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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                            ------------------------

                                  FORM 10-KSB
                                ---------------

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

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000     COMMISSION FILE NUMBER 333-12293

                            ------------------------

                             PEOPLES BANCORP, INC.
                 (Name of small business issuer in its charter)

<TABLE>
<S>                                         <C>
                 GEORGIA                                    58-2265412
         (State of Incorporation)              (I.R.S. Employer Identification No.)
</TABLE>

                        119 MAPLE STREET, CARROLLTON, GA
                    (Address of principal executive office)

                                     30117
                                   (Zip Code)

                                 (770) 838-9608
                (Issuer's telephone number, including area code)

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
        SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

    Check whether Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.  Yes /X/  No / /

    Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B in this form, and will not be contained, to the best of
Registrant's knowledge, in definitive Proxy or Information Statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. /X/

    Registrant's revenues for its fiscal year ended December 31, 2000 were
$5,276,367.

    The aggregate market value of the voting stock held by non-affiliates of the
Registrant at March 5, 2001 was $4,081,140 based on the initial offering price
of $10.00 per share, although there is no established trading market.

    There were 800,000 shares of Registrant's common stock outstanding at
March 5, 2001.

                   DOCUMENTS INCORPORATED BY REFERENCE: NONE.

    Transitional Small Business Disclosure Format (check one): Yes / /  No /X/

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                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

    (a) BUSINESS DEVELOPMENT

    Peoples Bancorp, Inc. (the "Company" or "We" or "Our"), Carrollton, Georgia,
was incorporated as a Georgia business corporation for the purpose of becoming a
bank holding company by acquiring all of the common stock of Peoples Bank of
West Georgia, Carrollton, Georgia (the "Bank") upon its formation. The Company
filed applications to the Board of Governors of the Federal Reserve System (the
"Board") and the Georgia Department of Banking and Finance (the "DBF") for prior
approval to become a bank holding company. The Company received Board approval
on December 30, 1996, and the DBF approval on December 18, 1996. The Company
became a bank holding company within the meaning of the federal Bank Holding
Company Act (the "Act") and the Georgia bank holding company law (the "Georgia
Act") on March 3, 1997. The Bank currently is the sole operating subsidiary of
the Company. On October 11, 1996, the Bank received the approval of its Articles
of incorporation from the DBF and its permit to begin business was issued by the
DBF on February 28, 1997. The Bank opened for business on March 3, 1997. The
deposits at the Bank are insured by the Federal Deposit Insurance Corporation
(the "FDIC").

    (b) BUSINESS OF ISSUER

    The Bank conducts a general commercial banking business in its primary
service area, emphasizing the banking needs of individuals and small-  to
medium-sized businesses. The Company and the Bank conduct business from the main
office located at 119 Maple Street, Carrollton, Georgia 30117. The Bank has also
opened a branch office at 6670 Church Street in Douglasville, Georgia and is
operating a loan production office in Villa Rica, Georgia with plans to open a
full service branch in 2001 to be located at 485 Bankhead Highway, Villa Rica,
Georgia. As of December 31, 2000, the Company and the Bank had consolidated
total assets of approximately $67.2 million, total deposits of approximately
$52.3 million and total stockholders' equity of approximately $8.3 million.

    The Company is authorized to engage in any activity permitted by law to a
corporation, subject to applicable Federal regulatory restrictions on the
activities of bank holding companies. The Company was formed for the purpose of
becoming a holding company to own 100% of the stock of the Bank. The holding
company structure provides the Company with greater flexibility than the Bank,
while the Company has no present plans to engage actively in any nonbanking
business activities, management anticipates studying the feasibility of
establishing or acquiring subsidiaries to engage in other business activities to
the extent permitted by law.

    The principal business of the Bank is to accept deposits from the public and
to make loans and other investments in and around Carroll County and Douglas
County, Georgia, its primary service area.

    The Bank offers a full range of deposit services that are typically
available from financial institutions, including NOW accounts, demand, savings
and other time deposits. In addition, retirement accounts such as Individual
Retirement Accounts are available. All deposit accounts are insured by the FDIC
up to the maximum amount currently permitted by law.

    The Bank offers a full range of commercial and consumer loans. The Bank
makes loans to individuals for purposes such as home mortgage financing,
personal vehicles and various consumer purchases, and other personal and family
needs.

    The Bank makes commercial loans to businesses primarily in the primary
service area for purposes such as providing equipment and machinery purchases,
commercial real estate purchases and working capital.

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    The Bank's lending philosophy is to make loans, taking into consideration
the safety of the Bank's depositors' funds, the preservation of the Bank's
liquidity, the interest of the Company's shareholders, and the welfare of the
community. Interest income from the Bank's lending operations is the principal
component of the Bank's income, so therefore prudent lending is essential for
the prosperity of the Bank.

    The principal sources of income for the Bank are interest and fees collected
on loans, interest and dividends collected on other investments, and mortgage
brokerage fees. The principal expenses of the Bank are interest paid on
deposits, employee compensation, office expenses, and other overhead expenses.

    The Bank's business plan for its initial years of operation relies
principally upon local advertising and promotional activity and upon personal
contacts by its directors, officers and shareholders to attract business and to
acquaint potential customers with the Bank's personalized services. The Bank
intends to emphasize a high degree of personalized client service in order to be
able to provide for each customer's banking needs. The Bank's marketing approach
will emphasize the advantages of dealing with an independent, locally-owned and
managed state chartered bank to meet the particular needs of individuals,
professionals and small- to- medium-size businesses in the community. All
banking services will be continually evaluated with regard to their
profitability and efforts will be made to modify the Bank's business plan if the
plan does not prove successful. The Bank does not currently offer trust or
permissible securities services.

SUPERVISION AND REGULATION

    REGULATION OF THE BANK.  The operations of the Bank are subject to state and
federal statutes applicable to state chartered banks whose deposits are insured
by the FDIC and the regulations of the DBF and the FDIC. Such statutes and
regulations relate to, among other things, required reserves, investments,
loans, mergers and consolidations, issuances of securities, payment of
dividends, establishment of branches and other aspects of the Bank's operations.

    Under the provisions of the Federal Reserve Act, the Bank is subject to
certain restrictions on any extensions of credit to the Company or, with certain
exceptions, other affiliates, and on the taking of such stock or securities as
collateral on loans to any borrower. In addition, the Bank is prohibited from
engaging in certain tie-in arrangements in connection with any extension of
credit or the providing of any property or service.

    The Bank, as a state chartered bank, will be permitted to branch only to the
extent that banks are permitted to branch under Georgia law. In January 1996,
the Georgia legislature passed a bill designed to eliminate Georgia's current
intra-county branching restrictions. The new legislation provided that effective
after July 1, 1996, banks in Georgia, with prior approval of the DBF (and the
appropriate federal regulatory authority), could establish additional branches
in up to three new counties in the state per year. On July 1, 1998, full
statewide branching went into effect as Georgia banks may establish new branches
in any county in the state with prior approval of the appropriate regulatory
authorities.

    The FDIC adopted final risk-based capital guidelines for all FDIC insured
state chartered banks that are not members of the Federal Reserve System
effective December 31, 1990. As of December 31, 1992, all banks are required to
maintain a minimum ratio of total capital to risk weighted assets of 8 percent
(of which at least 4 percent must consist of Tier 1 capital). Tier 1 capital of
state chartered banks (as defined in regulations) generally consists of
(i) common stockholders equity; (ii) non-cumulative perpetual preferred stock
and related surplus; and (iii) minority interests in the equity accounts of
consolidated subsidiaries.

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    In addition, the FDIC adopted a minimum ratio of Tier 1 capital to total
assets of banks. This capital measure is generally referred to as the leverage
capital ratio. The FDIC has established a minimum leverage capital ratio of
3 percent if the FDIC determines that the institution is not anticipating or
experiencing significant growth and has well-diversified risk, including no
undue interest rate exposure, excellent asset quality, high liquidity, good
earnings and, in general, is considered a strong banking organization, rated
Composite 1 under the Uniform Financial Institutions Rating System. Other
financial institutions are expected to maintain leverage capital at least 100 to
200 basis points above the minimum level. Banking regulators continue to
indicate their desire to raise capital requirements applicable to banking
organizations, including a proposal to add an interest rate risk component to
risk-based capital requirements. At December 31, 2000, the Bank exceeded the
minimum Tier 1, risk-based and leverage capital ratios.

    The Federal Deposit Insurance Corporation Improvement Act of 1991, enacted
in December 1991 ("FDICIA"), specifies, among other things, the following five
capital standard categories for depository institutions: (i) well capitalized,
(ii) adequately capitalized, (iii) undercapitalized, (iv) significantly
undercapitalized and (v) critically undercapitalized. FDICIA imposes
progressively more restrictive constraints on operations, management and capital
distributions depending on the category in which an institution is classified.
Each of the federal banking agencies has issued final uniform regulations that
became effective December 19, 1992, which, among other things, define the
capital levels described above. Under the final regulations, a bank is
considered "well capitalized" if it (i) has a total risk-based capital ratio of
10% or greater, (ii) has a Tier 1 risk-based capital ratio of 6% or greater,
(iii) has a leverage ratio of 5% or greater, and (iv) is not subject to any
order or written directive to meet and maintain a specific capital level for any
capital measure. An "adequately capitalized" bank is defined as one that has
(i) a total risk-based capital ratio for 8% or greater, (ii) a Tier 1 risk-based
capital ratio of 4% or greater and (iii) a leverage ratio of 4% or greater. An
"undercapitalized" bank is defined as one that has (i) a total risk-based
capital ratio of less than 8%, (ii) a Tier 1 risk-based capital ratio of less
than 4% or (iii) a leverage ratio of less than 3%. A "significantly
undercapitalized" bank is defined as one that has (i) a total risk-based capital
ratio of less than 6%, (ii) a Tier 1 risk-based capital ratio of less than 3% or
(iii) a leverage ratio of less than 3%. A bank is "critically undercapitalized"
if the bank has a leverage ratio equal to or less than 2%. The applicable
federal regulatory agency for a bank that is "well capitalized" may reclassify
it as "adequately capitalized" or "undercapitalized" and subject the institution
to the supervisory actions applicable to the next lower capital category, if it
determines that the Bank is in an unsafe or unsound condition or deems the bank
to be engaged in an unsafe or unsound practice and not to have corrected the
deficiency. As of December 31, 2000, the Bank met the definition of a "well
capitalized" institution.

