<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-KSB

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

                   For the fiscal year ended December 31, 2003

                 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
                         OF THE SECURITIES ACT OF 1934.

              For the transition period from _________ to _________

                        Commission File Number: 333-19081

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

           GEORGIA                                      58-2265327
-------------------------------            -------------------------------------
(State or Other Jurisdiction of            (I.R.S.  Employer Identification No.)
Incorporation or Organization)

          165 Nash Street
       Lawrenceville, Georgia                             30045
----------------------------------------             -----------------
(Address of Principal Executive Offices)               (Zip Code)

                                 (770) 995-0000
                           ---------------------------
                           (Issuer's Telephone Number,
                              Including Area Code)

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

      Securities registered under Section 12(g) of the Exchange Act: None*

         *The issuer filed a Registration Statement on Form SB-2 (Registration
No. 333-19081) effective pursuant to the Securities Act of 1933, as amended, on
April 16, 1997. Accordingly, the Issuer files this report pursuant to Section
15(d) of the Securities Exchange Act of 1934, as amended, and Rule 15d-1 of the
regulations thereunder.

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

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

         The Issuer's revenues for the fiscal year ended December 31, 2003, were
$13,042,019.

         The aggregate market value of the voting and nonvoting common equity
held by persons other than directors and executive officers of the Registrant as
of March 15, 2004, was $22,948,827, based on a private sale price of $17.00 per
share.

         There were 1,716,708 shares of the Registrant's common stock
outstanding as of March 15, 2004.

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

                       DOCUMENT INCORPORATED BY REFERENCE

         Portions of the Proxy Statement for the 2004 Annual Meeting of
Shareholders to be filed with the Securities and Exchange Commission within 120
days of the Registrant's 2003 fiscal year end are incorporated by reference into
Part III of this Report.

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                                TABLE OF CONTENTS

<TABLE>
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                                                                                                              PAGE
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<S>                                                                                                           <C>
PART I....................................................................................................      1
      ITEM 1.      DESCRIPTION OF BUSINESS................................................................      1
      ITEM 2.      DESCRIPTION OF PROPERTY................................................................      8
      ITEM 3.      LEGAL PROCEEDINGS......................................................................      8
      ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS....................................      8

PART II...................................................................................................      8
      ITEM 5.      MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS...............................      8
      ITEM 6.      MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION..............................      8
      ITEM 7.      FINANCIAL STATEMENTS...................................................................     23
      ITEM 8.      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                   DISCLOSURE.............................................................................     24

PART III..................................................................................................     24
      ITEM 9.      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
                   SECTION 16(A) OF THE EXCHANGE ACT......................................................     24
      ITEM 10.     EXECUTIVE COMPENSATION.................................................................     24
      ITEM 11.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                   STOCKHOLDER MATTERS....................................................................     24
      ITEM 12.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.........................................     24
      ITEM 13.     EXHIBITS AND REPORTS ON FORM 8-K.......................................................     24
      ITEM 14.     PRINCIPAL ACCOUNTANT FEES AND SERVICES.................................................     25
</TABLE>

                                       -i-

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                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

GBC BANCORP

         We were organized in August 1996 as a Georgia corporation for the
purpose of acquiring all of the common stock of Gwinnett Banking Company, a
Georgia bank that opened for business in October 1997 (the "Bank"). We are a
bank holding company within the meaning of the Bank Holding Company Act of 1956,
and the Georgia Bank Holding Company Act. We were organized to facilitate the
Bank's ability to serve its customers' requirements for financial services. The
holding company structure provides flexibility for expansion of our banking
business through the possible acquisition of other financial institutions and
the provision of additional banking-related services that the traditional
commercial bank may not provide under present laws. We have no present plans to
acquire any operating subsidiaries other than the Bank. It is expected, however,
that we may make additional acquisitions in the future if such acquisitions are
deemed to be in the best interest of our shareholders. Any acquisitions will be
subject to certain regulatory approvals and requirements.

