworthiness of the
borrower  and  monitoring the borrower's financial position.  Also, we establish
and  periodically  review  our  lending  policies and procedures.  State banking
regulations limit exposure by prohibiting secured loan relationships that exceed
25% of the Bank's statutory capital and unsecured loan relationships that exceed
15%  of  the  Bank's  statutory  capital.

LIQUIDITY  AND  CAPITAL  RESOURCES

The  purpose of liquidity management is to ensure that there are sufficient cash
flows  to  satisfy demands for credit, deposit withdrawals, and our other needs.
Traditional  sources  of  liquidity  include asset maturities and growth in core
deposits.  A  company  may  achieve  its  desired  liquidity objectives from the
management  of  assets and liabilities and through funds provided by operations.
Funds  invested in short-term marketable instruments and the continuous maturing
of  other  earning  assets  are sources of liquidity from the asset perspective.
The  liability  base  provides  sources of liquidity through deposit growth, the
maturity structure of liabilities, and accessibility to market sources of funds.

Scheduled  loan  payments  are  a  relatively  stable  source of funds, but loan
payoffs  and deposit flows fluctuate significantly, being influenced by interest
rates  and  general  economic  conditions and competition.   We attempt to price
deposits  to  meet  asset/liability  objectives  consistent  with  local  market
conditions.

Our  liquidity  and  capital  resources  are  monitored  on  a periodic basis by
management,  State  and  Federal  regulatory  authorities.  As  determined under
guidelines  established  by  regulatory  authorities  and  internal  policy, our
liquidity  was  considered  satisfactory.

At  December  31,  2000,  we  had  loan commitments outstanding of $9.7 million.
Because  these  commitments  generally have fixed expiration dates and many will
expire without being drawn upon, the total commitment amounts do not necessarily
represent  future  cash  requirements.  If  needed,  we  have  the  ability on a
short-term  basis  to  borrow  and  purchase  federal funds from other financial
institutions.  At  December  31,  2000,  we had arrangements with two commercial
banks  for  short-term  advances  of  $2,150,000.

At  December  31,  2000,  our  capital  ratios were considered adequate based on
regulatory minimum capital requirements.   Our stockholders' equity increased by
$1,122,000  due to net income in 2000 of $549,000 and to an increase in the fair
value  of  securities available-for-sale, net of tax, in the amount of $573,000.


                                        5
<PAGE>
For  regulatory  purposes,  net  unrealized  gains  and  losses  on  securities
available-for-sale  are  excluded  in  the  computation  of  the capital ratios.

The primary source of funds available to Forsyth Bancshares, Inc. is the payment
of dividends by the Bank.  Banking regulations limit the amount of the dividends
that  may  be  paid  without  prior  approval  of  the Bank's regulatory agency.
Currently, the Bank could pay $288,000 in dividends without regulatory approval.

The  minimum capital requirements to be considered well capitalized under prompt
corrective  action  provisions and the actual capital ratios for us and the Bank
as  of  December  31,  2000  are  as  follows:

<TABLE>
<CAPTION>
                                                Actual
                              -------------------------------------------
                                                             Regulatory
                              Consolidated       Bank       Requirements
                              -------------  -------------  -------------
<S>                           <C>            <C>            <C>

Leverage capital ratio               11.71%         11.62%          5.00%
Risk-based capital ratios:
    Core capital                     17.53          17.40           6.00
    Total capital                    18.63          18.49          10.00
</TABLE>

At December 31, 2000, we had $320,000 of commitments for capital expenditures to
complete  our  Midway  branch.

These  ratios  may decline as asset growth continues, but are expected to exceed
the regulatory minimum requirements.  Anticipated future earnings will assist in
keeping  these  ratios  at  satisfactory  levels.

We  believe  that our liquidity and capital resources are adequate and will meet
our  foreseeable  short  and  long-term  needs.  We anticipate that we will have
sufficient  funds  available  to  meet  current  loan commitments and to fund or
refinance,  on  a  timely basis, our other material commitments and liabilities.

Management  is  not  aware  of  any other known trends, events or uncertainties,
other  than  those discussed above, that will have or that are reasonably likely
to  have  a  material  effect on our liquidity, capital resources or operations.
Management  is  also  not aware of any current recommendations by the regulatory
authorities  that,  if  they  were  implemented,  would  have  such  an  effect.

EFFECTS  OF  INFLATION

The  impact  of  inflation  on  banks  differs  from its impact on non-financial
institutions.  Banks,  as  financial  intermediaries,  have  assets  that  are
primarily  monetary  in  nature  and  that  tend  to  fluctuate  in concert with
inflation.  A  bank can reduce the impact of inflation if it can manage its rate
sensitivity  gap.  This  gap  represents  the  difference between rate sensitive
assets  and  rate  sensitive  liabilities.   We,  through  our  asset-liability
committee,  attempt  to structure the assets and liabilities and manage the rate
sensitivity gap, thereby seeking to minimize the potential effects of inflation.
For  information  on  the  management  of our interest rate sensitive assets and
liabilities,  see  the  "Asset/Liability  Management"  section.


                                        6
<PAGE>
RESULTS  OF  OPERATIONS  FOR  THE  YEARS  ENDED  DECEMBER  31,  2000  AND  1999

The  following  is  a  summary  of  our  operations  for  the  years  indicated.

                                                     Years Ended December 31,
                                                          2000     1999
                                                     (Dollars in Thousands)

Interest income                                          $ 6,060  $ 4,666

Interest expense                                           3,073    2,213
                                                         -------  -------

Net interest income                                        2,987    2,453

Provision for loan losses                                    135      171

Other income                                                 120      129

Other expenses                                             2,176    1,711
                                                         -------  -------

Pretax income                                                796      700

Income taxes                                                 247      215
                                                         -------  -------

Net income                                               $   549  $   485
                                                         =======  =======

NET  INTEREST  INCOME

Our  results  of  operations  are  determined  by our ability to manage interest
income  and  expense  effectively,  to  minimize  loan and investment losses, to
generate  non-interest  income,  and  to  control  operating  expenses.  Because
interest  rates  are  determined by market forces and economic conditions beyond
our  control, our ability to generate net interest income depends on our ability
to  obtain  an  adequate  net  interest  spread  between  the  rate  we  pay  on
interest-bearing  liabilities  and  the rate we earn on interest-earning assets.

Our  net  yield on average interest-earning assets was 4.18% in 2000 as compared
to  4.08% in 1999.  Average loans increased by $10.7 million which accounted for
the  majority  of  an  $11.3  million increase in total average interest-earning
assets.  Average  interest-bearing  liabilities  increased by $10.4 million with
average  interest-bearing  demand  and  time  deposits  accounting  for the vast
majority  of  this increase.  The rate earned on average interest-earning assets
increased  to  8.49%  in  2000  from  7.77%  in  1999.  The rate paid on average
interest-bearing  liabilities  increased  to  5.29%  in 2000 from 4.64% in 1999.

PROVISION  FOR  LOAN  LOSSES

The  provision  for  loan losses was $135,000 in 2000 as compared to $171,000 in
1999.  The amounts provided are due primarily to the growth of the portfolio and
to  our  assessment  of  the  inherent  risk  in  the portfolio.  Based upon our
evaluation of the loan portfolio, we believe the allowance for loan losses to be
adequate  to  absorb  possible  losses  on  existing  loans  that  may  become
uncollectible.  This  evaluation


                                        7
<PAGE>
considers  past  due  and  classified  loans,  historical experience, underlying
collateral  values,  and  current  economic  conditions  that  may  affect  the
borrower's  ability  to  repay.  As  of  December 31, 2000, we had nonperforming
loans  and  assets  of $15,000 as compared to $23,000 at December 31, 1999.  The
allowance  for  loan  losses as a percentage of total loans at December 31, 2000
and  1999  was  1.25%.

OTHER  INCOME

Other  income  consists  of  service  charges  on  deposit  accounts,  other
miscellaneous  revenues  and  fees,  and  gains  and  losses  on  securities
transactions.  Other  income  was  $120,000  in  2000 as compared to $129,000 in
1999.  The  decrease  of $9,000 is due primarily to increased service charges on
deposit  accounts  in  the amount of $36,000 related to our deposit growth being
offset  by  a  net  increase  in  losses  realized on securities transactions of
$52,000.  The  majority  of  the  securities transaction losses were realized on
certain securities that we sold in the last quarter of 2000. The securities were
sold  in  an  effort  to  improve  our  overall  security  portfolio  yield.

OTHER  EXPENSES

Other  expense  for  2000  consists  of  salaries  and  employee  benefits ($1.1
million),  equipment  and  occupancy  expenses  ($393,000),  and other operating
expenses  ($682,000).  Salaries  and employee benefits increased by $269,000 due
to  an  increase  in  the  number of full time employees to 26 from 17 and other
annual  salary increases. Equipment and occupancy expenses increased by $113,000
due  primarily  to  increased  depreciation of $77,000 and increased maintenance
costs  of  $23,000.  Other operating expenses increased by $82,000 due to normal
increases  associated  with  the  growth  of  the  Bank.

INCOME  TAX

We  recognized income tax expense of $247,000 in 2000 as compared to $215,000 in
1999.  The  effective  tax  rate was 31% for 2000 and 1999.  We had expected the
effective  rate  to  be  higher  in  2000  due to state income taxes.   However,
anticipated  state  income  liabilities were substantially reduced by nontaxable
U.S  agency  interest  and  other  state  income  tax  credits.

ASSET/LIABILITY  MANAGEMENT

Our  objective  is  to  manage assets and liabilities to provide a satisfactory,
consistent  level  of  profitability  within  the framework of established cash,
loan, investment, borrowing, and capital policies.  Certain officers are charged
with  the  responsibility  for  monitoring  policies  and procedures designed to
ensure  acceptable  composition of the asset/liability mix. Management's overall
philosophy  is to support asset growth primarily through growth of core deposits
of  all  categories  made  by local individuals, partnerships, and corporations.