    "Undercapitalized" depository institutions, among other things, are subject
to growth limitations, are prohibited, with certain exceptions, from making
capital distributions, are limited in their ability to obtain funding from a
Federal Reserve Bank and are required to submit a capital restoration plan. The
federal banking agencies may not accept a capital plan without determining,
among other things, that the plan is based on realistic assumptions and is
likely to succeed in restoring the depository institution's capital. In
addition, for a capital restoration plan to be acceptable, the depository
institution's parent holding company must guarantee that the institution will
comply with such capital restoration plan and provide appropriate assurances of
performance. If a depository institution fails to submit an acceptable plan,
including if the holding company refuses or is unable to make the guarantee
described in the previous sentence, it is treated as if it is "significantly
undercapitalized". Failure to submit or implement an acceptable capital plan
also is grounds for the appointment of a conservator or a receiver.
"Significantly undercapitalized" depository institutions may be subject to a
number of additional requirements and restrictions such as orders to sell
sufficient voting stock to become adequately capitalized, requirements to reduce
total assets, and cessation of receipt of deposits from correspondent banks.
"Critically undercapitalized" institutions, among other things, are prohibited
from

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making any payments of principal and interest on subordinated debt, and are
subject to the appointment of a receiver or conservator.

    Under FDICIA, the FDIC is permitted to provide financial assistance to an
insured bank before appointment of a conservator or receiver only if (i) such
assistance would be the least costly method of meeting the FDIC's insurance
obligations, (ii) grounds for appointment of a conservator or a receiver exist
or are likely to exist, (iii) it is unlikely that the bank can meet all capital
standards without assistance and (iv) the bank's management has been competent,
has complied with applicable laws, regulations, rules and supervisory directives
and has not engaged in any insider dealing, speculative practice or other
abusive activity.

    The Bank is subject to FDIC deposit insurance assessments for the Bank
Insurance Fund ("BIF"). The FDIC has implemented a risk-based assessment system
whereby banks are assessed on a sliding scale depending on their placement in
nine separate supervisory categories. Recent legislation provides that BIF
insured institutions, such as the Bank, will share the Financial Corporation
("FICO") bond service obligation. Previously, only Savings Association Insurance
Fund ("SAIF") insured institutions were obligated to contribute to the FICO bond
service. The BIF deposit insurance premium will be less than $.02 per $100 of
BIF insured deposits for the highest-rated institutions.

    On April 19, 1995, the federal bank regulatory agencies adopted uniform
revisions to the regulations promulgated pursuant to the Community Reinvestment
Act (the "CRA"), which are intended to set standards for financial institutions.
The revised regulation contains three evaluation tests: (a) a lending test which
will compare the institution's market share of loans in low and moderate income
areas to its market share of loans in its entire service area and the percentage
of a bank's outstanding loans to low and moderate income areas or individuals,
(b) a services test which will evaluate the provision of services that promote
the availability of credit to low and moderate income areas, and (c) an
investment test, which will evaluate an institution's record of investments in
organizations designed to foster community developments, small and minority
owned businesses and affordable housing lending, including state and local
government housing or revenue bonds. The regulation is designed to reduce the
paperwork requirements of the current regulations and provide regulatory
agencies, institutions, and community groups with a more objective and
predictable manner with which to evaluate the CRA performance of financial
institutions. The rule became effective on January 1, 1996 when evaluation under
streamlined procedures began for institutions with total assets of less than
$250 million that are owned by a holding company with total assets of less than
$1 billion.

    Congress and various federal agencies (including, in addition to the bank
regulatory agencies, the Department of Housing and Urban Development, the
Federal Trade Commission and the Department of Justice (collectively, the
"Federal Agencies") responsible for implementing the nation's fair lending laws
have been increasingly concerned that the prospective home buyers and other
borrowers are experiencing discrimination in their efforts to obtain loans. The
Justice Department filed suit against financial institutions which it determined
had discriminated, seeking fines and restitution for borrowers who allegedly
suffered from discriminatory practices. Most, if not all, of these suits have
been settled (some for substantial sums) without a full adjudication on the
merits.

    On March 8, 1994, the Federal Agencies, in an effort to clarify what
constitutes discrimination in lending and to specify the factors the agencies
will consider in determining if lending discrimination exists, announced a joint
policy statement detailing specific discriminatory practices prohibited under
the Equal Credit Opportunity Act and the Fair Housing Act. In the policy
statement, three methods of establishing discrimination in lending were
identified: (a) overt evidence of discrimination, when a lender blatantly
discriminates on a prohibited basis, or (b) where there is no showing that the
treatment was motivated by intent to discriminate against a person, and
(c) evidence of disparate impact, when a lender applies a practice uniformly to
all applicants, but the practice has a discriminatory effect on a

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protected class, even where such practices are neutral on their face and are
applied equally, unless the practice can be justified on the basis of business
necessity.

    REGULATION OF THE COMPANY.  The Company is a bank holding company within the
meaning of the Federal Bank Holding Company Act (the "Act") and the Georgia bank
holding company law (the "Georgia Act"). As a bank holding company, the Company
is required to file with the Federal Reserve Board (the "Board") an annual
report and such additional information as the Board may require pursuant to the
Act. The Board may also make examinations of the Company and each of its
subsidiaries. Bank holding companies are required by the Act to obtain approval
from the Board prior to acquiring, directly or indirectly, ownership or control
of more than 5% of the voting shares of a bank. The Act also prohibits bank
holding companies, with certain exceptions, from acquiring more than 5% of the
voting shares of any company that is not a bank and from engaging in any
non-banking business (other than a business closely related to banking as
determined by the Board) or from managing or controlling banks and other
subsidiaries authorized by the Act or furnishing services to, or performing
services for, its subsidiaries without the prior approval of the Board. The
Board is empowered to differentiate between activities that are initiated de
novo by a bank holding company or a subsidiary and activities commenced by
acquisition of a going concern. The Company has no present intention to engage
in non-banking activities. As a bank holding company, the Company is subject to
capital adequacy guidelines as established by the Board. The Board established
risk-based capital guidelines for bank holding companies effective March 15,
1989. Beginning on December 31, 1992, the minimum required ratio for total
capital to risk weighted assets became 8 percent (of which at least 4 percent
must consist of Tier 1 capital). Tier 1 capital (as defined in regulations of
the Board) consists of common and qualifying preferred stock and minority
interests in equity accounts of consolidated subsidiaries, less goodwill and
other intangible assets required to be deducted under the Board's guidelines.
The Board's guidelines apply on a consolidated basis to bank holding companies
with total consolidated assets of $150 million or more. For bank holding
companies with less than $150 million in total consolidated assets (such as the
Company), the guidelines will be applied on a bank only basis, unless the bank
holding company is engaged in non-banking activity involving significant
leverage or has significant amount of debt outstanding that is held by the
general public. The Board has stated that risk-based capital guidelines
establish minimum standards and that bank holding companies generally are
expected to operate well above the minimum standards.

    The Company is also a bank holding company within the meaning of the Georgia
Act, which provides that, without the prior approval of the DBF, it is unlawful
(i) for any bank holding company to acquire direct or indirect ownership or
control of more than 5% of the voting shares of any bank, (ii) for any bank
holding company or subsidiary thereof, other than a bank, to acquire all or
substantially all of the assets of a bank, or (iii) for any bank holding company
to merge or consolidate with any other bank holding company. It also is unlawful
for any company to acquire direct or indirect ownership or control of more than
5% of the voting shares of any bank in Georgia unless such bank has been in
existence and continuously operating or incorporated as a bank for a period of
five years or more prior to the date of application to the DBF for approval of
such acquisition. Bank holding companies themselves are prohibited from
acquiring another bank until the initial bank in the bank holding company has
been incorporated for a period of twenty-four months. The Riegle-Neal Interstate
Banking and Branching Efficiency Act of 1994 (the "Interstate Banking Act"),
subject to certain restrictions, allows adequately capitalized and managed bank
holding companies to acquire existing banks across state lines, regardless of
state statutes that would prohibit acquisitions by out-of-state institutions.
Further, effective June 1, 1997, a bank holding company may consolidate
interstate bank subsidiaries into branches and a bank may merge with an
unaffiliated bank across state lines to the extent that the applicable states
have not "opted out" of interstate branching prior to such effective date. Some
states may elect to permit interstate mergers prior to June 1, 1997. The
Interstate Banking Act generally prohibits an interstate acquisition (other than
the initial entry into a state by a bank holding company) that would result in
either the control of more than (i) 10% of the total amount of

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insured deposits in the United States, or (ii) 30% of the total insured deposits
in the home state of the target bank, unless such 30% limitation is waived by
the home state on a basis which does not discriminate against out-of-state
institutions. As a result of this legislation, the Company may become a
candidate for acquisition by, or may itself seek to acquire, banking
organizations located in other states. The Riegle Community Development and
Regulatory Improvement Act of 1994 (the "Improvement Act") provides for the
creation of a community development financial institutions' fund to promote
economic revitalization in community development. Banks and thrift institutions
are allowed to participate in such community development banks. The Improvement
Act also contains (i) provisions designed to enhance small business capital
formation and to enhance disclosure with regard to high cost mortgages for the
protection of consumers, and (ii) more than 50 regulatory relief provisions that
apply to banks and thrift institutions, including the coordination of
examinations by various federal agencies, coordination of frequency and types of
reports financial institutions are required to file and reduction of
examinations for well capitalized institutions.