GWINNETT BANKING COMPANY

         The Bank is a full service commercial bank located at 165 Nash Street,
Lawrenceville, Gwinnett County, Georgia and 11675 Rainwater Drive, Alpharetta,
Fulton County, Georgia. The Bank's primary service area is Gwinnett County,
Georgia. The Bank, however, also serves the adjacent counties, or parts thereof,
of Cobb, DeKalb and Fulton. The principal business of the Bank is to accept
deposits from the public and to make loans and other investments. The principal
source of funds for the Bank's loans and investments are demand, time, savings,
and other deposits (including negotiable orders of withdrawal or NOW accounts),
amortization and prepayments of loans and borrowings. The principal sources of
income for the Bank are interest and fees collected on loans, interest and
dividends collected on other investments and service charges. The principal
expenses of the Bank are interest paid on savings and other deposits (including
NOW accounts), interest paid on other borrowings by the Bank, employee
compensation, office expenses and other overhead expenses.

INDUSTRY AND COMPETITION

         We believe that Gwinnett County has a very active and competitive
banking market. The largest financial institutions serving Gwinnett County are
Bank of America, Wachovia, N.A., SunTrust Bank, and SouthTrust Bank, N.A. The
largest Gwinnett County based banks are The Brand Banking Company,
Lawrenceville; Peoples Bank & Trust, Buford; and First Capital Bank, Norcross.
There are approximately 16 financial institutions that have offices in the
immediate vicinity of the main office of the Bank.

EMPLOYEES

         The Bank had 42 total employees as of March 15, 2004, all of whom were
full-time employees. GBC Bancorp does not have any employees who are not also
employees of the Bank.

ENVIRONMENTAL LAWS

         Compliance with environmental laws has not had a material impact on the
operations of the Bank or the Company, although the Bank faces potential
liability or losses if its borrowers fail to comply with such laws and the Bank
acquires contaminated properties in foreclosure.

SUPERVISION AND REGULATION

         General

         We are subject to state and federal banking laws and regulations that
impose specific requirements or restrictions and provide for general regulatory
oversight over virtually all aspects of our operations. These laws and

<PAGE>

regulations generally are intended to protect depositors, not shareholders. This
discussion is only a summary of various statutory and regulatory provisions.
This summary is qualified by reference to the particular statutory and
regulatory provisions. Any change in applicable laws or regulations may have a
material effect on our business and prospects.

         Legislative changes and the policies of various regulatory authorities
may affect our operations. We are unable to predict the nature or the extent of
the effect on our business and earnings that fiscal or monetary policies,
economic control or new federal or state legislation may have in the future.

         The Company

         GBC Bancorp is a bank holding company registered with the Board of
Governors of the Federal Reserve System and the Georgia Department of Banking
and Finance under the Bank Holding Company Act of 1956, as amended, and the
Georgia Bank Holding Company Act. We are subject to the supervision, examination
and reporting requirements of the Bank Holding Company Act and the regulations
of the Federal Reserve, and the Georgia Bank Holding Company Act and the
regulations of the Georgia Department of Banking and Finance.

         The Bank Holding Company Act requires every bank holding company to
obtain the prior approval of the Federal Reserve before:

         -        it may acquire direct or indirect ownership or control of any
                  voting shares of any bank if, after such acquisition, the bank
                  holding company will directly or indirectly own or control
                  more than 5% of the voting shares of the bank;

         -        it or any of its subsidiaries, other than a bank, may acquire
                  all or substantially all of the assets of any bank; or

         -        it may merge or consolidate with any other bank holding
                  company.

         The Bank Holding Company Act further provides that the Federal Reserve
may not approve any transaction that would result in a monopoly or would be in
furtherance of any combination or conspiracy to monopolize or attempt to
monopolize the business of banking in any part of the United States. In
addition, the Federal Reserve will not approve a transaction the effect of which
may be substantially to lessen competition or to tend to create a monopoly, or
that in any other manner would be in restraint of trade. However, such
transactions may be approved in the event the anti-competitive effects of the
proposed transaction are clearly outweighed by the public interest in meeting
the convenience and needs of the communities to be served. The Federal Reserve
is also required to consider the financial and managerial resources and future
prospects of the bank holding companies and banks involved and the convenience
and needs of the communities to be served. Consideration of financial resources
generally focuses on capital adequacy, and consideration of convenience and
needs issues generally focuses on the parties' performance under the Community
Reinvestment Act of 1977.