Our asset/liability mix is monitored on a regular basis with a report reflecting
the interest rate-sensitive assets and interest rate-sensitive liabilities being
prepared  and presented to the Bank's Board of Directors on a monthly basis. The
objective  of  this  policy  is  to  monitor  interest rate-sensitive assets and
liabilities  so  as  to minimize the impact of substantial movements in interest
rates  on  earnings.  An  asset  or  liability  is  considered  to  be  interest
rate-sensitive  if  it  will  reprice or mature within the time period analyzed,
usually  one  year  or less. The interest rate-sensitivity gap is the difference
between  the  interest-earning assets and interest-bearing liabilities scheduled
to  mature or reprice within such time period. A gap is considered positive when
the  amount  of  interest  rate-sensitive  assets exceeds the amount of interest
rate-sensitive  liabilities.  A  gap  is  considered negative when the amount of
interest  rate-sensitive liabilities exceeds the interest rate-sensitive assets.


                                        8
<PAGE>
During  a  period  of rising interest rates, a negative gap would tend to affect
net  interest  income adversely, while a positive gap would tend to result in an
increase in net interest income. Conversely, during a period of falling interest
rates,  a  negative  gap  would  tend  to  result in an increase in net interest
income, while a positive gap would tend to affect net interest income adversely.
If  our assets and liabilities were equally flexible and moved concurrently, the
impact  of  any  increase  or  decrease in interest rates on net interest income
would  be  minimal.

A simple interest rate "gap" analysis by itself may not be an accurate indicator
of  how  net  interest  income  will  be  affected by changes in interest rates.
Accordingly,  we  also  evaluate  how  the  repayment  of  particular assets and
liabilities  is  impacted  by changes in interest rates.  Income associated with
interest-earning  assets  and costs associated with interest-bearing liabilities
may  not  be  affected uniformly by changes in interest rates.  In addition, the
magnitude  and  duration  of  changes  in  interest rates may have a significant
impact  on  net  interest  income.  For  example,  although  certain  assets and
liabilities  may have similar maturities or periods of repricing, they may react
in  different  degrees  to  changes in market interest rates.  Interest rates on
certain  types  of  assets  and  liabilities  fluctuate in advance of changes in
general market rates, while interest rates on other types may lag behind changes
in  general  market rates.  In addition, certain assets, such as adjustable rate
mortgage  loans, have features (generally referred to as "interest rate caps and
floors")  that limit changes in interest rates.  Prepayment and early withdrawal
levels  also  could  deviate significantly from those assumed in calculating the
interest  rate  gap.  The  ability of many borrowers to service their debts also
may  decrease  during  periods  of  rising  interest  rates.

Changes  in  interest  rates  also affect our liquidity position.   We currently
price  deposits  in response to market rates and it is management's intention to
continue this policy.  If deposits are not priced in response to market rates, a
loss  of  deposits  could  occur  that  would  negatively  affect  our liquidity
position.

At  December  31,  2000,  our  cumulative one year interest rate-sensitivity gap
ratio  was  63%.  Our  targeted ratio is 80% to 120% in this time horizon.  This
indicates  that our interest-bearing liabilities will reprice during this period
at  a rate faster than our interest-earning assets.  We are currently not within
our  targeted  parameters  due  primarily  to  89%  of  certificates  of deposit
repricing within a one year time frame as opposed to 45% of loans and securities
repricing  within  a  one  year  time  frame.  It is our belief that competitive
market  rates  are  being  paid  for certificates of deposit, and as long as the
rates  remain competitive, liquidity, while not assured, should not be adversely
affected.  However,  due  to the long-term nature of our interest-earning assets
and  the  short-term  nature  of  our interest-bearing liabilities, our earnings
could  be  negatively  impacted  in  a  rising  interest  rate  environment.

The  following  table  sets  forth  the  distribution  of  the  repricing of our
interest-earning  assets  and  interest-bearing  liabilities  as of December 31,
2000,  the  interest  rate-sensitivity  gap,  the  cumulative  interest
rate-sensitivity gap, the interest rate-sensitivity gap ratio and the cumulative
interest rate-sensitivity gap ratio.  The table also sets forth the time periods
in which interest-earning assets and interest-bearing liabilities will mature or
may reprice in accordance with their contractual terms.  However, the table does
not  necessarily  indicate  the impact of general interest rate movements on the
net  interest  margin  as  the  repricing  of  various  categories of assets and
liabilities  is subject to competitive pressures and the needs of our customers.
In  addition,  various  assets and liabilities indicated as repricing within the
same  period  may  in fact, reprice at different times within such period and at
different  rates.


                                        9
<PAGE>
<TABLE>
<CAPTION>
                                            After      After
                                            Three       One
                                            Months   Year but
                                 Within      but      Within    After
                                 Three      Within     Five     Five
                                 Months    One Year    Years    Years    Total
                        (Dollars in Thousands)
<S>                             <C>       <C>         <C>      <C>      <C>
Interest-earning assets:
  Interest-bearing
     deposits in banks          $    172  $      --   $    --  $    --  $   172
  Federal funds sold               3,550         --        --       --    3,550
  Securities                       2,829      2,007     9,973   10,938   25,747
  Loans                           20,566      8,102    18,773      878   48,319
                                --------  ----------  -------  -------  -------

                                  27,117     10,109    28,746   11,816   77,788
                                --------  ----------  -------  -------  -------

Interest-bearing liabilities:
  Interest-bearing demand
     deposits                     16,350         --        --       --   16,350
  Savings                            827         --        --       --      827
  Certificates, less than
        $100,000                   5,327     15,895     3,569       --   24,791
  Certificates, $100,000
  and over                         3,069     17,779     1,873       --   22,721
                                --------  ----------  -------  -------  -------

                                  25,573     33,674     5,442       --   64,689
                                --------  ----------  -------  -------  -------

Interest rate sensitivity
  gap                           $  1,544  $ (23,565)  $23,304  $11,816  $13,099
                                ========  ==========  =======  =======  =======
Cumulative interest rate
  sensitivity gap               $  1,544  $ (22,021)  $ 1,283  $13,099
                                ========  ==========  =======  =======
Interest rate sensitivity
  gap ratio                         1.06        .30      5.28       --
                                ========  ==========  =======  =======
Cumulative interest rate
  sensitivity gap ratio             1.06        .63      1.02     1.20
                                ========  ==========  =======  =======
</TABLE>

               SELECTED FINANCIAL INFORMATION AND STATISTICAL DATA

The  tables  and  schedules on the following pages set forth certain significant
financial  information and statistical data with respect to: the distribution of
our  assets,  liabilities  and  stockholders'  equity,  the  interest  rates  we
experience;  our  investment  portfolio;  our loan portfolio, including types of
loans,  maturities,  and sensitivities of loans to changes in interest rates and
information  on  nonperforming  loans;  summary  of the loan loss experience and
allowance  for  loan  losses;  types  of  deposits  and the return on equity and
assets.


                                       10
<PAGE>
                    DISTRIBUTION OF ASSETS, LIABILITIES, AND
                              STOCKHOLDERS' EQUITY:
                    INTEREST RATES AND INTEREST DIFFERENTIALS

AVERAGE  BALANCES

The  condensed average balance sheet for the years indicated is presented below.
(1)
<TABLE>
<CAPTION>
                                               Years Ended
                                               December 31,
                                             2000      1999
                                         (Dollars in Thousands)
<S>                                        <C>       <C>
                  ASSETS

  Cash and due from banks                  $ 1,835   $ 1,477
  Taxable securities                        20,128    22,598
  Nontaxable securities                      1,850     1,552
  Interest-bearing deposits in banks           307        --
  Securities valuation account                (907)     (421)
  Federal funds sold                         5,667     3,208
  Loans (2)                                 43,449    32,729
  Allowance for loan losses                   (538)     (407)
  Other assets                               2,584     1,902
                                           --------  --------
                                           $74,375   $62,638
                                           ========  ========

  Total interest-earning assets            $71,401   $60,087
                                           ========  ========

    LIABILITIES AND STOCKHOLDERS' EQUITY

  Deposits:
    Noninterest-bearing demand             $ 7,608   $ 6,486
    Interest-bearing demand                 14,670    12,930
    Savings                                    831       732
    Time                                    42,646    34,071
                                           --------  --------
      Total deposits                        65,755    54,219

  Other liabilities                            434       575
                                           --------  --------
      Total liabilities                     66,189    54,794
  Stockholders' equity                       8,186     7,844
                                           --------  --------
                                           $74,375   $62,638
                                           ========  ========

  Total interest-bearing liabilities       $58,147   $47,733
                                           ========  ========

<FN>
(1)          For each category, average balances were determined using the daily
             average  balances  during  the  year.

(2)          Nonaccrual  loans  of  $18,000 and $25,000 were included in average
             loans  for  2000  and  1999,  respectively.
</TABLE>


                                       11
<PAGE>
INTEREST  INCOME  AND  INTEREST  EXPENSE

The  following  tables  set  forth  the  amount  of interest income and interest
expense  for  each  category  of  interest-earning  assets  and interest-bearing
liabilities  and the average interest rate for total interest-earning assets and
total interest-bearing liabilities, net interest spread and net yield on average
interest-earning  assets.

<TABLE>
<CAPTION>
                                                           Years Ended December 31,
                                                           2000               1999
                                                              Average            Average
                                                    Interest    Rate    Interest   Rate
                                                          (Dollars in Thousands)
<S>                                                <C>         <C>      <C>        <C>
INTEREST INCOME:
    Interest and fees on loans (1)                 $   4,417    10.17%  $   3,145  9.61%
    Interest on taxable securities                     1,174     5.83       1,298  5.75
    Interest on nontaxable securities (2)                 80     4.30          66  4.21
    Interest on deposits in banks                         17     5.64           -     -
    Interest on Federal funds sold                       372     6.56         157  4.90
                                                   ----------           ---------
    Total interest income                              6,060     8.49       4,666  7.77
                                                   ----------           ---------
INTEREST EXPENSE:
    Interest on interest-bearing
      demand deposits                                    412     2.81         346  2.68
    Interest on savings deposits                          20     2.45          18  2.51
    Interest on time deposits                          2,641     6.19       1,849  5.43
                                                   ----------           ---------
    Total interest expense                             3,073     5.29       2,213  4.64
                                                   ----------           ---------
NET INTEREST INCOME                                $   2,987               $2,453
                                                   ==========           =========
    Net interest spread                                          3.20%             3.13%
                                                            ==========             =====
    Net yield on average interest-earning assets                 4.18%             4.08%
                                                            ==========             =====

<FN>
(1)            Interest and fees on loans includes $320,000 and $243,000 of loan
               fee  income  for  the  years  ended  December  31, 2000 and 1999,
               respectively.  There  was  no  interest  income  recognized  on
               nonaccrual  loans  during  2000  or  1999.