    Bank holding companies may be compelled by bank regulatory authorities to
invest additional capital in the event a subsidiary bank experiences either
significant loan losses or rapid growth of loans or deposits. In addition, the
Company may be required to provide additional capital to any additional banks it
acquires as a condition to obtaining the approvals and consents of regulatory
authorities in connection with such acquisitions.

    The Company and the Bank are subject to the Federal Reserve Act,
Section 23A, which limits a bank's "covered transactions" (generally, any
extension of credit) with any single affiliate to no more than 10% of a bank's
capital and surplus. Covered transactions with all affiliates combined are
limited to no more than 20% of a bank's capital and surplus. All covered and
exempt transactions between a bank and its affiliates must be on terms and
conditions consistent with safe and sound banking practices, and a bank and its
subsidiaries are prohibited from purchasing low quality assets from the bank's
affiliates. Finally, Section 23A requires that all of a bank's extensions of
credit to an affiliate be appropriately secured by collateral. The Company and
the Bank are also subject to Section 23B of the Federal Reserve Act, which
further limits transactions among affiliates. Sections 22(g) and 22(h) of the
Federal Reserve Act and implementing regulations also prohibit extensions of
credit by a state non-member bank (such as the Bank) to its directors, officers
and controlling shareholders on terms which are more favorable than those
afforded other borrowers, and impose limits on the amounts of loans to
individual affiliates and all affiliates as a group.

FINANCIAL SERVICES MODERNIZATION LEGISLATION

    General.  On November 12, 1999, President Clinton signed into law the Gramm-
Leach-Bliley Act of 1999 (the "Financial Services Modernization Act"). The
Financial Services Modernization Act repeals the two affiliation provisions of
the Glass-Steagall Act: Section 20, which restricted the affiliation of Federal
Reserve Member Banks with firms "engaged principally" in specified securities
activities; and Section 32, which restricts officer, director, or employee
interlocks between a member bank and any company or person "primarily engaged"
in specified securities activities. In addition, the Financial Services
Modernization Act also contains provisions that expressly preempt any state law
restricting the establishment of financial affiliations, primarily related to
insurance.

    The law also:

    - broadens the activities that may be conducted by national banks, banking
      subsidiaries of bank holding companies, and their financial subsidiaries;

    - provides an enhanced framework for protecting the privacy of consumer
      information;

    - adopts a number of provisions related to the capitalization, membership,
      corporate governance, and other measures designed to modernize the Federal
      Home Loan Bank system;

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    - modifies the laws governing the implementation of the Community
      Reinvestment Act; and

    - addresses a variety of other legal and regulatory issues affecting both
      day-to-day operations and long-term activities of financial institutions.

    The Bank does not believe that the Financial Services Modernization Act will
have a material adverse effect on our operations in the near-term. The Financial
Services Modernization Act is intended to grant to community banks certain
powers as a matter of right that larger institutions have accumulated on an ad
hoc basis. Nevertheless, this act may have the result of increasing the amount
of competition that the Bank faces from larger institutions and other types of
companies offering financial products, many of which may have substantially more
financial resources than the Bank.

    Financial Holding Companies. Bank holding companies that elect to become a
financial holding company may affiliate with securities firms and insurance
companies and engage in other activities that are financial in nature or are
incidental or complementary to activities that are financial in nature. The Bank
has not elected to become a financial holding company.

    "Financial in nature" activities include:

    - securities underwriting;

    - dealing and market making;

    - sponsoring mutual funds and investment companies;

    - insurance underwriting and agency;

    - merchant banking; and

    - activities that the Federal Reserve, in consultation with the Secretary of
      the Treasury, determines from time to time to be so closely related to
      banking or managing or controlling banks as to be a proper incident
      thereto.

    A bank holding company must meet three requirements before becoming a
financial holding company:

    - all of the bank holding company's depository institution subsidiaries must
      be well capitalized, well managed and, except in limited circumstances, in
      compliance with the Community Reinvestment Act; and

    - the bank holding company must file with the Federal Reserve a declaration
      of its election to become a financial holding company, including a
      certification that its depository institution subsidiaries meet the prior
      two criteria.

    Failure to comply with the financial holding company requirements could lead
to divestiture of subsidiary banks or require all activities of the company to
conform to those permissible for a bank holding company. No Federal Reserve
approval is required for a financial holding company to acquire a company (other
than a bank holding company, bank or savings association) engaged in activities
that are financial in nature or incidental to activities that are financial in
nature, as determined by the Federal Reserve. In December 2000, the Federal
Reserve approved an interim rule defining the three categories of activities
financial in nature or incidental to a financial activity:

    - lending, exchanging, transferring, investing for others, or safeguarding
      financial assets other than money or securities;

    - providing any devise or other instrumentality for transferring money or
      other financial assets; or

    - arranging, effecting or facilitating financial transactions for the
      account of third parties.

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    The interim rule also establishes a mechanism through which financial
holding companies or other interested parties may request that the Federal
Reserve find that a particular activity falls within one of these three
categories. For example, the Federal Reserve has recently issued a proposed rule
that would grant financial holding companies the right to act as real estate
brokers and managers.

    A bank holding company that is not also a financial holding company is
limited to engaging in banking and such other activities as determined by the
Federal Reserve to be so closely related to banking or managing or controlling
banks as to be a proper incident thereto.

    Privacy.  Under the Financial Services Modernization Act, federal banking
regulators are required to adopt rules that will limit the ability of banks and
other financial institutions to disclose non-public information about consumers
to nonaffiliated third parties. These limitations will require disclosure of
privacy policies to consumers and, in some circumstances, will allow consumers
to prevent disclosure of certain personal information to a nonaffiliated third
party. Federal banking regulators issued final rules on May 10, 2000. Pursuant
to the rules, financial institutions must provide:

    - initial notices to customers about their privacy policies, describing the
      conditions under which they may disclose nonpublic personal information to
      nonaffiliated third parties and affiliates;

    - annual notices of their privacy policies to current customers; and

    - a reasonable method for customers to "opt out" of disclosures to
      nonaffiliated third parties.

    The rules were effective November 13, 2000, but compliance is optional until
July 1, 2001. These privacy provisions will affect how consumer information is
transmitted through diversified financial companies and conveyed to outside
vendors. It is not possible at this time to assess the impact of the privacy
provisions on the Company's financial condition or results of operations.

    Consumer Protection Rules--Sale of Insurance. In December 2000 pursuant to
the requirements of the Financial Services Modernization Act, the federal bank
and thrift regulatory agencies adopted consumer protection rules for the sale of
insurance products by depository institutions. The rule is effective on
April 1, 2001. The final rule applies to any depository institution or any
person selling, soliciting, advertising, or offering insurance products or
annuities to a consumer at an office of the institution or on behalf of the
institution. The regulation requires oral and written disclosure before the
completion of the sale of an insurance product or annuity that such product:

    - is not a deposit or other obligation of, or guaranteed by, the depository
      institution or its affiliate;

    - is not insured by the FDIC or any other agency of the United States, the
      depository institution or its affiliates; and

    - has certain risks of investment, including the possible loss of value.

    The depository institution may not condition an extension of credit on the
consumer's purchase of an insurance product or annuity from the depository
institution or from any of its affiliates, or on the consumer's agreement not to
obtain, or a prohibition on the consumer from obtaining, an insurance product or
annuity from an unaffiliated entity. Furthermore, to the extent practicable, a
depository institution must keep insurance and annuity sales activities
physically segregated from the areas where retail deposits are routinely
accepted from the general public. Finally, the rule addresses cross marketing
and referral fees.

    Safeguarding Confidential Customer Information.  In January 2000, the
banking agencies adopted guidelines requiring financial institutions to
establish an information security program to:

    - identify and assess the risks that may threaten customer information;

    - develop a written plan containing policies and procedures to manage and
      control these risks;

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    - implement and test the plan; and

    - adjust the plan on a continuing basis to account for changes in
      technology, the sensitivity of customer information and internal or
      external threats to information security.

    Each institution may implement a security program appropriate to its size
and complexity and the nature and scope of its operations. The guidelines are
effective July 1, 2001.

    The United States Congress and the Georgia General Assembly periodically
consider and adopt legislation that results in, and could further result in,
deregulation, among other matters, of banks and other financial institutions.
Such legislation could modify or eliminate geographic restrictions on banks and
bank holding companies and current prohibitions with other financial
institutions, including mutual funds, securities brokerage firms, insurance
companies, banks from other states and investment banking firms. The effect of
any such legislation on the business of the Company or the Bank cannot be
accurately predicted. The Company cannot predict what legislation might be
enacted or what other implementing regulations might be adopted, and if enacted
or adopted, the effect thereof.

MONETARY POLICY

    The earnings of the Bank are affected by domestic and foreign economic
conditions, particularly by the monetary and fiscal policies of the United
States Government and its agencies.

    The Federal Reserve has had, and will continue to have, an important impact
on the operating results of commercial banks through its power to implement
national monetary policy in order, among other things, to mitigate recessionary
and inflationary pressures by regulating the national money supply.

    The techniques used by the Federal Reserve include setting the reserve
requirements of member banks and establishing the discount rate on member bank's
borrowings. The Federal Reserve also conducts open market transactions in United
States Government securities.