         The Bank Holding Company Act generally prohibits a bank holding company
from engaging in activities other than banking or managing or controlling banks
or other permissible subsidiaries. Bank holding companies are also generally
prohibited from acquiring or retaining direct or indirect control of any company
engaged in any activities other than those activities determined by the Federal
Reserve to be so closely related to banking or managing or controlling banks as
to be a proper incident thereto. Activities determined by the Federal Reserve to
fall within this category include acquiring or servicing loans, leasing personal
property, conducting discount securities brokerage activities, performing
certain data processing services, acting as agent or broker in selling certain
types of credit insurance, and performing certain insurance underwriting
activities. The BHC Act does not place territorial limitations on permissible
non-banking activities of bank holding companies. The Federal Reserve has the
power to order a bank holding company or its subsidiaries to terminate any
non-banking activity when it has reasonable cause to believe that continuation
of such activity constitutes a serious risk to the safety and soundness of any
bank subsidiary of that bank holding company.

                                      - 2 -

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         Although the activities of bank holding companies have traditionally
been limited to the business of banking and activities closely related or
incidental to banking (as discussed above), the Gramm-Leach-Bliley Act of 1999
relaxed the previous limitations thus permitting bank holding companies to
engage in a broader range of financial activities. Specifically, bank holding
companies may elect to become financial holding companies which may affiliate
with securities firms and insurance companies and engage in other activities
that are financial in nature. Among the activities that are deemed "financial in
nature" include:

         -        lending, exchanging, transferring, investing for others or
                  safeguarding money or securities;

         -        insuring, guaranteeing, or indemnifying against loss, harm,
                  damage, illness, disability, or death, or providing and
                  issuing annuities, and acting as principal, agent, or broker
                  with respect thereto;

         -        providing financial, investment, or economic advisory
                  services, including advising an investment company;

         -        issuing or selling instruments representing interests in pools
                  of assets permissible for a bank to hold directly; and

         -        underwriting, dealing in or making a market in securities.

         A bank holding company may become a financial holding company under
this statute only if each of its subsidiary banks is well capitalized, is well
managed and has at least a satisfactory rating under the Community Reinvestment
Act. A bank holding company that falls out of compliance with such requirement
may be required to cease engaging in certain activities. Any bank holding
company that does not elect to become a financial holding company remains
subject to the current restrictions of the Act.

         Under this legislation, the Federal Reserve Board serves as the primary
"umbrella" regulator of financial holding companies with supervisory authority
over each parent company and limited authority over its subsidiaries. The
primary regulator of each subsidiary of a financial holding company will depend
on the type of activity conducted by the subsidiary. For example, broker-dealer
subsidiaries will be regulated largely by securities regulators and insurance
subsidiaries will be regulated largely by insurance authorities.

         GBC Bancorp has no immediate plans to register as a financial holding
company.

         The Bank

         The Bank is incorporated under the laws of the State of Georgia and is
subject to examination by the Georgia Department of Banking and Finance. The
Georgia Department of Banking and Finance regulates all areas of the Bank's
commercial banking operations, including, without limitation, loans, deposits,
reserves, mergers, reorganizations, issuance of securities, payment of
dividends, and the establishment of branches.

         The Bank is also a member of the Federal Deposit Insurance Corporation,
and as such, the FDIC, to the maximum extent provided by law, insures its
deposits. The Bank is also subject to numerous state and federal statutes and
regulations that affect its business, activities, and operations. The FDIC and
the Georgia Department of Banking and Finance regularly examine the operations
of the Bank and have the power to prevent the continuance or development of
unsafe or unsound banking practices or other violations of law.