(2)            Average rates on nontaxable securities have not been presented on
               a  tax  equivalent  basis.
</TABLE>


                                       12
<PAGE>
RATE  AND  VOLUME  ANALYSIS

The  following table describes the extent to which changes in interest rates and
changes  in  volume  of interest-earning assets and interest-bearing liabilities
have  affected  our  interest income and expense during the year indicated.  For
each  category  of  interest-earning  assets  and  interest-bearing liabilities,
information  is provided on changes attributable to (1) change in volume (change
in volume multiplied by old rate); (2) change in rate (change in rate multiplied
by  old  volume);  and (3) a combination of change in rate and change in volume.
The  changes in interest income and interest expense attributable to both volume
and rate have been allocated proportionately on a consistent basis to the change
due  to  volume  and  the  change  due  to  rate.

<TABLE>
<CAPTION>
                                                   Year  Ended  December  31,
                                                        2000  vs.  1999
                                                        Changes  Due  To:

                                                     Rate    Volume      Net
<S>                                              <C>       <C>       <C>
                                                    (Dollars in Thousands)
    Increase (decrease) in:
    Income from interest-earning assets:
    Interest and fees on loans                   $   191   $ 1,081   $ 1,272
    Interest on taxable securities                    20      (144)     (124)
    Interest on nontaxable securities                  1        13        14
    Interest on deposits in banks                      -        17        17
    Interest on Federal funds sold                    66       149       215
                                                 --------  --------  --------
      Total interest income                          278     1,116     1,394
                                                 --------  --------  --------

    Expense from interest-bearing liabilities:
    Interest on interest-bearing
        demand deposits                               41        25        66
    Interest on savings deposits                      (1)        3         2
    Interest on time deposits                        285       507       792
                                                 --------  --------  --------
        Total interest expense                       325       535       860
                                                 --------  --------  --------
        Net interest income                      $   (47)  $   581   $   534
                                                 ========  ========  ========
</TABLE>


                                       13
<PAGE>
                              INVESTMENT PORTFOLIO

TYPES  OF  INVESTMENTS

The  carrying  amounts  of  securities  at the dates indicated are summarized as
follows:


<TABLE>
<CAPTION>
                                     December  31,
                                    2000     1999
<S>                                <C>      <C>
                                 (Dollars in Thousands)

  U.S. Government agencies         $13,010  $16,000
  State and municipal securities     1,801    1,651
  Corporate securities               4,319       --
  Mortgage-backed securities         6,431    4,192
  Restricted equity securities         186       --
                                   -------  -------
                                   $25,747  $21,843
                                   =======  =======
</TABLE>

MATURITIES

The  amounts  of  debt  securities, including the weighted average yield in each
category  as  of December 31, 2000 are shown in the following table according to
contractual maturity classifications (1) one year or less, (2) after one through
five  years,  (3)  after  five  through  ten  years  and  (4)  after  ten years.


<TABLE>
<CAPTION>
After  five                                             After  one

through  ten  years             One year or less    through five years

Amount   Yield (1)              Amount   Yield (1)  Amount  Yield(1)

<S>                             <C>      <C>        <C>      <C>        <C>      <C>
U.S. Government agencies        $    --        --%  $ 7,756      5.82%  $ 5,254     5.89%
State and municipal securities       --         --      189      3.80       195     4.15
Corporate securities              2,007       6.24    1,250      5.99     1,062     6.72
Mortgage-backed securities           --         --      779      5.94     1,378     5.68
                                -------             -------             -------

                                $ 2,007       6.24  $ 9,974      5.81   $ 7,889     5.92
                                =======             =======             =======

                                After  ten  years         Total

                                Amount   Yield (1)  Amount   Yield(1)

U.S. Government agencies        $    --       -- %  $13,010      5.85%
State and municipal               1,417       4.37    1,801      4.29
Corporate securities                 --         --    4,319      6.29
Mortgage-backed securities        4,274       6.43    6,431      6.21
                                -------             -------

                                $ 5,691       5.92  $25,561      5.91
                                =======             =======

<FN>
(1)  The  weighted  average  yields  were computed using coupon interest, adding
     discount  accretion or subtracting premium amortization, as appropriate, on
     a  ratable  basis  over  the  life  of  each  security.
</TABLE>


                                       14
<PAGE>
                                 LOAN PORTFOLIO

TYPES  OF  LOANS

The  amounts  of  loans  outstanding  at  the  indicated  dates are shown in the
following  table  according  to  the  type  of  loan.

<TABLE>
<CAPTION>
                                            December  31,
                                           2000      1999
<S>                                      <C>       <C>
                                      (Dollars in Thousands)

  Commercial                             $ 7,553   $ 7,520
  Real estate-construction                 8,229     5,419
  Real estate-mortgage                    23,569    18,276
  Consumer installment loans and other     8,968     7,339
                                         --------  --------
                                          48,319    38,554
  Less allowance for loan losses            (604)     (482)
                                         --------  --------
      Net loans                          $47,715   $38,072
                                         ========  ========
</TABLE>

MATURITIES  AND  SENSITIVITIES  OF  LOANS  TO  CHANGES  IN  INTEREST  RATES

Total  loans  as of December 31, 2000 are shown in the following table according
to  contractual  maturity  classifications  (1)  one year or less, (2) after one
through  five  years,  and  (3)  after  five  years.

<TABLE>
<CAPTION>
                                  (Dollars in Thousands)
<S>                               <C>
  Commercial
    One year or less              $                 7,245
    After one through five years                      984
    After five years                                    -
                                  -----------------------
                                                    8,229
                                  -----------------------

  Construction
    One year or less              $                 4,616
    After one through five years                    2,701
    After five years                                  236
                                  -----------------------
                                                    7,553
                                  -----------------------

  Other
    One year or less              $                17,239
    After one through five years                   15,229
    After five years                                   69
                                  -----------------------
                                                   32,537
                                  -----------------------

                                  $                48,319
                                  =======================
</TABLE>


                                       15
<PAGE>
The  following  table  summarizes  loans at December 31, 2000 with the due dates
after  one  year  that  have  predetermined  and floating or adjustable interest
rates.

                                    (Dollars in Thousands)

    Predetermined interest rates            $16,732
    Floating or adjustable interest rates     2,487
                                            -------
                                            $19,219
                                            =======

RISK  ELEMENTS

Information with respect to nonaccrual, past due, restructured and other problem
loans  at  December  31,  2000  and  1999  is  as  follows:

                                                         December  31,
                                                        2000    1999
                                                    (Dollars in Thousands)

  Nonaccrual loans                                   $      15  $     23
  Loans contractually past due ninety
    days or more as to interest or
    principal payments and still accruing                    5         0
  Restructured loans                                         0         0
  Loans, now current about which there are
    serious doubts as to the ability of the
    borrower to comply with loan repayment terms             0         0
  Interest income that would have been recorded
    on nonaccrual and restructured loans under
    original terms                                           2         2
  Interest income that was recorded on
    nonaccrual and restructured loans                        0         0

Our policy is to discontinue the accrual of interest income when, in the opinion
of management, collection of interest becomes doubtful.  This status is accorded
interest  when  (1)  there  is  a  significant  deterioration  in  the financial
condition  of  the  borrower and full repayment of principal and interest is not
expected  and  (2)  the principal or interest is more than ninety days past due,
unless  the  loan  is  both  well-secured  and  in  the  process  of collection.

Loans  classified  for  regulatory  purposes  as loss, doubtful, substandard, or
special  mention that have not been included in the table above do not represent
or  result  from trends or uncertainties that management reasonably expects will
materially  impact  future  operating  results, liquidity, or capital resources.
These  classified loans do not represent material credits about which management
is  aware of any information that causes management to have serious doubts as to
the  ability  of  such  borrowers  to  comply  with  the  loan  repayment terms.


                                       16
<PAGE>
                         SUMMARY OF LOAN LOSS EXPERIENCE

The  following  table  summarizes  average loan balances for the year determined
using  the  daily average balances during the year; changes in the allowance for
loan  losses  arising  from  loans  charged  off; recoveries on loans previously
charged  off;  additions  to  the allowance which have been charged to operating
expense;  and  the  ratio  of  net charge-offs during the year to average loans.

<TABLE>
<CAPTION>
                                              Years Ended December 31,
                                                   2000       1999
<S>                                             <C>         <C>
                                              (Dollars in Thousands)

  Average amount of loans outstanding           $  43,449   $32,729
                                                ==========  ========

  Balance of allowance for loan losses
    at beginning of year                        $     482   $   360
                                                ----------  --------

  Loans charged off
    Commercial and financial                           --        50
    Real estate mortgage                               --        --
    Installment                                        14         1
                                                ----------  --------
                                                       14        51
                                                ----------  --------

  Loans recovered
    Commercial and financial                           --        --
    Real estate mortgage                               --        --
    Installment                                         1         2
                                                ----------  --------
                                                        1         2
                                                ----------  --------

  Net charge-offs                                      13        49
                                                ----------  --------

  Additions to allowance charged to operating
    expense during year                               135       171
                                                ----------  --------

  Balance of allowance for loan losses
    at end of year                              $     604   $   482
                                                ==========  ========

  Ratio of net loans charged off during the
  year to average loans outstanding                  0.03%     0.15%
                                                ==========  ========
</TABLE>

ALLOWANCE  FOR  LOAN  LOSSES

The  allowance  for  loan  losses  is  maintained  at  a  level  that  is deemed
appropriate  by  management  to adequately cover all known and inherent risks in
the  loan  portfolio.  Our  evaluation of the loan portfolio includes a periodic
review  of loan loss experience, current economic conditions that may affect the
borrower's  ability  to  pay  and  the underlying collateral value of the loans.