    Periodically, bills are pending before the United States Congress which
contain wide-ranging proposals for altering the structures, regulations and
competitive relationships of the nation's financial institutions. Among such
bills are proposals to prohibit banks and bank holding companies from conducting
certain types of activities, to subject banks to increased disclosure and
reporting requirements, to eliminate on a regional or other basis the present
restriction on interstate expansion by banks or bank holding companies, to alter
the statutory separation of commercial and investment banking and to alter the
powers of thrift institutions and other competitors of banks. It cannot be
predicted whether or in what form any of these proposals will be adopted or the
extent to which the business of the Company may be affected thereby.

COMPETITION

    The banking business is highly competitive. The Bank competes with other
commercial banks in its primary service area.

    Banks generally compete with other financial institutions through the
banking products and services offered, the pricing of services, the level of
service provided, the convenience and availability of services, and the degree
of expertise and the personal manner in which services are offered. The Bank
encounters strong competition from most of the financial institutions in the
Bank's primary service area. In the conduct of certain areas of its banking
business, the Bank also competes with credit unions, consumer finance companies,
insurance companies, money market mutual funds and other financial institutions,
some of which are not subject to the same degree of regulation and restrictions
imposed upon the Bank. Many of these competitors have substantially greater
resources and lending limits than the Bank has and offer certain services, such
as trust services, that the Bank does not

                                       9
<PAGE>
provide presently. Management believes that competitive pricing and personalized
service will provide it with a method to compete effectively in the primary
service area.

EMPLOYEES

    As of December 31, 2000, the Bank employed 22 full-time employees and three
part-time employees. Except for the officers of the Bank who presently serve as
officers of the Company, the Company does not have any employees. Neither the
Company nor the Bank is a party to any collective bargaining agreement, and
management believes the Bank enjoys satisfactory relations with its employees.

ITEM 2.  DESCRIPTION OF PROPERTIES.

    The operations of the Company and the Bank are conducted in a main office
building located at 119 Maple Street, Carrollton, Georgia. The office consists
of an approximately 25,000 square foot four-story building, of which two floors
are being leased to unaffiliated third parties. The Bank also has a branch
located at 6670 Church Street in Douglasville, Georgia. That building is
one-story brick building with approximately 5,000 square feet of space. The Bank
presently leases space in the Villa Rica Crossing Shopping Center in Villa Rica,
Georgia and operates a loan production office. Plans are to convert the loan
production office to a full service branch in 2001 to be located at 485 Bankhead
Highway, Villa Rica, Georgia. The Company purchased the 485 Bankhead Highway
property in December, 2000, and the building consists of approximately 2,400
square feet.

ITEM 3.  LEGAL PROCEEDINGS.

    Neither the Company nor the Bank is a party to any pending legal
proceedings, other than routine litigation incidental to the Bank's business,
which management believes would have a material effect upon the operations or
financial condition of the Company or the Bank.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

    No matter was submitted to a vote of security holders during the Company's
fourth quarter of the fiscal year ended December 31, 2000.

                                       10
<PAGE>
                                    PART II

ITEM 5.  MARKET FOR ISSUER'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

    There is no established trading market for the Company's common stock, which
was first issued on January 28, 1997 at a price of $10.00 per share. As of
March 5, 2001, the Company had 383 shareholders of record.

    Under the Georgia Business Corporation Code, the Company may from time to
time make distributions, including the payment of dividends, to its shareholders
in money, indebtedness or other property (except its own shares) unless, after
giving effect to such distribution, the Company would not be able to pay its
debts as they become due in the usual course of business or the Company's total
assets would be less than the sum of its total liabilities, plus the amount that
would be needed, if the Company were to be dissolved at the time of the
distribution, to satisfy any preferential rights of shareholders upon
dissolution. The Company may also distribute its shares pro rata and without
consideration to its shareholders or to the shareholders of one or more classes
or series, which constitutes a share dividend.

    However, the only current source of funds with which the Company can pay
dividends is from amounts received as dividends from the Bank. The Board of
Directors of the Bank is limited in its ability to pay cash dividends on the
outstanding capital stock of the Bank without regulatory approval. The Georgia
Financial Institutions Code provides that dividends may be declared and paid
only from a bank's cumulative retained earnings which have not been appropriated
as permanent capital. Approval from the DBF is required prior to the payment of
dividends by a bank under certain circumstances. Generally, a bank may declare
and pay dividends without the prior approval of the DBF so long as (i) a bank's
ratio of equity capital to adjusted total assets equals or exceeds 6%, (ii) the
aggregate amount of dividends declared or anticipated to be declared by a bank
in the calendar year does not exceed 50% of such bank's net profits after taxes
but before dividends for the prior calendar year, and (iii) the total classified
assets at the most recently completed and delivered examination of the bank do
not exceed 80% of the equity capital reflected at such examination.

    The Company does not anticipate paying dividends on its common stock in the
immediate future.

    No assurance can be given that dividends will be declared by the Company, or
if declared, what the amount of the dividends will be or whether such dividends,
once declared, would continue.

ITEM 6.  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, Peoples Bank of West Georgia, 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.

                                       11
<PAGE>
FORWARD-LOOKING STATEMENTS

    We may from time to time make written or oral forward-looking statements,
including statements contained in 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 growth made possible by our
presence in downtown Carrollton, Georgia and our branch expansion into
Douglasville, Georgia. We anticipate adding a full service branch in Villa Rica,
Georgia in mid-2001. The expansion into other markets has a current negative
impact on earnings, but we believe that the expansion will provide increased
earnings in the future.

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
                                                         --------      --------
                                                         (DOLLARS IN THOUSANDS)
<S>                                                      <C>           <C>
Cash and due from banks................................  $   933       $ 1,556
Interest-bearing deposits in banks.....................      329           199
Federal funds sold.....................................    2,665         2,023
Securities.............................................   11,090        11,696
Loans, net.............................................   47,325        29,772
Premises and equipment.................................    4,241         3,798
Other assets...........................................      700           572
                                                         -------       -------
                                                         $67,283       $49,616
                                                         =======       =======

Total deposits.........................................  $52,294       $38,764
Other borrowings.......................................    6,000         2,500
Other liabilities......................................      650           401
Stockholders' equity...................................    8,339         7,951
                                                         -------       -------
                                                         $67,283       $49,616
                                                         =======       =======
</TABLE>

                                       12
<PAGE>
FINANCIAL CONDITION AT DECEMBER 31, 2000 AND 1999

    As of December 31, 2000, our total assets were $67.3 million, an increase of
36% over December 31, 1999. Total interest-earning assets were $62.0 million at
December 31, 2000 or 92% of total assets as compared to 89% of total assets at
December 31, 1999. Our primary interest-earning assets at December 31, 2000 were
loans, which made up 77% of total interest-earning assets as compared to 68% at
December 31, 1999. Our loan to deposit ratio was 92% at December 31, 2000 as
compared to 78% at December 31, 1999. The loan to deposit ratio has increased as
we are using Federal Home Loan Bank borrowings as an additional funding source.
Deposit growth of $13.5 million and increased advances from the Federal Home
Loan Bank of $3.5 have been used primarily to fund loan growth of
$17.8 million.

    Our securities portfolio, consisting of U.S. Agency, mortgage-backed, and
equity securities, amounted to $11.1 million at December 31, 2000. Unrealized
gains on securities amounted to $35,000 at December 31, 2000 as compared to
unrealized losses of $207,000 at December 31, 1999. Management has not
specifically identified any securities for sale in future periods that, 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 77% of our loan portfolio collateralized by real estate located in
our primary market area of Carroll County, Georgia and surrounding counties. Our
real estate mortgage portfolio consists of loans collateralized by one- to
four-family residential properties (31%), construction loans to build one- to
four-family residential properties (38%), and nonresidential properties
consisting primarily of small business commercial properties (31%). We generally
require that loans collateralized by real estate not exceed 80% of the
collateral value.

    The remaining 23% 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 as well as having
independent loan review. 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 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

                                       13
<PAGE>
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 our
deposits to meet our 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 $13.6 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 $3,500,000.

    At December 31, 2000, our capital ratios were considered adequate based on
regulatory minimum capital requirements. Our stockholders' equity increased due
to net income in 2000 of $228,000 and unrealized gains on securities
available-for-sale, net of tax, of $160,000. For regulatory purposes, the net
unrealized gains on securities available-for-sale are excluded in the
computation of the capital ratios.

    In the future, the primary source of funds available to Peoples Bancorp, Inc
will be 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. As of December 31, 2000, the Bank could pay $120,000 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 Peoples
Bancorp, Inc. 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.......................      12.87%      10.04%         5.00%
Risk-based capital ratios:
  Core capital...............................      16.15       12.67          6.00
  Total capital..............................      17.27       13.81         10.00
</TABLE>

    These ratios may decline as asset growth continues, but, as earnings improve
to support the growth, are expected to exceed the regulatory minimum
requirements.

    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 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,
which, if they were implemented, would have such an effect.

                                       14
<PAGE>
EFFECTS OF INFLATION

    The impact of inflation on banks differs from its impact on non-financial
institutions. Banks, as financial intermediaries, have assets which 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.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

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

<TABLE>
<CAPTION>
                                                                YEARS ENDED
                                                                DECEMBER 31,
                                                           ----------------------
                                                             2000          1999
                                                           --------      --------
                                                                (DOLLARS IN
                                                                 THOUSANDS)
<S>                                                        <C>           <C>
Interest income..........................................   $5,044        $3,055
Interest expense.........................................    2,654         1,495
                                                            ------        ------
Net interest income......................................    2,390         1,560
Provision for loan losses................................      339           200
Other income.............................................      233           212
Other expenses...........................................    1,953         1,267
                                                            ------        ------
Pretax income............................................      331           305
Income taxes.............................................      103            50
                                                            ------        ------
Net income...............................................   $  228        $  255
                                                            ======        ======
</TABLE>

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 4.47% in 2000 as
compared to 4.16% in 1999. Average loans increased by $17.5 million while
average Federal funds sold decreased by $1.0 million, which accounted for the
majority of a $16.0 million increase in total average interest-earning assets.
Average interest-bearing liabilities increased by $16.1 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
9.43% in 2000 from 8.15% in 1999. The rate paid on average interest-bearing
liabilities increased to 5.61% in 2000 from 4.80% in 1999.