         Payment of Dividends

         We are a legal entity separate and distinct from our banking
subsidiary. Our principal source of cash flow, including cash flow to pay
dividends to our shareholders, is dividends from the Bank. There are statutory
and regulatory limitations on the payment of dividends by the Bank, as well as
by us to our shareholders.

         If, in the opinion of the federal banking regulators, a depository
institution under its jurisdiction is engaged in or is about to engage in an
unsafe or unsound practice (which, depending on the financial condition of the

                                      - 3 -

<PAGE>

depository institution, could include the payment of dividends), such authority
may require, after notice and hearing, that such institution cease and desist
from such practice. The federal banking agencies have indicated that paying
dividends that deplete a depository institution's capital base to an inadequate
level would be an unsafe and unsound banking practice. Under the Federal Deposit
Insurance Corporation Improvement Act of 1991 ("FDICIA"), a depository
institution may not pay any dividend if payment would cause it to become
undercapitalized or if it already is undercapitalized. Moreover, the federal
agencies have issued policy statements that provide that bank holding companies
and insured banks should generally only pay dividends out of current operating
earnings.

         In addition, the Georgia Financial Institutions Code and the
regulations of the Georgia Department of Banking and Finance provide:

         -        that dividends of cash or property may be paid only out of the
                  retained earnings of the Bank;

         -        that dividends may not be paid if the Bank's paid-in capital
                  and retained earnings which are set aside for dividend payment
                  and other distributions do not, in combination, equal at least
                  20% of the Bank's capital stock; and

         -        that dividends may not be paid without prior approval of the
                  Georgia Department of Banking and Finance if:

                  -        the Bank's total classified assets exceed 80% of its
                           equity capital;

                  -        the aggregate amount of dividends to be declared
                           exceeds 50% of the Bank's net profits after taxes but
                           before dividends for the previous calendar year; or

                  -        the ratio of equity capital to total adjusted assets
                           is less than 6%.

         Applying these dividend restrictions, and without prior approval of the
Georgia Department of Banking and Finance, as of December 31, 2002, the Bank
could pay a $499,000 dividend to us. Our ability to pay dividends may also be
affected or limited by other factors, such as the requirement to maintain
adequate capital above regulatory guidelines.

         Transactions with Affiliates and Insiders

         We are a legal entity separate and distinct from the Bank. Various
legal limitations restrict the Bank from lending or otherwise supplying funds to
us and our non-bank subsidiaries, all of which are deemed to be "affiliates" of
the Bank for the purposes of these restrictions. We are subject to Section 23A
of the Federal Reserve Act. Section 23A defines "covered transactions," which
include extensions of credit, and limits a bank's covered transactions with any
affiliate to 10% of such bank's capital and surplus and with all affiliates to
20% of such 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 banks and their 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 acceptable collateral, generally United
States government or agency securities. We are also subject to Section 23B of
the Federal Reserve Act, which generally limits covered and other transactions
between a bank and its affiliates to terms and under circumstances, including
credit standards, that are substantially the same or at least as favorable to
the bank as prevailing at the time for transactions with unaffiliated companies.

         Capital Adequacy

         We are required to comply with the capital adequacy standards
established by the Federal Reserve, and the Federal Deposit Insurance
Corporation in the case of the Bank. There are two basic measures of capital
adequacy for bank holding companies that have been promulgated by the Federal
Reserve: a risk-based measure and a leverage measure. All applicable capital
standards must be satisfied for a bank holding company to be considered in
compliance.

                                      - 4 -

<PAGE>

         The risk-based capital standards are designed to make regulatory
capital requirements more sensitive to differences in risk profiles among banks
and bank holding companies, to account for off-balance sheet exposure, and to
minimize disincentives for holding liquid, low-risk assets. Assets and
off-balance-sheet items are assigned to broad risk categories, each with
appropriate weights. The resulting capital ratios represent capital as a
percentage of total risk-weighted assets and off-balance sheet items.