                                       17
<PAGE>
As  of  December  31, 2000 and 1999, we made no allocations of our allowance for
loan  losses  to  specific categories of loans.  Based on our best estimate, the
allocation  of  the  allowance  for  loan  losses  to  types of loans, as of the
indicated  dates,  is  as  follows:

<TABLE>
<CAPTION>
                                              December  31,  2000            December  31,  1999
                                              Percent of loans in            Percent of loans in
                                                each category                    each category
                                   Amount      to total loans        Amount     to total loans
<S>                          <C>              <C>              <C>              <C>
                                              (Dollars in Thousands)

Commercial                   $           181           15.63%  $           145           19.51%
Real estate - construction                91           17.03                72           14.05
Real estate - mortgage                   272           48.78               217           47.40
Consumer installment
  loans and other                         60           18.56                48           19.04
                             ---------------  ---------------  ---------------  ---------------
                             $           604          100.00%  $           482          100.00%
                             ===============  ===============  ===============  ===============
</TABLE>

                                    DEPOSITS

Average  amount  of  deposits  and  average rates paid thereon, classified as to
noninterest-bearing  demand  deposits, interest-bearing demand deposits, savings
deposits,  and  time  deposits  is  presented  below.  (1)


<TABLE>
<CAPTION>
                                          Years  Ended  December  31,
                                            2000               1999
                                      Amount    Percent   Amount   Percent
<S>                                   <C>      <C>        <C>      <C>
                                             (Dollars in Thousands)

Noninterest-bearing demand deposits   $ 7,608       -- %  $ 6,486      -- %
Interest-bearing demand deposits       14,670       2.81   12,930      2.68
Savings deposits                          831       2.45      732      2.51
Time deposits                          42,646       6.19   34,071      5.43
                                      -------             -------
                                      $65,755             $54,219
                                      =======             =======

<FN>
(1)          Average  balances  were determined using the daily average balances
             during  the  year.
</TABLE>

The  amounts  of  time  certificates of deposit issued in amounts of $100,000 or
more as of December 31, 2000 are shown below by category, which is based on time
remaining until maturity of (1) three months or less, (2) over three through six
months,  (3)  over  six  through  twelve  months,  and  (4)  over twelve months.

                              (Dollars in Thousands)

  Three months or less             $ 3,069
  Over three through six months      7,453
  Over six through twelve months    10,326
  Over twelve months                 1,873
                                   -------
    Total                          $22,721
                                   =======


                                       18
<PAGE>
                    RETURN ON ASSETS AND STOCKHOLDERS' EQUITY

The  following  rate  of return information for the years indicated is presented
below.

<TABLE>
<CAPTION>
                          Years Ended December 31,
                               2000    1999
<S>                           <C>     <C>
  Return on assets (1)         0.74%   0.77%
  Return on equity (2)         6.71    6.19
  Dividend payout ratio (3)       -       -
  Equity to assets ratio (4)  11.01   12.52

<FN>
(1)  Net  income  divided  by  average  total  assets.
(2)  Net  income  divided  by  average  equity.
(3)  Dividends  declared  per  share  of  common stock divided by net income per
     share.
(4)  Average  equity  divided  by  average  total  assets.
</TABLE>


                                       19
<PAGE>
                          INDEPENDENT AUDITOR'S REPORT
================================================================================


TO  THE  BOARD  OF  DIRECTORS
FORSYTH  BANCSHARES,  INC.  AND  SUBSIDIARY
CUMMING,  GEORGIA


          We  have  audited  the  accompanying  consolidated  balance  sheets of
FORSYTH  BANCSHARES,  INC.  AND SUBSIDIARY as of December 31, 2000 and 1999, and
the  related  statements  of  income, comprehensive income (loss), stockholders'
equity, and cash flows for the years then ended.  These financial statements are
the  responsibility  of  the  Company's  management.  Our  responsibility  is to
express  an  opinion  on  these  financial  statements  based  on  our  audits.


          We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing  the  accounting  principles  used  and  significant estimates made by
management,  as well as evaluating the overall financial statement presentation.
We  believe  that  our  audits  provide  a  reasonable  basis  for  our opinion.


          In  our  opinion,  the  financial statements referred to above present
fairly,  in all material respects, the financial position of Forsyth Bancshares,
Inc.  and  subsidiary as of December 31, 2000 and 1999, and the results of their
operations  and  their  cash  flows for the years then ended, in conformity with
generally  accepted  accounting  principles.

                                     /s/  MAULDIN  &  JENKINS,  LLC



Atlanta,  Georgia
February  22,  2001


                                       20
<PAGE>
<TABLE>
<CAPTION>
                            FORSYTH BANCSHARES, INC.
                                 AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2000 AND 1999

=========================================================================================

                                                              ---------------------------
            ASSETS                                                2000          1999
                                                              ------------  -------------
<S>                                                           <C>           <C>
  Cash and due from banks                                     $ 2,575,341   $  1,958,658
  Interest-bearing deposits in banks                              171,383              -
  Federal funds sold                                            3,550,000      2,060,000
  Securities available-for-sale                                24,890,238     20,910,159
  Securities held-to-maturity, at cost (fair value of
     $857,417 and $922,840                                        857,144        932,579

  Loans                                                        48,318,792     38,554,138
  Less allowance for loan losses                                  603,723        481,930
                                                              ------------  -------------
         Loans, net                                            47,715,069     38,072,208

  Premises and equipment                                        1,574,678      1,051,136
  Other assets                                                  1,240,159      1,224,000
                                                              ------------  -------------

              TOTAL ASSETS                                    $82,574,012   $ 66,208,740
                                                              ============  =============

                     LIABILITIES AND STOCKHOLDERS' EQUITY

  Deposits
           Noninterest-bearing                                $ 8,570,534   $  6,214,719
           Interest-bearing                                    64,689,183     51,825,380
                                                              ------------  -------------
               Total deposits                                  73,259,717     58,040,099
  Other liabilities                                               485,692        461,554
                                                              ------------  -------------
                TOTAL LIABILITIES                              73,745,409     58,501,653
                                                              ------------  -------------

  Commitments and contingencies

  Stockholders' equity
          Common stock, no par value; 10,000,000 shares
                authorized; 800,000 issued and outstanding      7,960,341      7,960,341
           Retained earnings                                    1,008,780        459,735
           Accumulated other comprehensive loss                  (140,518)      (712,989)
                                                              ------------  -------------
                  TOTAL STOCKHOLDERS' EQUITY                    8,828,603      7,707,087
                                                              ------------  -------------

                  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $82,574,012   $ 66,208,740
                                                              ============  =============
</TABLE>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS.


                                       21
<PAGE>
<TABLE>
<CAPTION>
                            FORSYTH BANCSHARES, INC.
                                 AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

========================================================================================

                                                                 -----------------------
                                                                    2000         1999
                                                                 -----------  ----------
<S>                                                              <C>          <C>
  INTEREST INCOME
     Loans                                                       $4,417,053   $3,145,196
     Taxable securities                                           1,174,121    1,298,263
     Nontaxable securities                                           79,525       65,405
     Deposits in banks                                               17,306            -
     Federal funds sold                                             371,635      157,297
                                                                 -----------  ----------
            TOTAL INTEREST INCOME                                 6,059,640    4,666,161
                                                                 -----------  ----------

  INTEREST EXPENSE ON DEPOSITS                                    3,073,092    2,213,029
                                                                 -----------  ----------
            NET INTEREST INCOME                                   2,986,548    2,453,132
  PROVISION FOR LOAN LOSSES                                         135,213      170,818
                                                                 -----------  ----------
            NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES   2,851,335    2,282,314
                                                                 -----------  ----------

  OTHER INCOME
     Service charges on deposit accounts                            139,908      103,566
     Other operating income                                          25,385       18,256
     Net realized gains (losses) on sales of securities
            available-for-sale                                      (44,684)       7,089
                                                                 -----------  ----------
            TOTAL OTHER INCOME                                      120,609      128,911
                                                                 -----------  ----------

  OTHER EXPENSES
     Salaries and employee benefits                               1,099,840      830,537
     Equipment and occupancy expenses                               393,620      281,020
     Other operating expenses                                       682,203      600,104
                                                                 -----------  ----------
            TOTAL OTHER EXPENSES                                  2,175,663    1,711,661
                                                                 -----------  ----------

            INCOME BEFORE INCOME TAXES                              796,281      699,564

  INCOME TAX EXPENSE                                                247,236      214,332
                                                                 -----------  ----------

                   NET INCOME                                    $  549,045   $  485,232
                                                                 ===========  ==========
  EARNINGS PER SHARE                                             $     0.69   $     0.61
                                                                 ===========  ==========
</TABLE>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS.


                                       22
<PAGE>
<TABLE>
<CAPTION>
                            FORSYTH BANCSHARES, INC.
                                 AND SUBSIDIARY

             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

                                                                      -------------------------------------
                                                                             2000                1999
                                                                      ---------------  --------------------
<S>                                                                   <C>              <C>

  NET INCOME                                                          $       549,045  $           485,232
                                                                      ---------------  --------------------

  OTHER COMPREHENSIVE INCOME (LOSS):

       Unrealized gains (losses) on securities available-for-sale:

           Unrealized holding gains (losses) arising during period,
               net of tax (benefits) of $265,981 and $(404,070),
               respectively                                                   542,980             (784,370)

            Reclassification adjustment for (gains) losses realized
                in net income, net of tax of $15,193 and $2,410,
                respectively                                                   29,491               (4,679)
                                                                      ---------------  --------------------

  OTHER COMPREHENSIVE INCOME (LOSS)                                           572,471             (789,049)
                                                                      ---------------  --------------------

COMPREHENSIVE INCOME (LOSS)                                           $     1,121,516  $          (303,817)
                                                                      ===============  ====================
</TABLE>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS.


                                       23
<PAGE>
<TABLE>
<CAPTION>
                                   FORSYTH BANCSHARES, INC.
                                       AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                            YEARS ENDED DECEMBER 31, 2000 AND 1999

===============================================================================================================

                                       COMMON  STOCK                            ACCUMULATED
                                  -------------------------      RETAINED          OTHER              TOTAL
                                   SHARES       AT AMOUNT        EARNINGS      COMPREHENSIVE       STOCKHOLDERS'
                                                PAID-IN         (DEFICIT)       INCOME (LOSS)         EQUITY
                                  ---------  --------------  ---------------  ------------------  --------------
<S>                               <C>        <C>             <C>              <C>                 <C>
  BALANCE, DECEMBER 31, 1998        800,000  $    7,960,341  $      (25,497)  $          76,060   $   8,010,904
      Net income                          -               -         485,232                   -         485,232
      Other comprehensive loss            -               -               -            (789,049)       (789,049)
                                  ---------  --------------  ---------------  ------------------  --------------
  BALANCE, DECEMBER 31, 1999        800,000       7,960,341         459,735            (712,989)      7,707,087
      Net income                          -               -         549,045                   -         549,045
      Other comprehensive income          -               -               -             572,471         572,471
                                  ---------  --------------  ---------------  ------------------  --------------
  BALANCE, DECEMBER 31, 2000        800,000  $    7,960,341  $    1,008,780   $        (140,518)  $   8,828,603
                                  =========  ==============  ===============  ==================  ==============
</TABLE>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS.