PROVISION FOR LOAN LOSSES

    The provision for loan losses was $339,000 in 2000 as compared to $200,000
in 1999. The amounts provided were due primarily to the growth of the portfolio,
increased net charge-offs of $101,000 and our assessment of the inherent risk of
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

                                       15
<PAGE>
may become uncollectible. We do not believe the increase in net charge-offs
indicate any significant negative trend in the overall quality of the loan
portfolio. This evaluation 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 and 1999, we
had nonaccrual loans totaling $89,000 and $11,000, respectively. The allowance
for loan losses as a percentage of total loans at December 31, 2000 and 1999 was
1.20% and 1.25%, respectively.

OTHER INCOME

    Other income consists of service charges on deposit accounts and other
miscellaneous revenues and fees. Other income was $233,000 in 2000 as compared
to $212,000 in 1999. The increase of $21,000 is due to increased service charges
on deposit accounts of $30,000 being offset by a decrease in realized securities
gains of $9,000.

OTHER EXPENSES

    Other expenses were $1,953,000 in 2000 as compared to $1,268,000 in 1999, an
increase of $686,000. Salaries and employee benefits increased by $327,000 due
to an increase in the number of full time employees from 19 to 22 and other
annual salary increases. Equipment and occupancy expenses increased by $229,000
due primarily to increased expense associated with moving into new banking
facilities in November of 1999 and branch expansion. Other operating expenses
increased by $130,000 which is primarily due to increased data processing costs
of $51,000, increased advertising costs of $25,000, and other miscellaneous
increases associated with our expanding operations.

INCOME TAX

    We recognized income tax expense of $103,000 in 2000 as compared to $50,000
in 1999. The effective tax rate for 2000 was 31% as compared to 16% for 1999.
The increase in tax rates is due to the recognition of $55,000 of deferred tax
assets in 1999 previously accorded a valuation allowance.

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. 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

                                       16
<PAGE>
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 66%. 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. For internal reporting
purposes, we do not consider interest-bearing demand and savings accounts to be
interest rate sensitive. Adjusting for these deposits, our cumulative one year
interest rate-sensitivity gap ratio would be 90%. We believe 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.

    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

                                       17
<PAGE>
indicated as repricing within the same period may in fact, reprice at different
times within such period and at different rates.

<TABLE>
<CAPTION>
                                                                               AFTER
                                                                 AFTER        ONE YEAR
                                                              THREE MONTHS      BUT
                                                  WITHIN       BUT WITHIN      WITHIN       AFTER
                                               THREE MONTHS     ONE YEAR     FIVE YEARS   FIVE YEARS    TOTAL
                                               ------------   ------------   ----------   ----------   --------
                                                                      (DOLLARS IN THOUSANDS)
<S>                                            <C>            <C>            <C>          <C>          <C>
Interest-earning assets:
  Interest-bearing deposits in banks.........    $    229       $    100       $    --      $   --     $   329
  Federal funds sold.........................       2,665             --            --          --       2,665
  Securities.................................       1,111          2,239         5,065       2,675      11,090
  Loans......................................      15,921         12,063        19,472         446      47,902
                                                 --------       --------       -------      ------     -------
                                                   19,926         14,402        24,537       3,121      61,986
                                                 --------       --------       -------      ------     -------
Interest-bearing liabilities:
  Interest-bearing demand deposits...........      13,573             --            --          --      13,573
  Savings....................................         370             --            --          --         370
  Certificates, less than $100,000...........       9,962         14,476         1,908          --      26,346
  Certificates, $100,000 and over............       2,992          4,915         1,050          --       8,957
  Other borrowings...........................       3,500          2,500            --          --       6,000
                                                 --------       --------       -------      ------     -------
                                                   30,397         21,891         2,958          --      55,246
                                                 --------       --------       -------      ------     -------

Interest rate sensitivity gap................    $(10,471)      $ (7,489)      $21,579      $3,121     $ 6,740
                                                 ========       ========       =======      ======     =======
Cumulative interest rate sensitivity gap.....    $(10,471)      $(17,960)      $ 3,619      $6,740
                                                 ========       ========       =======      ======
Interest rate sensitivity gap ratio..........        0.66           0.66          8.30          --
                                                 ========       ========       =======      ======
Cumulative interest rate sensitivity gap
  ratio......................................        0.66           0.66          1.07        1.12
                                                 ========       ========       =======      ======
</TABLE>

                                       18
<PAGE>
              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 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
reserves for loan losses; types of deposits and the return on equity and assets.

                                       19
<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................................  $ 1,150       $   909
Interest-bearing deposits in banks.....................      287           157
Taxable securities.....................................   11,505        12,102
Securities valuation account...........................     (226)          (65)
Federal funds sold.....................................    1,825         2,857
Loans(2)...............................................   39,860        22,364
Allowance for loan losses..............................     (464)         (271)
Other assets...........................................    4,484         3,298
                                                         -------       -------
                                                         $58,421       $41,351
                                                         =======       =======

Total interest-earning assets..........................  $53,477       $37,480
                                                         =======       =======

                     LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:
  Noninterest-bearing demand...........................  $ 2,838       $ 2,025
  Interest-bearing demand..............................   13,317        11,786
  Savings..............................................      331           263
  Time.................................................   29,971        19,024
                                                         -------       -------
    Total deposits.....................................  $46,457       $33,098
  Other borrowings.....................................    3,661            63
  Other liabilities....................................      254           277
                                                         -------       -------
    Total liabilities..................................   50,372        33,438
  Stockholders' equity.................................    8,049         7,913
                                                         -------       -------
                                                         $58,421       $41,351
                                                         =======       =======
Total interest-bearing liabilities.....................  $47,280       $31,136
                                                         =======       =======
</TABLE>

------------------------

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

(2) Nonaccrual loans in the amount of $83,000 and $8,000 were included in
    average loans for 2000 and 1999, respectively.

                                       20
<PAGE>
INTEREST INCOME AND INTEREST EXPENSE

    The following tables set forth the amount of our 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).............................   $4,213     10.57%     $2,222      9.94%
  Interest on taxable securities............................      698      6.07         680      5.62
  Interest on Federal funds sold............................      115      6.29         144      5.03
  Interest on deposits in banks.............................       18      6.13           9      5.96
                                                               ------                ------
  Total interest income.....................................   $5,044      9.43      $3,055      8.15
                                                               ------                ------

INTEREST EXPENSE:
  Interest on interest-bearing demand deposits..............   $  491      3.69%     $  431      3.65%
  Interest on savings deposits..............................        8      2.31           6      2.25
  Interest on time deposits.................................    1,904      6.35       1,054      5.54
  Interest on other borrowings..............................      251      6.85           4      6.35
                                                               ------                ------
  Total interest expense....................................    2,654      5.61       1,495      4.80
                                                               ------                ------
NET INTEREST INCOME.........................................   $2,390                $1,560
                                                               ======                ======
  Net interest spread.......................................               3.82%                 3.35%
                                                                          =====                  ====
  Net yield on average interest-earning assets..............               4.47%                 4.16%
                                                                          =====                  ====
</TABLE>

------------------------

(1) Interest and fees on loans includes $476,000 and $235,000 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.

                                       21
<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
                                                              --------   --------   --------
                                                                  (DOLLARS IN THOUSANDS)
<S>                                                           <C>        <C>        <C>
Increase (decrease) in:
  Income from interest-earning assets:
  Interest and fees on loans................................    $150      $1,841     $1,991
  Interest on taxable securities............................      53         (35)        18
  Interest on Federal funds sold............................      31         (60)       (29)
  Interest on deposits in banks.............................      --           9          9
                                                                ----      ------     ------
    Total interest income...................................     234       1,755      1,989
                                                                ----      ------     ------
  Expense from interest-bearing liabilities:
  Interest on interest-bearing demand deposits..............       4          56         60
  Interest on savings deposits..............................      --           2          2
  Interest on time deposits.................................     173         677        850
  Interest on other borrowings..............................      --         247        247
                                                                ----      ------     ------
    Total interest expense..................................     177         982      1,159
                                                                ----      ------     ------

    Net interest income.....................................    $ 57      $  773     $  830
                                                                ====      ======     ======
</TABLE>

                                       22
<PAGE>
                              INVESTMENT PORTFOLIO

TYPES OF INVESTMENTS

    The carrying amounts of securities at the dates indicated, which are all
classified as available-for-sale, are summarized as follows:

<TABLE>
<CAPTION>
                                                             DECEMBER 31,
                                                       ------------------------
                                                          2000           1999
                                                       ----------      --------
                                                        (DOLLARS IN THOUSANDS)
<S>                                                    <C>             <C>
U.S. Government agencies and corporations............   $ 1,527        $ 2,476
Mortgage-backed securities...........................     9,039          9,055
                                                        -------        -------
                                                         10,566         11,531
Equity securities....................................       524            165
                                                        -------        -------
                                                        $11,090        $11,696
                                                        =======        =======
</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. Equity
securities are not included in the table because they have no contractual
maturity.