         The minimum guideline for the ratio of total capital to risk-weighted
assets is 8.0%. At least half of total capital must be comprised of Tier 1
Capital, which is common stock, undivided profits, minority interests in the
equity accounts of consolidated subsidiaries and noncumulative perpetual
preferred stock, less goodwill and certain other intangible assets. The
remainder may consist of Tier 2 Capital, which is subordinated debt, other
preferred stock and a limited amount of loan loss reserves. As of December 31,
2003, GBC Bancorp's total risk-based capital ratio and its Tier 1 risk-based
capital ratio were 11.32% and 10.09%, respectively.

         In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio of Tier 1 Capital to average assets, less goodwill and certain other
intangible assets, of 3.0% for bank holding companies that meet specified
criteria. All other bank holding companies generally are required to maintain a
leverage ratio of at least 3.0%, plus an additional cushion of 100 to 200 basis
points. GBC Bancorp's leverage ratio as of December 31, 2003 was 9.40%. The
guidelines also provide that bank holding companies experiencing internal growth
or making acquisitions will be expected to maintain strong capital positions
substantially above the minimum supervisory levels without significant reliance
on intangible assets. Furthermore, the Federal Reserve has indicated that it
will consider a "tangible Tier 1 Capital leverage ratio" and other indicia of
capital strength in evaluating proposals for expansion or new activities. The
Federal Reserve has not advised GBC Bancorp's of any specific minimum leverage
ratio or tangible Tier 1 leverage ratio applicable to it.

         The Bank is subject to risk-based and leverage capital requirements
adopted by the Federal Deposit Insurance Corporation, which are substantially
similar to those adopted by the Federal Reserve for bank holding companies. The
Bank was in compliance with applicable minimum capital requirements as of
December 31, 2003. We have not been advised by any federal banking agency of any
specific capital ratio requirement applicable to the Bank.

         Failure to meet capital guidelines could subject a bank to a variety of
enforcement remedies, including issuance of a capital directive, the termination
of deposit insurance by the Federal Deposit Insurance Corporation, a prohibition
on the taking of brokered deposits, and certain other restrictions on its
business. Substantial additional restrictions can be imposed upon FDIC-insured
depository institutions that fail to meet applicable capital requirements.

         The federal bank regulators continue to indicate their desire to raise
capital requirements applicable to banking organizations beyond their current
levels. In this regard, the Federal Reserve and the Federal Deposit Insurance
Corporation have recently adopted regulations requiring regulators to consider
interest rate risk in the evaluation of a bank's capital adequacy. The bank
regulatory agencies have recently established a methodology for evaluating
interest rate risk which sets forth guidelines for banks with excessive interest
rate risk exposure to hold additional amounts of capital against such exposures.

         In addition to the capital standards imposed by federal banking
regulators, the Georgia Department of Banking and Finance imposed a requirement
for the Bank to maintain a primary capital ratio of not less than 8.0% during
the first three years of the Bank's operation. Following the expiration of this
initial period, the Bank became subject to a 6.0% primary capital ratio. Such
standard is calculated as the ratio of total equity to total assets, each as
adjusted for unrealized gains and losses on securities and allowance for loan
losses.

         Support of Subsidiary Institution

         Under Federal Reserve policy, we are expected to act as a source of
financial strength for, and to commit resources to support, the Bank. This
support may be required at times when, absent such Federal Reserve policy, we
may not be inclined to provide such support. In addition, any capital loans by a
bank holding company to its banking subsidiary are subordinate in right of
payment to deposits and to certain other indebtedness of such bank.

                                      - 5 -

<PAGE>

In the event of a bank holding company's bankruptcy, any commitment by a bank
holding company to a federal bank regulatory agency to maintain the capital of a
banking subsidiary will be assumed by the bankruptcy trustee and entitled to a
priority of payment.