                                       24
<PAGE>
<TABLE>
<CAPTION>
                            FORSYTH BANCSHARES, INC.
                                 AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

                                                                 ----------------------------
                                                                     2000           1999
                                                                 -------------  -------------
<S>                                                              <C>            <C>
  OPERATING ACTIVITIES
      Net income                                                 $    549,045   $    485,232
      Adjustments to reconcile net income to net cash
        provided by operating activities:
           Depreciation                                               201,929        124,833
           Provision for loan losses                                  135,213        170,818
           Deferred income taxes                                      (59,071)       (40,891)
           (Gain) loss on sale of securities available-for-sale        44,684         (7,089)
           Increase in interest receivable                           (223,435)       (98,181)
           Increase (decrease) in interest payable                    135,626        (32,992)
           Other operating activities                                (126,314)       154,718
                                                                 -------------  -------------

              Net cash provided by operating activities               657,677        756,448
                                                                 -------------  -------------

  INVESTING ACTIVITIES
      Net increase in interest-bearing deposits in banks             (171,383)             -
      Purchases of securities available-for-sale                   (7,020,562)   (11,747,136)
      Proceeds from maturities of securities available-for-sale       359,383      7,239,072
      Proceeds from sales of securities available-for-sale          3,490,061      2,259,688
      Proceeds from maturities of securities held-to-maturity          75,435        677,227
      Net (increase) decrease in Federal funds sold                (1,490,000)     6,120,000
      Net increase in loans                                        (9,778,074)   (11,067,562)
      Purchase of premises and equipment                             (725,472)      (232,762)
                                                                 -------------  -------------

              Net cash used in investing activities               (15,260,612)    (6,751,473)
                                                                 -------------  -------------

  FINANCING ACTIVITIES
      Net increase in deposits                                     15,219,618      6,627,655
                                                                 -------------  -------------

                Net cash provided by financing activities          15,219,618      6,627,655
                                                                 -------------  -------------

      Net increase in cash and due from banks                         616,683        632,630

      Cash and due from banks at beginning of year                  1,958,658      1,326,028
                                                                 -------------  -------------

      Cash and due from banks at end of year                     $  2,575,341   $  1,958,658
                                                                 =============  =============
</TABLE>


                                       25
<PAGE>
<TABLE>
<CAPTION>
                            FORSYTH BANCSHARES, INC.
                                 AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 2000 AND 1999
================================================================================

                                                  -----------------------
                                                     2000        1999
                                                  ----------  -----------
<S>                                               <C>         <C>
  SUPPLEMENTAL DISCLOSURES
       Cash paid for:
           Interest                                $2,937,466  $2,246,021

           Income taxes                            $  381,000  $  128,000
</TABLE>

SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS.


                                       26
<PAGE>
                    FORSYTH BANCSHARES, INC.  AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================

NOTE  1.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

             NATURE  OF  BUSINESS

               Forsyth  Bancshares,  Inc.  (the  "Company")  is  a  bank holding
               company  whose  business  is  conducted  by  its  wholly-owned
               subsidiary,  The  Citizens  Bank of Forsyth County, (the "Bank").
               The Bank is a commercial bank located in Cumming, Forsyth County,
               Georgia.  The  Bank  provides a full range of banking services in
               its  primary  market  area  of  Forsyth  County  and  surrounding
               counties.

             BASIS  OF  PRESENTATION

               The consolidated financial statements include the accounts of the
               Company and its subsidiary. Significant intercompany transactions
               and  accounts  are  eliminated  in  consolidation.

               The  preparation  of  financial  statements  in  conformity  with
               generally  accepted  accounting principles requires management to
               make  estimates  and assumptions that affect the reported amounts
               of  assets  and  liabilities as of the balance sheet date and the
               reported  amounts  of  revenues and expenses during the reporting
               period.  Actual  results  could  differ  from  those  estimates.
               Material  estimates  that  are  particularly  susceptible  to
               significant  change  in the near term relate to the determination
               of  the  allowance  for  loan losses, the valuation of foreclosed
               real  estate,  and  deferred  taxes.

             CASH,  DUE  FROM  BANKS  AND  CASH  FLOWS

               For  purposes  of  reporting  cash flows, cash and due from banks
               includes  cash  on  hand, cash items in process of collection and
               amounts  due  from  banks.  Cash  flows from loans, federal funds
               sold,  interest-bearing  deposits  in  banks  and  deposits  are
               reported  net.

               The Company maintains amounts due from banks which, at times, may
               exceed  federally insured limits. The Company has not experienced
               any  losses  in  such  accounts.

             SECURITIES

               Debt  securities  that  management  has  the  positive intent and
               ability  to  hold  to maturity are classified as held-to-maturity
               and  recorded  at  amortized  cost.  Securities not classified as
               held-to-maturity,  including  equity  securities  with  readily
               determinable  fair  values,  are classified as available-for-sale
               and  recorded  at  fair  value  with  unrealized gains and losses
               excluded  from  earnings  and  reported  in  other  comprehensive
               income.


                                       27
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE  1.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

             SECURITIES  (CONTINUED)

               Equity  securities, including restricted stock, without a readily
               determinable  fair value are classified as available-for-sale and
               recorded  at  cost.

               Interest  and  dividends,  including amortization of premiums and
               accretion  of discounts, are recognized in interest income. Gains
               and  losses  on  the  sale of securities are determined using the
               specific  identification  method.  Declines  in the fair value of
               held-to-maturity  and  available-for-sale  securities below their
               cost  that are deemed to be other than temporary are reflected in
               earnings  as  realized  losses.

             LOANS

               Loans are reported at their outstanding unpaid principal balances
               less the allowance for loan losses. Interest income is accrued on
               the  unpaid  balance.

               Nonrefundable loan fees and certain direct loan origination costs
               are deferred and recognized in income over the life of the loans.

               The  accrual  of  interest  on  loans  is  discontinued  when, in
               management's opinion, the borrower may be unable to meet payments
               as  they  become  due,  unless the loan is well-secured. Interest
               income on nonaccrual loans is subsequently recognized only to the
               extent  cash  payments are received until the loan is returned to
               accrual  status.

               The  allowance for loan losses is established through a provision
               for loan losses charged to expense. Loans are charged against the
               allowance  when  management  believes  the  collectibility of the
               principal  is unlikely. Subsequent recoveries are credited to the
               allowance.

               The  allowance  is  an  amount  that  management believes will be
               adequate  to  absorb  estimated losses in the loan portfolio. The
               allowance  for  loan  losses  is  evaluated on a regular basis by
               management  and is based upon management's periodic review of the
               collectibility  of  the  loans in light of historical experience,
               the  nature  and volume of the loan portfolio, adverse situations
               that  may affect the borrower's ability to repay, estimated value
               of  any underlying collateral and prevailing economic conditions.
               This evaluation is inherently subjective as it requires estimates
               that  are susceptible to significant revision as more information
               becomes  available.  In  addition,  regulatory  agencies,  as  an
               integral  part  of their examination process, periodically review
               the  Company's  allowance  for  loan  losses, and may require the
               Company  to  make  additions  to  the  allowance  based  on their
               judgment about information available to them at the time of their
               examinations.


                                       28
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE  1.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

             LOANS  (CONTINUED)

               A  loan  is  considered  impaired when it is probable the Company
               will be unable to collect all principal and interest payments due
               in  accordance  with the contractual terms of the loan agreement.
               Impaired  loans  are  measured  based  on  the  present  value of
               expected  future  cash  flows  discounted at the loan's effective
               interest  rate,  the  loan's observable market price, or the fair
               value  of the collateral if the loan is collateral dependent. The
               amount  of  impairment,  if  any,  and any subsequent changes are
               included  in  the  allowance  for  loan  losses.

             PREMISES  AND  EQUIPMENT

               Land  is  carried  at cost. Premises and equipment are carried at
               cost  less  accumulated  depreciation.  Depreciation  is computed
               principally by the straight-line method over the estimated useful
               lives  of  the  assets.

             OTHER  REAL  ESTATE  OWNED

               Other  real  estate  owned represents properties acquired through
               foreclosure.  Other  real  estate  owned  is held for sale and is
               carried  at  the lower of cost or fair value less estimated costs
               of disposal. Any write-down to fair value at the time of transfer
               to  other  real estate owned is charged to the allowance for loan
               losses.  Revenue  and expenses from operations and changes in the
               valuation  allowance are included in net expenses from foreclosed
               assets.  The  Company  had no other real estate owned at December
               31,  2000  or  1999.

             TRANSFERS  OF  FINANCIAL  ASSETS

               Transfers  of  financial  assets  are accounted for as sales when
               control  over  the  assets  has  been  surrendered.  Control over
               transferred  assets  is  deemed  to  be  surrendered when (1) the
               assets  have  been  isolated from the Company, (2) the transferee
               obtains  the  right  (free  of  conditions that constrain it from
               taking  advantage  of  that  right)  to  pledge  or  exchange the
               transferred  assets,  and  (3)  the  Company  does  not  maintain
               effective  control  over  the  transferred  assets  through  an
               agreement  to  repurchase  them  before  their  maturity.


                                       29
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE  1.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

             INCOME  TAXES

               Deferred  income  tax assets and liabilities are determined using
               the balance sheet method. Under this method, the net deferred tax
               asset  or liability is determined based on the tax effects of the
               temporary  differences  between  the  book  and  tax bases of the
               various  balance  sheet  assets and liabilities and gives current
               recognition  to  changes  in  tax  rates  and  laws.