<TABLE>
<CAPTION>
                                                                      AFTER ONE YEAR       AFTER FIVE YEARS
                                               ONE YEAR OR LESS     THROUGH FIVE YEARS     THROUGH TEN YEARS
                                              -------------------   -------------------   -------------------
                                               AMOUNT    YIELD(1)    AMOUNT    YIELD(1)    AMOUNT    YIELD(1)
                                              --------   --------   --------   --------   --------   --------
<S>                                           <C>        <C>        <C>        <C>        <C>        <C>
U.S. Government agencies and corporations...   $   --        --%     $1,018      6.96%     $  509      7.13%
Mortgage-backed securities..................       --        --       2,893      6.08       2,242      6.37
                                               ------                ------                ------
                                               $   --        --%     $3,911      6.31      $2,751      6.51
                                               ======                ======                ======
</TABLE>

<TABLE>
<CAPTION>
                                                               AFTER TEN YEARS            TOTAL
                                                             -------------------   -------------------
                                                              AMOUNT    YIELD(1)    AMOUNT    YIELD(1)
                                                             --------   --------   --------   --------
<S>                                                          <C>        <C>        <C>        <C>
U.S. Government agencies and corporations..................   $   --        --%    $ 1,527      7.02%
Mortgage-backed securities.................................    3,904      6.80       9,039      6.46
                                                              ------               -------
                                                              $3,904      6.80     $10,566      6.54
                                                              ======               =======
</TABLE>

------------------------

(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.

                                       23
<PAGE>
                                 LOAN PORTFOLIO

    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
                                                         --------      --------
                                                         (DOLLARS IN THOUSANDS)
<S>                                                      <C>           <C>
Commercial.............................................  $ 6,272       $ 5,586
Real estate--construction..............................   13,836         3,759
Real estate--mortgage..................................   22,857        16,472
Consumer installment loans and other...................    4,937         4,332
                                                         -------       -------
                                                          47,902        30,149
Less allowance for loan losses.........................     (577)         (377)
                                                         -------       -------
    Net loans..........................................  $47,325       $29,772
                                                         =======       =======
</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.......................................         $ 4,885
  After one through five years...........................           1,387
  After five years.......................................              --
                                                                  -------
                                                                    6,272
                                                                  -------

Construction
  One year or less.......................................          13,433
  After one through five years...........................             391
  After five years.......................................              12
                                                                  -------
                                                                   13,836
                                                                  -------
Other
  One year or less.......................................          10,885
  After one through five years...........................          16,536
  After five years.......................................             373
                                                                  -------
                                                                   27,794
                                                                  -------
                                                                  $47,902
                                                                  =======
</TABLE>

    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.

<TABLE>
<CAPTION>
                                                           (DOLLARS IN THOUSANDS)
                                                           ----------------------
<S>                                                        <C>
Predetermined interest rates.............................         $18,165
Floating or adjustable interest rates....................             534
                                                                  -------
                                                                  $18,699
                                                                  =======
</TABLE>

                                       24
<PAGE>
RISK ELEMENTS

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

<TABLE>
<CAPTION>
                                                                   DECEMBER 31,
                                                              ----------------------
                                                                2000          1999
                                                              --------      --------
                                                                   (DOLLARS IN
                                                                    THOUSANDS)
<S>                                                           <C>           <C>
Nonaccrual loans............................................    $89           $11
Loans contractually past due ninety days or more as to
  interest or principal payments and still accruing.........      0             4
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...............      8             1
Interest income that was recorded on nonaccrual and
  restructured loans........................................      0             0
</TABLE>

    It is our policy 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.

                                       25
<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
                                                         --------       --------
                                                         (DOLLARS IN THOUSANDS)
<S>                                                      <C>            <C>
Average amount of loans outstanding....................  $39,860        $22,364
                                                         =======        =======
Balance of allowance for loan losses at beginning of
  year.................................................  $   377        $   215
                                                         -------        -------
Loans charged off
  Commercial and financial.............................      123             29
  Real estate mortgage.................................       --             --
  Instalment...........................................       19             11
                                                         -------        -------
                                                             142             40
                                                         -------        -------
Loans recovered
  Commercial and financial.............................       --             --
  Real estate mortgage.................................       --             --
  Instalment...........................................        3              2
                                                         -------        -------
                                                               3              2
                                                         -------        -------
Net charge-offs........................................      139             38
                                                         -------        -------
Additions to allowance charged to operating expense
  during year..........................................      339            200
                                                         -------        -------
Balance of allowance for loan losses at end of year....  $   577        $   377
                                                         =======        =======
Ratio of net loans charged off during the year to
  average loans outstanding............................      .35%           .17%
                                                         =======        =======
</TABLE>

ALLOWANCE FOR LOAN LOSSES

    The allowance for loan losses is maintained at a level that is deemed
appropriate by us 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.

    As of December 31, 2000 and 1999, we had 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              PERCENT OF LOANS
                                                                      IN EACH                       IN EACH
                                                                    CATEGORY TO                   CATEGORY TO
                                                        AMOUNT      TOTAL LOANS       AMOUNT      TOTAL LOANS
                                                       --------   ----------------   --------   ----------------
                                                                        (DOLLARS IN THOUSANDS)
<S>                                                    <C>        <C>                <C>        <C>
Commercial...........................................    $115             13%          $ 94             19%
Real estate construction loans.......................     173             29             94             12
Real estate mortgage loans...........................     202             48            132             55
Consumer instalment loans and other..................      87             10             57             14
                                                         ----            ---           ----            ---
                                                         $577            100%          $377            100%
                                                         ====            ===           ====            ===
</TABLE>

                                       26
<PAGE>
                                    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, for the year is presented below. (1)

<TABLE>
<CAPTION>
                                                                     YEARS ENDED DECEMBER 31,
                                                             -----------------------------------------
                                                                    2000                  1999
                                                             -------------------   -------------------
                                                              AMOUNT    PERCENT     AMOUNT    PERCENT
                                                             --------   --------   --------   --------
                                                                      (DOLLARS IN THOUSANDS)
<S>                                                          <C>        <C>        <C>        <C>
Noninterest-bearing demand deposits........................  $ 2,838        --%    $ 2,025        --%
Interest-bearing demand deposits...........................   13,317      3.69      11,786      3.65
Savings deposits...........................................      331      2.31         263      2.25
Time deposits..............................................   29,971      6.35      19,024      5.54
                                                             -------               -------
                                                             $46,457               $33,098
                                                             =======               =======
</TABLE>

------------------------

(1) Average balances were determined using the daily average balances during the
    year.

    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.

<TABLE>
<CAPTION>
                                                           (DOLLARS IN THOUSANDS)
                                                           ----------------------
<S>                                                        <C>
Three months or less.....................................          $2,992
Over three through six months............................           1,362
Over six through twelve months...........................           3,553
Over twelve months.......................................           1,050
                                                                   ------
  Total..................................................          $8,957
                                                                   ======
</TABLE>

                   RETURN ON ASSETS AND STOCKHOLDERS' EQUITY

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

<TABLE>
<CAPTION>
                                                                   YEARS ENDED
                                                                   DECEMBER 31,
                                                              ----------------------
                                                                2000          1999
                                                              --------      --------
<S>                                                           <C>           <C>
Return on assets (1)........................................    0.39%         0.62%
Return on equity (2)........................................    2.83          3.22
Dividend payout ratio (3)...................................      --            --
Equity to assets ratio (4)..................................   13.78         19.14
</TABLE>

------------------------

(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.

                                       27
<PAGE>
ITEM 7.  FINANCIAL STATEMENTS.

    The financial statements required by this Item are included in the portions
of the Company's 2000 Annual Report to Shareholders filed as Exhibit 13 to this
Report and incorporated herein by reference.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

    There are no changes in or disagreements with accountants on accounting and
financial disclosure.

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

    The following table sets forth the name of each director of the Company, his
or her age at March 5, 2001, and a brief description of their principal
occupation and business experience for the preceding five years. Except as
otherwise indicated, each director has been or was engaged in his or her present
or last principal occupation, in the same or similar position for more than five
years. All of the Company's directors have served in such capacity since the
inception of the Company in 1996 except as indicated below.

<TABLE>
<CAPTION>
NAME                               AGE                          PRINCIPAL OCCUPATION
----                             --------   ------------------------------------------------------------
<S>                              <C>        <C>
Timothy I. Warren..............     40      Mr. Warren is the President, Chief Executive Officer and a
                                            Director of the Company and the Bank. Mr. Warren was
                                            President, Chief Executive Officer and a Director of the
                                            Community Bank of Carrollton from April 1991 to July 1996,
                                            when that bank was merged into Regions Bank, and the
                                            President, Chief Executive Officer and Director of the Bank
                                            of Villa Rica from February, 1996 and until that bank was
                                            also merged into Regions Bank in July 1996. Mr. Warren then
                                            served as an area manager for Regions Bank in the former
                                            bank market areas until leaving Regions Bank in August 1996
                                            to assume his current positions with the Company and the
                                            Bank.

Lawrence J. Alligood...........     62      Mr. Alligood has served as a Director since September 1997.
                                            Mr. Alligood is a pathologist who has practiced with the
                                            Carroll Pathology Group since August 1994, and who has owned
                                            a medical laboratory since 1982.

John B. Bohannon...............     54      Mr. Bohannon has been President of First Realty Association,
                                            Inc. since 1974.

Ann C. Carter..................     52      Ms. Carter is an interior design specialist.

J. Wayne Garner................     49      Mr. Garner became a Director in February 1998. He was the
                                            Commissioner of the Georgia Department of Corrections from
                                            December 1995 until March 1999. He has been the owner of
                                            First Family Funeral Home located in Carrollton since
                                            November 1997. Mr. Garner was the President of the
                                            Whitley-Garner Funeral Home located in Douglasville, Georgia
                                            from October 1982 until October 1997.