         FDIC Insurance Assessments

         The Federal Deposit Insurance Corporation has adopted a risk-based
assessment system for insured depository institutions that takes into account
the risks attributable to different categories and concentrations of assets and
liabilities. The risk-based assessment system assigns an institution to one of
three capital categories: well capitalized, adequately capitalized, and
undercapitalized. These three categories are substantially similar to the prompt
corrective action categories described above, with the "undercapitalized"
category including institutions that are undercapitalized, significantly
undercapitalized, and critically undercapitalized for prompt corrective action
purposes. The FDIC also assigns an institution to one of three supervisory
subgroups within each capital group. The supervisory subgroup to which an
institution is assigned is based on an evaluation provided to the FDIC by the
institution's primary federal regulator and information which the FDIC
determines to be relevant to the risk posed to the deposit insurance funds. An
institution's insurance assessment rate is then determined based on the capital
category and supervisory category to which it is assigned. The combination of
capital groups and supervisory subgroups results in nine assessment risk
classifications to which different assessment rates are applied.

         The FDIC may terminate the insurance of the deposits of the Bank upon a
finding that the bank has engaged in unsafe and unsound practices, is in an
unsafe or unsound condition to continue operations, or has violated any
applicable law, regulation, order, or condition the FDIC has imposed.

         Safety and Soundness Standards

         The federal bank regulatory agencies have adopted a set of guidelines
prescribing safety and soundness standards. The guidelines establish general
standards relating to internal controls and information systems, internal audit
systems, loan documentation, credit underwriting, interest rate exposure, asset
growth, asset quality, earnings and compensation, fees and benefits. In general,
the guidelines require, among other things, appropriate systems and practices to
identify and manage the risks and exposures specified in the guidelines. The
guidelines prohibit excessive compensation as an unsafe and unsound practice and
describe compensation as excessive when the amounts paid are unreasonable or
disproportionate to the services performed by an executive officer, employee,
director, or principal shareholder. In addition, the agencies adopted
regulations that authorize, but do not require, an agency to order an
institution that has been given notice by an agency that it is not satisfying
any of such safety and soundness standards to submit a compliance plan. If an
institution fails to submit or implement such a plan, the agency must issue an
order directing action to correct the deficiency and may require other actions
of the types to which an undercapitalized institution is subject under the
"prompt corrective action" provisions described above. If an institution fails
to comply with such an order, the agency may seek to enforce such order in
judicial proceedings and to impose civil money penalties.

         Community Reinvestment Act

         The Community Reinvestment Act requires federal bank regulatory
agencies to encourage financial institutions to meet the credit needs of low-
and moderate-income borrowers in their local communities. An institution's size
and business strategy determines the type of examination that it will receive.
Large, retail-oriented institutions will be examined using a performance-based
lending, investment and service test. Small institutions will be examined using
a streamlined approach. All institutions may opt to be evaluated under a
strategic plan formulated with community input and pre-approved by the bank
regulatory agency.

         Community Reinvestment Act regulations provide for certain disclosure
obligations. Each institution must post a notice advising the public of its
right to comment to the institution and its regulator on the institution's
Community Reinvestment Act performance and to review the institution's Community
Reinvestment Act public file. Each lending institution must maintain for public
inspection a public file that includes a listing of branch locations and
services, a summary of lending activity, a map of its communities and any
written comments from the public on its performance in meeting community credit
needs. The Community Reinvestment Act requires public disclosure of a financial
institution's written Community Reinvestment Act evaluations. This promotes
enforcement of

                                      - 6 -

<PAGE>

Community Reinvestment Act requirements by providing the public with the status
of a particular institution's community reinvestment record.

         The Gramm-Leach-Bliley Act makes various changes to the CRA. Among
other changes, CRA agreements with private parties must be disclosed and annual
CRA reports must be made to a bank's primary federal regulator. A bank holding
company will not be permitted to become a financial holding company and no new
activities authorized under this Act may be commenced by a holding company if
any of its bank subsidiaries received less than a "satisfactory" CRA rating in
its latest CRA examination.