             STOCK  COMPENSATION  PLANS

               Statement  of  Financial  Accounting  Standards ("SFAS") No. 123,
               Accounting  for Stock-Based Compensation, encourages all entities
               to  adopt  a  fair  value based method of accounting for employee
               stock  compensation  plans, whereby compensation cost is measured
               at  the  grant  date  based  on  the  value  of  the award and is
               recognized  over the service period, which is usually the vesting
               period. However, it also allows an entity to measure compensation
               cost  for  those  plans using the intrinsic value based method of
               accounting  prescribed by Accounting Principles Board Opinion No.
               25,  Accounting  for  Stock  Issued  to  Employees,  whereby
               compensation  cost  is  the  excess, if any, of the quoted market
               price  of the stock at the grant date (or other measurement date)
               over  the amount an employee must pay to acquire the stock. Stock
               options  to  be issued under the Company's stock option plan will
               have  no intrinsic value at the grant date, and under Opinion No.
               25  no compensation cost will be recognized for them. The Company
               has  elected  to measure compensation cost in accordance with the
               accounting  methodology  in  Opinion  No.  25.

             EARNINGS  PER  SHARE

               Basic  earnings  per share are computed by dividing net income by
               the  weighted-average  number  of  shares  of  common  stock
               outstanding.  Diluted  earnings  per  share  would be computed by
               dividing  net income by the sum of the weighted-average number of
               shares  of  common stock outstanding and potential common shares.
               There were no potential common shares outstanding at December 31,
               2000  or  1999. The weighted average number of shares outstanding
               for  the  years  ended  December  31,  2000 and 1999 was 800,000.

             COMPREHENSIVE  INCOME

               Accounting  principles generally require that recognized revenue,
               expenses,  gains  and  losses be included in net income. Although
               certain  changes  in  assets  and liabilities, such as unrealized
               gains  and  losses on available-for-sale securities, are reported
               as  a  separate  component  of  the equity section of the balance
               sheet,  such  items,  along  with  net  income, are components of
               comprehensive  income.


                                       30
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE  1.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

             RECENT  DEVELOPMENTS

               In  June  1998,  the  Financial Accounting Standards Board issued
               SFAS  No.  133, Accounting for Derivative Instruments and Hedging
               Activities,  effective  for fiscal years beginning after June 15,
               2000.  This  Statement  establishes  accounting  and  reporting
               standards  for  derivative  instruments  and  hedging activities,
               including  certain  derivative  instruments  embedded  in  other
               contracts,  and requires that an entity recognize all derivatives
               as assets or liabilities in the balance sheet and measure them at
               fair value. If certain conditions are met, an entity may elect to
               designate a derivative as follows: (a) a hedge of the exposure to
               changes  in  the fair value of a recognized asset or liability or
               an  unrecognized  firm commitment, (b) a hedge of the exposure to
               variable  cash  flows of a forecasted transaction, or (c) a hedge
               of  the  foreign  currency  exposure  of  an  unrecognized  firm
               commitment,  an  available-for-sale  security, a foreign currency
               denominated  forecasted  transaction,  or  a  net investment in a
               foreign  corporation.  The  Statement  generally  provides  for
               matching  the  timing  of  the recognition of the gain or loss on
               derivatives  designated  as  hedging  instruments  with  the
               recognition  of  the  changes in the fair value of the item being
               hedged.  Depending on the type of hedge, such recognition will be
               in  either  net  income  or  other  comprehensive  income.  For a
               derivative  not  designated  as  a hedging instrument, changes in
               fair  value  will  be  recognized  in net income in the period of
               change. Management is currently evaluating the impact of adopting
               this  Statement  on  the  financial  statements,  but  does  not
               anticipate  that  it  will  have  a  material  impact.


                                       31
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE  2.     SECURITIES

             The amortized cost and fair value of securities are summarized as
             follows:

<TABLE>
<CAPTION>
                                                 GROSS         GROSS
                                   AMORTIZED   UNREALIZED    UNREALIZED      FAIR
                                     COST         GAINS        LOSSES        VALUE
                                  -----------  -----------  ------------  -----------
<S>                               <C>          <C>          <C>           <C>
SECURITIES AVAILABLE-FOR-SALE
  DECEMBER 31, 2000:
  U. S. GOVERNMENT AND AGENCY
    SECURITIES                    $12,557,851  $    10,285  $   (57,741)  $12,510,395
  STATE AND MUNICIPAL SECURITIES    1,849,300            -      (47,819)    1,801,481
  CORPORATE SECURITIES              4,362,091            -      (43,415)    4,318,676
  MORTGAGE-BACKED SECURITIES        6,161,938            -      (87,952)    6,073,986
  RESTRICTED EQUITY SECURITIES        185,700            -            -       185,700
                                  -----------  -----------  ------------  -----------
                                  $25,116,880  $    10,285  $  (236,927)  $24,890,238
                                  ===========  ===========  ============  ===========

  December 31, 1999:
  U. S. Government and agency
    securities                    $16,184,104  $         -  $  (683,822)  $15,500,282
  State and municipal securities    1,851,280            -     (200,168)    1,651,112
  Mortgage-backed securities        3,955,062            -     (196,297)    3,758,765
                                  -----------  -----------  ------------  -----------
                                  $21,990,446  $         -  $(1,080,287)  $20,910,159
                                  ===========  ===========  ============  ===========

  SECURITIES HELD-TO-MATURITY
  DECEMBER 31, 2000:
  U. S. GOVERNMENT AND AGENCY
    SECURITIES                    $   499,988  $       162  $         -   $   500,150
  MORTGAGE-BACKED SECURITIES          357,156          111            -       357,267
                                  -----------  -----------  ------------  -----------
                                  $   857,144  $       273  $         -   $   857,417
                                  ===========  ===========  ============  ===========

  December 31, 1999:
  U. S. Government and agency
    securities                    $   499,965  $         -  $    (4,565)  $   495,400
  Mortgage-backed securities          432,614            -       (5,174)      427,440
                                  -----------  -----------  ------------  -----------
                                  $   932,579  $         -  $    (9,739)  $   922,840
                                  ===========  ===========  ============  ===========
</TABLE>


                                       32
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE  2.     SECURITIES  (CONTINUED)

               Securities  with a carrying value of $3,174,000 and $2,922,000 at
               December  31, 2000 and 1999, respectively, were pledged to secure
               public  deposits  and for other purposes required or permitted by
               law.

               The  amortized  cost  and  fair  value  of  debt securities as of
               December  31,  2000  by  contractual  maturity  are  shown below.
               Maturities  may  differ  from  contractual  maturities  of
               mortgage-backed  securities  because the mortgages underlying the
               securities  may  be  called or repaid without penalty. Therefore,
               these  securities  are not included in the maturity categories in
               the  following  summary.

<TABLE>
<CAPTION>
                         SECURITIES AVAILABLE-FOR-SALE  SECURITIES HELD-TO-MATURITY
                         -----------------------------  ---------------------------
                               AMORTIZED      FAIR      AMORTIZED     FAIR
                                 COST         VALUE        COST      VALUE
                              -----------  -----------  ----------  --------
<S>                           <C>          <C>          <C>         <C>
  Due within one year         $ 2,014,590  $ 1,006,752  $        -  $      -
  Due from one to five years    8,723,205    8,694,376     499,988   500,150
  Due from five to ten years    6,575,363    6,511,813           -         -
  Due after ten years           1,456,084    1,417,611           -         -
  Mortgage-backed securities    6,161,938    6,073,986     357,156   357,267
                              -----------  -----------  ----------  --------
                              $24,931,180  $23,704,538  $  857,144  $857,417
                              ===========  ===========  ==========  ========
</TABLE>

               Gross  gains and losses on sales of securities available-for-sale
               consist  of  the  following:

<TABLE>
<CAPTION>
                                 YEARS ENDED DECEMBER 31,
                                 ------------ -----------
                                     2000      1999
                                 -----------  -----------
<S>                              <C>          <C>
  Gross gains                    $        -   $    7,253
                                 -----------  -----------
  Gross losses                      (44,684)        (164)
  Net realized gains (losses)    $  (44,684)  $    7,089
                                 ===========  ===========
</TABLE>


                                       33
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================


NOTE  3.     LOANS

             The  composition  of  loans  is  summarized  as  follows:

<TABLE>
<CAPTION>
                                                       DECEMBER 31,
                                                 --------------------------
                                                     2000          1999
                                                 ------------  ------------
<S>                                              <C>           <C>
        Commercial, financial, and agricultural  $ 7,553,000   $ 7,520,000
        Real estate - construction                 8,229,000     5,419,000
        Real estate - mortgage                    23,569,000    18,276,000
        Consumer installment and other             8,967,792     7,339,138
                                                 ------------  ------------
                                                  48,318,792    38,554,138
        Allowance for loan losses                   (603,723)     (481,930)
                                                 ------------  ------------
        Loans, net                               $47,715,069   $38,072,208
                                                 ============  ============
</TABLE>

              Changes  in  the  allowance  for  loan  losses  are  as  follows:

<TABLE>
<CAPTION>
                                            YEARS ENDED DECEMBER 31,
                                              ---------  ---------
                                                2000       1999
                                              ---------  ---------
<S>                                           <C>        <C>
  Balance, beginning of year                  $481,930   $360,052
  Provision for loan losses                    135,213    170,818
  Loans charged off                            (14,017)   (51,193)
  Recoveries of loans previously charged off       597      2,253
                                              ---------  ---------
  Balance, end of year                        $603,723   $481,930
                                              =========  =========
</TABLE>

     The  total recorded investment in impaired loans was $15,077 and $23,457 at
     December 31, 2000 and 1999, respectively. There were no impaired loans that
     had  related  allowances  determined  in  accordance  with  SFAS  No.  114,
     Accounting  by Creditors for Impairment of a Loan, at December 31, 2000 and
     1999.  The  average recorded investment in impaired loans for 2000 and 1999
     was  $18,121  and  $25,268.  Interest  income  recognized for cash payments
     received  on  impaired  loans was not material for the years ended December
     31,  2000  and  1999.