Lester H. Harmon...............     55      Mr. Harmon has been the owner and President of West Georgia
                                            Crown and Bridge since 1974.
</TABLE>

                                       28
<PAGE>

<TABLE>
<CAPTION>
NAME                               AGE                          PRINCIPAL OCCUPATION
----                             --------   ------------------------------------------------------------
<S>                              <C>        <C>
William P. Johnson.............     68      Mr. Johnson has practiced law in Carrollton, Georgia since
                                            1957, and is a senior partner in the law firm of Johnson,
                                            Word and Simmons.

Phillip Kauffman...............     54      From December 1989 through December 1996, Mr. Kauffman was
                                            the President of Leuco-Henderson, a tooling manufacturer.
                                            Since December 1996, Mr. Kauffman has managed personal
                                            investments and investment properties.

Jeff R. Matthews...............     45      Mr. Matthews has been self-employed as a timber dealer and
                                            real estate developer since 1978.

Charles J. Puckett.............     68      Mr. Puckett was the owner and President of People's Dodge/
                                            Chrysler/Jeep from 1977 to January 1998. Since January 1998,
                                            Mr. Puckett has managed investment properties.

William C. Seaton..............     52      Mr. Seaton has been the President of Seaton Development Co.,
                                            Inc., a real estate development company, since May 1973.
                                            From August 1985 until January 1995, Mr. Seaton co-owned
                                            Eagle Outdoor Advertising, Inc., which is involved in
                                            building and marketing billboards. Mr. Seaton has been the
                                            sole owner of that firm since January 1995.

Mark S. Swindle................     52      Mr. Swindle has been President of BSA Activewear, a
                                            manufacturer of active sportswear apparel, since May, 1989.
</TABLE>

    There are no arrangements or understandings between the Company and any
person pursuant to which any of the above persons have been or will be elected a
director. There are no family relations between any of the directors or
executive officers. No director is a director of another bank or bank holding
company.

    The Company's Articles of Incorporation provide for a classified Board of
Directors with approximately one-third of the members standing for election each
year. Three Class II directors, Messrs. Bohannon, Matthews and Swindle, are up
for re-election at the 2001 Annual Meeting of Shareholders. Five Class I
directors, Ms. Carter and Messrs. Harmon, Seaton, Alligood and Garner, were each
elected to a three year term at the 2000 Annual Meeting of Shareholders of the
Company. Four Class III directors, Messrs. Johnson, Kauffman, Puckett and
Warren, were each elected to a three year term at the 1999 Annual Meeting of
Shareholders.

                                       29
<PAGE>
    The following table sets forth the name of the current Executive Officers of
the Bank who are not directors of the Company, their age and principal
occupation for the last five years. Executive Officers of the Company and the
Bank are elected annually by the Board of Directors.

<TABLE>
<CAPTION>
NAME                               AGE                          PRINCIPAL OCCUPATION
----                             --------   ------------------------------------------------------------
<S>                              <C>        <C>
Elaine B. Lovvorn..............     57      Elaine Lovvorn is Secretary of the Company and Senior Vice
                                            President, Chief Financial Operations Officer of the Bank.
                                            Mrs. Lovvorn assisted in the organization of Carroll
                                            National Bank in July 1987, and served as that bank's
                                            Cashier through September 1991 when it was acquired by
                                            Synovus Financial Corporation. She then joined The Community
                                            Bank of Carrollton as a Senior Vice President and Controller
                                            in March 1992, remaining there through February 1994 before
                                            returning to her home town of Bowdon to serve as the manager
                                            of a $40 million branch of Carrollton Federal Savings and
                                            Loan Association. Mrs. Lovvorn then rejoined The Community
                                            Bank in November 1994 and remained there through August
                                            1996, when that bank was converted into a Regions Bank
                                            branch and Mrs. Lovvorn joined the Company

David L. Bryan.................     37      David Bryan is the Senior Vice President and Senior Credit
                                            Officer of the Bank. Mr. Bryan served as Assistant Vice
                                            President of NationsBank from April 1987 to November 1992.
                                            He was an Assistant Vice President of First Commerce Bank
                                            Cornelia, Georgia from November of 1992 until September of
                                            1994 when he joined the Bank of Villa Rica. Mr. Bryan served
                                            as Senior Credit Officer and Vice President of the Bank of
                                            Villa Rica until he joined the Bank in January of 1997.
</TABLE>

ITEM 10.  EXECUTIVE COMPENSATION.

EXECUTIVE COMPENSATION

    The following sets forth certain information concerning the compensation of
the Bank's chief executive officer during fiscal years 2000, 1999 and 1998. No
other executive officer received annual compensation in excess of $100,000.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                             LONG TERM
                                                                                           COMPENSATION
                                                                                     -------------------------
                                                                                       AWARDS       PAYOUTS
                                                 ANNUAL COMPENSATION                 ----------   ------------
                                   -----------------------------------------------   SECURITIES       ALL
                                                                     OTHER ANNUAL    UNDERLYING      OTHER
                                    FISCAL     SALARY      BONUS     COMPENSATION     OPTIONS     COMPENSATION
NAME & PRINCIPAL POSITION            YEAR       ($)         ($)         ($) (1)       (#) (2)         ($)
-------------------------          --------   --------   ---------   -------------   ----------   ------------
<S>                                <C>        <C>        <C>         <C>             <C>          <C>
Timothy I. Warren................  12/31/00   $150,000        --              --       15,000          (2)
  President and CEO                12/31/99   $145,000        --              --       10,000
                                   12/31/98   $137,066        --              --       15,000
</TABLE>

------------------------

(1) Compensation does not include any perquisites and other personal benefits
    which may be derived from business-related expenditures that in the
    aggregate do not exceed the lesser of $50,000 or 10% of the total annual
    salary and bonus reported for such person.

                                       30
<PAGE>
(2) Pursuant to Mr. Warren's Employment Agreement with the Bank, Mr. Warren will
    be entitled to one month's pay for each year employed by the Bank upon
    termination and to three years' annual base salary as severance pay and
    other consideration upon termination of his employment without cause in the
    event of a change in control. In addition, Mr. Warren received options to
    purchase 15,000 shares at an exercise price of $10.00 per share in 1998,
    options to purchase 10,000 shares at an exercise price of $10.00 per share
    in 1999, options to purchase 15,000 shares at an exercise price of $10.13
    per share in 2000 and options to purchase 10,000 shares at an exercise price
    of $10.40 in early 2001.

STOCK OPTIONS GRANTED

    The following table contains information concerning the grant of stock
options during 2000 to the named executive officers.

                     OPTION/SAR GRANTS IN LAST FISCAL YEAR
                              [INDIVIDUAL GRANTS]

<TABLE>
<CAPTION>
                                             NUMBER OF     PERCENT OF TOTAL
                                             SECURITIES      OPTIONS/SARS
                                             UNDERLYING       GRANTED TO
                                            OPTIONS/SARS    EMPLOYEES AND     EXERCISE OR
NAME AND TITLE                                  (#)             OTHERS        BASE PRICE    EXPIRATION DATE
--------------                              ------------   ----------------   -----------   ---------------
<S>                                         <C>            <C>                <C>           <C>
Timothy I. Warren, President and CEO......     15,000             53%           $10.13         1/11/2011
</TABLE>

    The following chart details the exercise of any outstanding options and the
number and value of unexercised stock options.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
                                                                             NUMBER OF
                                                                            SECURITIES       VALUE OF
                                                                            UNDERLYING      UNEXERCISED
                                                                            UNEXERCISED    IN-THE-MONEY
                                                                           OPTIONS/SARS    OPTIONS/SARS
                                                    SHARES                   AT FY-END       AT FY-END
                                                   ACQUIRED      VALUE     EXERCISABLE/    EXERCISABLE/
NAME                                              ON EXERCISE   REALIZED   UNEXERCISABLE   UNEXERCISABLE
----                                              -----------   --------   -------------   -------------
<S>                                               <C>           <C>        <C>             <C>
Timothy I. Warren, President and CEO............       0           0         50,000/0       $100,000/$0
</TABLE>

EMPLOYMENT AGREEMENTS

    Timothy I. Warren has entered into an employment agreement with the Bank to
serve as President and Chief Executive Officer of the Company and the Bank
providing for an annual minimum base salary of $140,000. If the Bank and Company
receive certain composite ratings received in their most recent report of
examination by their primary Federal regulatory authority, Mr. Warren may
receive a performance bonus ranging from 0% to 50% of annual base salary which
will be awarded based upon the Board of Directors' evaluation of the Bank's
current condition and mutually agreed upon goals such as goals based upon the
Bank's performance.

    In addition, the Company has implemented an Employee Incentive Stock Option
Plan for employees of the Bank and reserved a total of 75,000 shares out of the
Company's total authorized shares for the plan. Options with respect to 71,500
shares have been issued, including options for 50,000 shares to Mr. Warren.

    Mr. Warren's employment agreement also provides for employee benefits such
as annual vacation, the use of a Bank-owned automobile, life and medical
insurance with dependent coverage, dental

                                       31
<PAGE>
insurance, expenses for attending trade association meetings and reimbursement
for reasonable related expenses for Mr. Warren and his spouse.

    In the event of termination, Mr. Warren is entitled to severence pay equal
to one month's pay for each year employed by the Bank. In addition,
Mr. Warren's employment agreement provides for a severance pay for Mr. Warren in
the event of Mr. Warren's termination (except for cause) after a change of
control of the Bank. Under the employment agreement, the term "control" means
the acquisition of 25 percent or more of the voting securities of the Bank by
any person, or persons acting as a group within the meaning of Section 13(d) of
the Securities Exchange Act of 1934 or the acquisition of between 10% and 25% if
the Board of Directors of the Bank or the Comptroller of the Currency, the FDIC
or the Federal Reserve Bank has made a determination that such acquisition
constitutes or will constitute control of the Bank.