     In  the  ordinary  course  of  business,  the  Company has granted loans to
     certain related parties, including directors, executive officers, and their
     affiliates.  The  interest rates on these loans were substantially the same
     as  rates prevailing at the time of the transaction and repayment terms are
     customary for the type of loan. Changes in related party loans for the year
     ended  December  31,  2000  are  as  follows:

  Balance, beginning of year  $ 3,424,016
  Advances                      7,947,882
  Repayments                   (6,604,263)
                              ------------
  Balance, end of year        $ 4,767,635
                              ============


                                       34
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE  4.     PREMISES  AND  EQUIPMENT

              Premises  and  equipment  are  summarized  as  follows:

<TABLE>
<CAPTION>
                                             DECEMBER 31,
                                        -----------  -----------
                                           2000         1999
                                        -----------  -----------
<S>                                     <C>          <C>
Land                                    $  845,359   $  607,892
                                        -----------  -----------
Buildings                                  295,451            -
Equipment                                  646,148      482,069
Leasehold improvements                     131,302      119,592
Construction in progress,
   estimated cost to complete $320,000      76,229      161,909
                                        -----------  -----------
                                         1,994,489    1,371,462
Accumulated depreciation                  (419,811)    (320,326)
                                        -----------  -----------
                                        $1,574,678   $1,051,136
                                        ===========  ===========
</TABLE>

NOTE  5.      DEPOSITS

              The aggregate amount of time deposits in denominations of $100,000
              or  more  at  December  31,  2000  and  1999  was  $22,721,244 and
              $16,843,202,  respectively.  The  scheduled  maturities  of  time
              deposits  at  December  31,  2000  are  as  follows:

2001                                                   $42,378,188
2002                                                     2,651,785
2003                                                       470,980
2004                                                       196,047
2005                                                     1,814,641
                                                       -----------
                                                        47,511,641
                                                       ===========

NOTE  6.      KEY  EMPLOYEE  INCENTIVE  PLAN

              In  2000,  the Company adopted an incentive plan that provides for
              the  issuance  of  stock options to key employees. The Company has
              reserved  80,000  shares  of  common  stock  for  this purpose. No
              options  have  been  granted  as  of  December  31,  2000.


                                       35
<PAGE>
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE  7.     INCOME  TAXES

             Income  tax  expense  consists  of  the  following:

<TABLE>
<CAPTION>
                               YEARS ENDED DECEMBER 31,
                                 --------------------
                                   2000       1999
                                 ---------  ---------
<S>                              <C>        <C>
  Current                        $306,307   $255,223
  Deferred                        (59,071)   (34,596)
  Change in valuation allowance         -     (6,295)
                                 ---------  ---------
      Income tax expense         $247,236   $214,332
                                 =========  =========
</TABLE>

              The Company's income tax expense differs from the amounts computed
              by  applying  the  Federal  income  tax  statutory rates to income
              before  income  taxes.  A  reconciliation of the differences is as
              follows:

<TABLE>
<CAPTION>
                                          YEARS ENDED DECEMBER 31,
                                  ----------------------------------------
                                         2000                  1999
                                  -------------------  -------------------
                                   AMOUNT    PERCENT    AMOUNT    PERCENT
                                  ---------  --------  ---------  --------
<S>                               <C>        <C>       <C>        <C>
Income taxes at statutory rate    $270,736        34%  $237,852        34%
  Change in valuation allowance          -         -     (6,295)       (1)
  Nontaxable interest              (21,735)       (3)   (22,481)       (3)
  Other items, net                  (1,765)        -      5,256         1
                                  ---------  --------  ---------  --------
Income tax expense                $247,236        31%  $214,332        31%
                                  =========  ========  =========  ========
</TABLE>

              The  components  of  deferred  income  taxes  are  as  follows:

<TABLE>
<CAPTION>
                                              DECEMBER 31,
                                           ------------------
                                             2000      1999
                                           --------  --------
<S>                                        <C>       <C>
   Deferred tax assets:
        Loan loss reserves                 $177,674  $118,191
        Depreciation                         30,592    11,259
        Preopening and organization costs    20,197    38,975
        Securities available-for-sale        86,124   367,298
        Other                                 1,276     2,243
                                           --------  --------
   Net deferred tax assets                 $315,863  $537,966
                                           ========  ========
</TABLE>


                                       36
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE  8.      COMMITMENTS  AND  CONTINGENCIES

              The  Company  is  party  to financial instruments with off-balance
              sheet  risk in the normal course of business to meet the financing
              needs  of  its  customers.  These  financial  instruments  include
              commitments  to  extend credit and standby letters of credit. They
              involve,  to varying degrees, elements of credit risk and interest
              rate  risk  in  excess  of  the  amount  recognized in the balance
              sheets.

              The  Company's  exposure  to  credit  loss  in  the  event  of
              nonperformance  by the other party to the financial instrument for
              commitments  to  extend  credit  and  standby letters of credit is
              represented  by  the  contractual amount of those instruments. The
              Company  uses  the  same credit policies in making commitments and
              conditional  obligations  as  it  does  for  on-balance  sheet
              instruments. A summary of the Company's commitments is as follows:

<TABLE>
<CAPTION>
                                       DECEMBER 31,
                                ----------------------
                                   2000        1999
                                ----------  ----------
<S>                             <C>         <C>
  Commitments to extend credit  $9,667,000  $6,115,000
  Standby letters of credit        156,000      75,000
                                ----------  ----------
                                $9,823,000  $6,190,000
                                ==========  ==========
</TABLE>

              Commitments  to extend credit are agreements to lend to a customer
              as  long  as there is no violation of any condition established in
              the contract. Since many of the commitments are expected to expire
              without  being  drawn  upon,  the  total commitment amounts do not
              necessarily  represent  future  cash  requirements.  The  Company
              evaluates  each  customer's  creditworthiness  on  a  case-by-case
              basis.  The  amount of collateral obtained, if deemed necessary by
              the  Company  upon  extension  of credit, is based on management's
              credit  evaluation  of  the  customer.

              Standby  letters  of  credit are conditional commitments issued by
              the  Company to guarantee the performance of a customer to a third
              party. Those guarantees are primarily issued to support public and
              private  borrowing  arrangements.  The  credit  risk  involved  in
              issuing letters of credit is essentially the same as that involved
              in  extending  loans  to  customers.  Collateral  is  required  in
              instances  which  the  Company  deems  necessary.

              In  the  normal  course  of  business,  the Company is involved in
              various  legal  proceedings.  In  the  opinion  of management, any
              liability  resulting  from  such  proceedings  would  not  have  a
              material  effect  on  the  Company's  financial  statements.

              The Company leases its main office and operation center facilities
              under noncancelable operating lease agreements. The leases require
              the  payment  of normal maintenance utilities and insurance on the
              property.  The  Company  also  leases  various  other  equipment.


                                       37
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE  8.      COMMITMENTS  AND  CONTINGENCIES  (CONTINUED)

              The total minimum rental commitment at December 31, 2000 is due as
              follows:

          During the years ending December 31:
             2001                                                89,272
             2002                                                87,222
             2003                                                75,972
             2004                                                75,972
             2005                                                75,972
                                                              ---------
                                                              $ 404,410
                                                              =========

              The total rental expense for the years ended December 31, 2000 and
              1999  was  $78,097  and  $73,507,  respectively.

NOTE  9.      CONCENTRATIONS  OF  CREDIT

              The  Company  originates  primarily  commercial,  residential, and
              consumer  loans  to  customers  in  Forsyth County and surrounding
              counties.  The  ability of the majority of the Company's customers
              to  honor  their  contractual loan obligations is dependent on the
              economy  in  these  areas.

              Sixty-six  percent of the Company's loan portfolio is concentrated
              in loans secured by real estate, of which a substantial portion is
              secured  by  real  estate  in  the  Company's primary market area.
              Accordingly,  the ultimate collectibility of the loan portfolio is
              susceptible  to  changes  in  market  conditions  in the Company's
              primary  market  area.  The  other  significant  concentrations of
              credit  by  type  of  loan  are  set  forth  in  Note  3.

              The  Company,  as  a  matter  of policy, does not generally extend
              credit  to  any  single  borrower or group of related borrowers in
              excess  of  25% of statutory capital, or approximately $1,625,000.


                                       38
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE  10.     REGULATORY  MATTERS

              The  Bank  is  subject  to  certain  restrictions on the amount of
              dividends  that may be declared without prior regulatory approval.
              At  December 31, 2000, approximately $288,000 of retained earnings
              were  available  for  dividend  declaration  without  regulatory
              approval.

              The Company and the Bank are subject to various regulatory capital
              requirements administered by the federal banking agencies. Failure
              to  meet  minimum  capital  requirements  can  initiate  certain
              mandatory,  and  possibly  additional  discretionary  actions  by
              regulators  that,  if  undertaken,  could  have  a direct material
              effect  on  the  financial  statements.  Under  capital  adequacy
              guidelines  and  the  regulatory  framework  for prompt corrective
              action, the Company and Bank must meet specific capital guidelines
              that involve quantitative measures of the assets, liabilities, and
              certain  off-balance  sheet  items  as calculated under regulatory
              accounting  practices.  The capital amounts and classification are
              also  subject  to  qualitative  judgments  by the regulators about
              components,  risk weightings, and other factors. Prompt corrective
              provisions  are  not  applicable  to  bank  holding  companies.

              Quantitative  measures established by regulation to ensure capital
              adequacy  require  the  Company  and  the Bank to maintain minimum
              amounts  and  ratios  of Total and Tier I capital to risk-weighted
              assets  and  of  Tier  I  capital  to  average  assets. Management
              believes,  as  of  December 31, 2000, the Company and the Bank met
              all  capital  adequacy  requirements  to  which  they are subject.

              As  of  December  31,  2000, the most recent notification from the
              Federal Deposit Insurance Corporation categorized the Bank as well
              capitalized  under  the regulatory framework for prompt corrective
              action.  To  be  categorized  as  well  capitalized, the Bank must
              maintain  minimum  Total risk-based, Tier I risk-based, and Tier I
              leverage  ratios as set forth in the following table. There are no
              conditions  or  events  since  that  notification  that management
              believes  have  changed  the  Bank's  category.