    The employment agreement provides that if the employee is terminated after
1,095 days as a result of change of control, the employee shall be entitled to
receive his salary through the last day of the calendar month of the
termination, or payment in lieu of the notice period. In addition, Mr. Warren
would receive an amount equal to three times his then existing annual base
salary. The employment agreement further provides that the payment shall also be
made in connection with, or within 120 days after, a change of control of the
Bank if such change of control was opposed by Mr. Warren or the Bank's Board of
Directors. This payment would be in addition to any amount otherwise owed to the
employee pursuant to the employment agreement.

    In the event of a change of control, the following items would be
automatically considered due and payable to Mr. Warren under the employment
agreement: (i) non-forfeitable deferred compensation shall be paid in full:
(ii) long-term performance plan objective payments as described in Section II,
2, f, shall be declared accomplished and earned based upon performance up to
date of the change of control; and (iii) in the event that the employee is a
participant in a restricted stock plan, or share option plan, and such plan is
terminated involuntarily as a result of the change of control, all stock and
options shall be declared 100% vested and distributed.

DIRECTOR COMPENSATION

    The Company and the Bank did not compensate any of its directors for their
services as directors prior to 1999. The directors of the Bank began to receive
a fee for attending full Board and Board committee meetings during 1999. The
committee meeting fees are $25 per meeting, while the full Board meeting fees
were $210 per meeting from March 1999 through June 1999, increasing to $320 per
meeting based on increased Bank profitability from July through December 1999.
The full Board meeting fee was $225 per meeting during the period from January
through June and $200 per meeting from July through December 2000.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

                             PRINCIPAL SHAREHOLDERS

    The following table sets forth certain information regarding the shares of
common stock of the Company owned as of March 5, 2001 (i) by each person who
beneficially owns more than 5% of shares

                                       32
<PAGE>
of common stock of the Company, (ii) by each of the Company's directors, and
(iii) by all directors and executive officers of the Company as a group.

<TABLE>
<CAPTION>
                                                                           PERCENTAGE
                                                               NUMBER     OWNERSHIP(3)
NAME OF BENEFICIAL OWNER(1)                                   OF SHARES   AND OPTIONS
---------------------------                                   ---------   ------------
<S>                                                           <C>         <C>
Lawrence Alligood, Director ................................     20,000        2.5%

John B. Bohannon, Organizer and Director ...................  (4)20,100        2.5%

Ann C. Carter, Organizer and Director ......................     10,000        1.2%

J. Wayne Garner, Director ..................................      8,750        1.1%

Lester H. Harmon, Organizer and Director ...................     11,000        1.4%

William P. Johnson, Organizer and Director .................     60,200        7.5%
  306 Tanner Street
  Carrollton, Georgia 30117

Phillip Kauffman, Organizer and Director ...................  (6)80,631       10.1%
  500 Ind. Ct. West
  Villa Rica, Georgia 30180

Jeff R. Matthews, Organizer and Director ...................  (7)32,200

Charles J. Puckett, Organizer and Director .................  (8)97,780       12.2%
  2208 Bankhead Highway
  Carrollton, Georgia 30117

William C. Seaton, Organizer and Director ..................     10,000        1.2%

Mark S. Swindle, Organizer and Director ....................     10,250        1.3%

Timothy I. Warren, President, Chief Executive Officer,
  Organizer and Director ...................................  (9)61,075        7.2%

All current directors and executive(2)(3) officers as a         441,886       50.9%
  group (14 persons) .......................................
</TABLE>

------------------------

(1) Except as otherwise indicated, the persons named in the above table have
    sole voting and investment power with respect to all shares shown as
    beneficially owned by them. The information as to beneficial ownership has
    been furnished by the respective persons listed in the above table.

(2) Includes shares deemed to be beneficially owned through the right to
    exercise options (which will be granted) within 60 days.

(3) Based upon 800,000 shares outstanding as of March 5, 2001.

(4) Includes 7,500 shares held by Mr. Bohannon's wife and 12,600 shares owned
    jointly by them and with respect to which Mr. Bohannon will share voting and
    investment power.

(5) Includes 200 shares held by Mr. Johnson's wife.

(6) Includes 21,631 shares held by Mr. Kauffman's wife or minor child.

(7) Includes 2,700 shares held by Mr. Matthews as custodian for his minor
    children.

(8) Includes 10,000 shares held by Mr. Puckett's spouse and 39,920 held by the
    Puckett Family Partnership L.P.

(9) Includes 100 Shares owned by Mr. Warren's wife and 300 shares held by
    Mr. Warren as custodian for his minor children. Includes 50,000 shares that
    are subject to currently exercisable options.

                                       33
<PAGE>
ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

    Certain executive officers and directors of the Company and the Bank, and
principal shareholders of the Company and affiliates of such persons have, from
time to time, will engage in banking transactions with the Bank. All loans or
other extensions of credit will be made by the Bank to such individuals in the
ordinary course of business on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with unaffiliated parties and will be believed by management to not
involve more than the normal risk of collectibility or present other unfavorable
features. As of December 31, 2000, there were an aggregate of $4,661,000 of
loans and open lines of credit to executive officers and directors of the
Company and the Bank, and principal shareholders of the Company and affiliates
of such persons.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.

    (a) EXHIBITS

<TABLE>
<CAPTION>
       EXHIBIT
       NUMBERS
---------------------
<C>                     <S>
         3.1            Articles of Incorporation (Incorporated by reference to the
                        Company's Registration Statement on Form SB-1 (Registration
                        No. 333-12293) (the "SB-1"), Exhibit 3.1)

         3.2            Bylaws (Incorporated by reference to the SB-1, Exhibit 3.2)

           4            Description of the Company's $.01 par value common stock
                        (the "Common Stock") is contained at pages 28 through 32 of
                        the Company's prospectus relating to the minimum offering of
                        625,000 shares of Common Stock and maximum offering of
                        800,000 shares of Common Stock which is part of Registration
                        Statement under the Securities Act of 1933 on Form SB-1/A
                        filed with the Securities and Exchange Commission on
                        November 13, 1996 (Registration No. 333-12293) (the
                        "SB-1/A") (Incorporated by reference to the SB-1/A)

          11            Computation of Earnings per Share (Incorporated by reference
                        to Note 9 to Financial Statements filed as Exhibit 99
                        hereto)

          21            Subsidiaries of the Company (Incorporated by reference to
                        Exhibit 21 to the Company's Annual Report on Form 10-KSB for
                        the year ended December 31, 1997)

          99            Financial Statements from 2000 Annual Report to Shareholders
</TABLE>

    (b) REPORTS ON FORM 8-K

        No Reports on Form 8-K were filed during the fourth quarter of the year
    ended December 31, 2000.

                                       34
<PAGE>
                                   SIGNATURES

    In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
has duly caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.

<TABLE>
<S>                                                    <C>  <C>
                                                       PEOPLES BANCORP, INC.

Date: March 13, 2001                                   By:            /s/ TIMOTHY I. WARREN
                                                            -----------------------------------------
                                                                        Timothy I. Warren
                                                                            PRESIDENT
</TABLE>

    In accordance with the Exchange Act, this Report has been signed below by
the following persons on behalf of the Registrant and in the capacities
indicated on the dates indicated:

<TABLE>
<CAPTION>
                      SIGNATURE                                   TITLE                    DATE
                      ---------                                   -----                    ----
<C>                                                    <S>                          <C>
                /s/ TIMOTHY I. WARREN                  President and Director
     -------------------------------------------         (Principal Executive         March 13, 2001
                  Timothy I. Warren                      Officer)

              /s/ LAWRENCE J. ALLIGOOD
     -------------------------------------------       Director                       March 13, 2001
                Lawrence J. Alligood

                /s/ JOHN B. BOHANNON
     -------------------------------------------       Director                       March 13, 2001
                  John B. Bohannon

                  /s/ ANN C. CARTER
     -------------------------------------------       Director                       March 13, 2001
                    Ann C. Carter

                 /s/ J. WAYNE GARNER
     -------------------------------------------       Director                       March 13, 2001
                   J. Wayne Garner

                /s/ LESTER H. HARMON
     -------------------------------------------       Director                       March 13, 2001
                  Lester H. Harmon

               /s/ WILLIAM P. JOHNSON
     -------------------------------------------       Director                       March 13, 2001
                 William P. Johnson

                /s/ PHILLIP KAUFFMAN
     -------------------------------------------       Director                       March 13, 2001
                  Phillip Kauffman
</TABLE>

                                       35
<PAGE>

<TABLE>
<CAPTION>
                      SIGNATURE                                   TITLE                    DATE
                      ---------                                   -----                    ----
<C>                                                    <S>                          <C>
                 /s/ JEFF R. MATHEWS
     -------------------------------------------       Director                       March 13, 2001
                   Jeff R. Mathews

               /s/ CHARLES J. PUCKETT
     -------------------------------------------       Director                       March 13, 2001
                 Charles J. Puckett

                /s/ WILLIAM C. SEATON
     -------------------------------------------       Director                       March 13, 2001
                  William C. Seaton

                 /s/ MARK S. SWINDLE
     -------------------------------------------       Director                       March 13, 2001
                   Mark S. Swindle

                                                       Senior Vice President and
                /s/ ELAINE B. LOVVORN                    Chief Financial Officer
     -------------------------------------------         (Principal Financial and     March 13, 2001
                  Elaine B. Lovvorn                      Accounting Officer)
</TABLE>

                                       36
<PAGE>
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(D) OF THE EXCHANGE ACT BY NON-REPORTING ISSUERS.

    Copies of the annual report and proxy statement provided to the Issuer's
shareholders for the Issuer's 2000 Annual Meeting of Shareholders will be
furnished to the Commission.

                                       37