                                       39
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE  10.     REGULATORY  MATTERS  (CONTINUED)

              The  Company  and  Bank's  actual  capital  amounts and ratios are
              presented  in  the  following  table:

<TABLE>
<CAPTION>
                                                                          TO BE WELL
                                                         FOR CAPITAL  CAPITALIZED UNDER
                                                          ADEQUACY    PROMPT CORRECTIVE
                                          ACTUAL          PURPOSES    ACTION PROVISIONS
                                     ---------------  ---------------  ----------------
                                     AMOUNT   RATIO   AMOUNT   RATIO   AMOUNT   RATIO
                                     -------  ------  -------  ------  -------  -------
                                                 (DOLLARS IN THOUSANDS)
                                     -------------------------------------------------
<S>                                  <C>      <C>     <C>      <C>     <C>      <C>
   AS OF DECEMBER 31, 2000:
   TOTAL CAPITAL TO RISK WEIGHTED
   ASSETS:
       CONSOLIDATED                  $ 8,868  18.63%  $ 3,809      8%  $  N/A    N/A
       BANK                          $ 8,802  18.49%  $ 3,808      8%  $4,760    10%
  TIER I CAPITAL TO RISK WEIGHTED
  ASSETS:
       CONSOLIDATED                  $ 8,347  17.53%  $ 1,905      4%  $  N/A    N/A
       BANK                          $ 8,281  17.40%  $ 1,904      4%  $2,856     6%
  TIER I CAPITAL TO AVERAGE ASSETS:
       CONSOLIDATED                  $ 8,347  11.71%  $ 2,853      4%  $  N/A    N/A
       BANK                          $ 8,281  11.62%  $ 2,852      4%  $3,565     5%

As of December 31, 1999:
Total Capital to Risk Weighted
Assets:
     Consolidated                    $ 8,902  20.60%  $ 3,458      8%  $  N/A    N/A
     Bank                            $ 7,588  17.90%  $ 3,392      8%  $4,240    10%
Tier I Capital to Risk Weighted
Assets:
     Consolidated                    $ 8,420  19.48%  $ 1,729      4%  $  N/A    N/A
     Bank                            $ 7,106  16.76%  $ 1,696      4%   $2,544    6%
Tier I Capital to Average Assets:
     Consolidated                    $ 8,420  12.87%  $ 2,617      4%  $  N/A    N/A
     Bank                            $ 7,106  11.00%  $ 2,584      4%  $3,230     5%
</TABLE>


                                       40
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE  11.     FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS

              The  fair  value  of  a financial instrument is the current amount
              that  would  be exchanged between willing parties, other than in a
              forced  liquidation.  Fair  value  is  best  determined based upon
              quoted  market  prices.  However,  in many instances, there are no
              quoted  market  prices  for  the  Company's  various  financial
              instruments.  In  cases  where  quoted  market  prices  are  not
              available,  fair values are based on estimates using present value
              or  other valuation techniques. Those techniques are significantly
              affected  by the assumptions used, including the discount rate and
              estimates  of  future  cash  flows.  Accordingly,  the  fair value
              estimates  may  not  be realized in an immediate settlement of the
              instrument.  SFAS  No.  107,  Disclosures  about  Fair  Values  of
              Financial  Instruments, excludes certain financial instruments and
              all  nonfinancial  instruments  from  its disclosure requirements.
              Accordingly,  the  aggregate  fair value amounts presented may not
              necessarily  represent  the  underlying fair value of the Company.

              CASH,  DUE  FROM  BANKS,  INTEREST-BEARING  DEPOSITS  IN BANKS AND
              FEDERAL  FUNDS  SOLD:

              The  carrying  amounts  of  cash, due from banks, interest-bearing
              deposits  in banks and federal funds sold approximate fair values.

              AVAILABLE-FOR-SALE  AND  HELD-TO-MATURITY  SECURITIES:

              Fair  values  for  securities are based on available quoted market
              prices.  The  carrying values of equity securities with no readily
              determinable  fair  value  approximates  fair  value.

            LOANS:

              For  variable-rate  loans  that  reprice  frequently  and  have no
              significant  change  in  credit  risk,  fair  values  are based on
              carrying  values.  For  other loans, the fair values are estimated
              using  discounted  cash  flow  analyses,  using  interest  rates
              currently  being offered for loans with similar terms to borrowers
              with  similar  credit  quality. Fair values for impaired loans are
              estimated  using  discounted  cash  flow  analyses  or  underlying
              collateral  values.

           DEPOSITS:

              The  carrying  amounts  of  demand deposits, savings deposits, and
              variable-rate  certificates  of  deposit  approximate  their  fair
              values.  Fair  values  for  fixed-rate certificates of deposit are
              estimated  using  a  discounted cash flow calculation that applies
              interest  rates  currently  being  offered  on  certificates  to a
              schedule  of  aggregated  expected  monthly  maturities  on  time
              deposits.


                                       41
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE  11.     FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS  (CONTINUED)

            ACCRUED INTEREST:

              The  carrying  amounts  of accrued interest approximate their fair
              values.

          OFF-BALANCE  SHEET  INSTRUMENTS:

              Fair  values  of  the  Company's  off-balance  sheet  financial
              instruments  are  based  on  fees  currently charged to enter into
              similar  agreements.  Since  the  majority  of  the  Company's
              off-balance  sheet  instruments  consist  of  nonfee-producing,
              variable-rate  commitments, the Company has determined they do not
              have  a  distinguishable  fair  value.

              The  carrying  amount  and  estimated fair values of the Company's
              financial  instruments  are  as  follows:

<TABLE>
<CAPTION>
                                     DECEMBER 31, 2000         DECEMBER 31, 1999
                                 ------------------------  ------------------------
                                  CARRYING       FAIR       CARRYING       FAIR
                                   AMOUNT        VALUE       AMOUNT        VALUE
                                 -----------  -----------  -----------  -----------
<S>                              <C>          <C>          <C>          <C>
Financial assets:
  Cash, due from banks,
  interest-
    bearing deposits in banks,
    and federal funds sold       $ 6,296,724  $ 6,296,724  $ 4,018,658  $ 4,018,658
  Securities available-for-sale   24,890,238   24,890,238   20,910,159   20,910,159
  Securities held-to-maturity        857,144      857,417      932,579      922,840
  Loans                           47,715,069   47,667,813   38,072,208   38,135,379
  Accrued interest receivable        883,070      883,070      659,635      659,635

Financial liabilities:
  Deposits                       $73,259,717  $73,493,907  $58,040,099  $57,894,421
  Accrued interest payable           365,039      365,039      229,413      229,413
</TABLE>


                                       42
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE  12.     SUPPLEMENTAL  FINANCIAL  DATA

              Components  of other operating expenses in excess of 1% of revenue
              are  as  follows:

<TABLE>
<CAPTION>
                   YEARS ENDED DECEMBER 31,
                   -----------------------
                       2000      1999
                     --------  --------
<S>                  <C>       <C>
  Professional fees  $183,359  $211,386
  Data processing     174,879   154,866
</TABLE>

NOTE  13.     PARENT  COMPANY  FINANCIAL  INFORMATION

              The  following  information presents the condensed balance sheets,
              statements  of  income, and cash flows of Forsyth Bancshares, Inc.
              as  of  and  for  the  years  ended  December  31,  2000 and 1999:

<TABLE>
<CAPTION>
                  CONDENSED BALANCE SHEETS

                                     2000        1999
                                  ----------  -----------
<S>                               <C>         <C>
 ASSETS
        Cash                      $  296,310  $  494,075
        Investment in subsidiary   7,292,360   6,393,053
        Premises and equipment     1,199,963     769,801
        Other assets                  39,970      50,158
                                  ----------  -----------
        TOTAL ASSETS              $8,828,603  $7,707,087
                                  ==========  ===========
        STOCKHOLDERS' EQUITY      $8,828,603  $7,707,087
                                  ==========  ===========
</TABLE>


                                       43
<PAGE>
<TABLE>
<CAPTION>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE  13.     PARENT  COMPANY  FINANCIAL  INFORMATION  (CONTINUED)

                         CONDENSED STATEMENTS OF INCOME

                                                           2000       1999
                                                         ---------  ---------
<S>                                                      <C>        <C>
      INCOME:
           Interest income                               $ 11,132   $ 21,273
           Dividends from subsidiary                      250,000          -
           Rental income from subsidiary                   30,000          -
                                                         ---------  ---------
                                                          291,132     21,273
                                                         ---------  ---------
      EXPENSES:
           Depreciation                                    17,076          -
           Other expenses                                  72,159     77,140
                                                         ---------  ---------
                                                           89,235     77,140
                                                         ---------  ---------
        INCOME (LOSS) BEFORE INCOME TAX BENEFITS
        AND EQUITY IN UNDISTRIBUTED INCOME
        OF SUBSIDIARY                                     201,897    (55,867)
           INCOME TAX BENEFITS                            (20,312)   (25,290)
                                                         ---------  ---------
        INCOME (LOSS) BEFORE EQUITY IN UNDISTRIBUTED
        INCOME OF SUBSIDIARY                              222,209    (30,577)

           EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARY   326,836    515,809
                                                         ---------  ---------
        NET INCOME                                       $549,045   $485,232
                                                         =========  =========
</TABLE>


                                       44
<PAGE>
<TABLE>
<CAPTION>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

================================================================================

NOTE  13.     PARENT  COMPANY  FINANCIAL  INFORMATION  (CONTINUED)

                       CONDENSED STATEMENTS OF CASH FLOWS

                                                             2000        1999
                                                          ----------  ----------
<S>                                                       <C>         <C>
        OPERATING ACTIVITIES
        Net income                                        $ 549,045   $ 485,232
        Adjustments to reconcile net income to net cash
        provided by (used in) operating activities:
            Depreciation                                     17,076           -
            Undistributed income of subsidiary             (326,836)   (515,809)
            Other operating activities                       10,188        (860)
                                                          ----------  ----------
          NET CASH PROVIDED BY (USED IN)
             OPERATING ACTIVITIES                           249,473     (31,437)
                                                          ----------  ----------
        INVESTING ACTIVITIES
        Purchase of premises and equipment                 (447,238)   (161,909)
                                                          ----------  ----------
        NET CASH USED IN INVESTING ACTIVITIES              (447,238)   (161,909)
                                                          ----------  ----------

        Net decrease in cash                               (197,765)   (193,346)

        Cash at beginning of year                           494,075     687,421
                                                          ----------  ----------
        Cash at end of year                               $ 296,310   $ 494,075
                                                          ==========  ==========
</TABLE>


                                       45
<PAGE>