         Anti-Terrorism Legislation

         In the wake of the tragic events of September 11th, 2001, on October
26, 2001, the President signed the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
Patriot) Act of 2001. Under the USA Patriot Act, financial institutions are
subject to prohibitions against specified financial transactions and account
relationships as well as enhanced due diligence and "know your customer"
standards in their dealings with foreign financial institutions and foreign
customers. For example, the enhanced due diligence policies, procedures and
controls generally require financial institutions to take reasonable steps:

         -        to conduct enhanced scrutiny of account relationships to guard
                  against money laundering and report any suspicious
                  transactions;

         -        to ascertain the identity of the nominal and beneficial owners
                  of, and the source of funds deposited into, each account as
                  needed to guard against money laundering and report any
                  suspicious transactions;

         -        to ascertain for any foreign bank, the shares of which are not
                  publicly traded, the identity of the owners of the foreign
                  bank and the nature and extent of the ownership interest of
                  each such owner; and

         -        to ascertain whether any foreign bank provides correspondent
                  accounts to other foreign banks and, if so, the identity of
                  those foreign banks and related due diligence information.

         Under the USA Patriot Act, financial institutions had until April 25,
2002, to establish anti-money laundering programs. The USA Patriot Act sets
forth minimum standards for these programs, including:

         -        the development of internal policies, procedures and controls;

         -        the designation of a compliance officer;

         -        an ongoing employee training program; and

         -        an independent audit function to test the programs.

         Pursuant to the mandate of the USA Patriot Act, the Secretary of the
Treasury issued regulations effective April 24, 2002, applicable to financial
institutions. Because all federally insured depository institutions are required
to have anti-money laundering programs, the regulations provide that a financial
institution which is subject to regulation by a "federal functional" is in
compliance with the regulations if it complies with the rules of its primary
federal regulator governing the establishment and maintenance of anti-money
laundering programs.

         In addition, the USA Patriot Act authorizes the Secretary of the
Treasury to adopt rules increasing the cooperation and information sharing
between financial institutions, regulators and law enforcement authorities
regarding individuals, entities and organizations engaged in, or reasonably
suspected based on credible evidence of engaging in, terrorist acts or money
laundering activities. Any financial institution complying with these rules will
not be deemed to have violated the privacy requirements discussed above.

                                      - 7 -

<PAGE>

ITEM 2. DESCRIPTION OF PROPERTY

         The Bank leases its offices located at 165 Nash Street, Lawrenceville,
Gwinnett County, Georgia. The Bank also leases its branch banking offices
located at 11675 Rainwater Drive, Suite 150, Alpharetta, Fulton County, Georgia
30004.

ITEM 3. LEGAL PROCEEDINGS

         We are subject to claims and litigation in the ordinary course of
business. We believe that any pending claims and litigation will not have a
material adverse effect on our consolidated position.

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

         Not Applicable.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         There is currently no public trading market for shares of our common
stock and it is not likely that a public trading market will develop for our
common stock in the future. There are no present plans for our common stock to
be traded on any stock exchange or over-the-counter market. For the year ended
December 31, 2003, there were approximately 24 private trades of shares of our
common stock.

         As of March 15, 2004, there were approximately 750 holders of our
common stock.

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

         Subject to certain conditions imposed by our regulators, we, as the
sole holder of common stock of the Bank, are entitled to such dividends as may
be declared from time to time by the Board of Directors of the Bank out of funds
legally available therefor. Dividends paid may not exceed 50% of net profits
after taxes for the previous fiscal year without prior approval of the Georgia
Department of Banking and Finance. The Bank may not pay cumulative dividends on
its common stock.

         In the absence of other activities conducted by us, our ability to pay
dividends will depend upon the earnings of the Bank. However, we cannot assure
the future payment of dividends, either in cash or in stock.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         The following is a discussion of our financial condition and the
financial condition of our bank subsidiary, Gwinnett Banking Company, at
December 31, 2003 and 2002 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.

                                      - 8 -

<PAGE>

FORWARD-LOOKING STATEMENTS

         We may from time to time make written or oral forward-looking
statements, including statements contained in our filings with the Securities
and Exchange Commission and 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.
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 these factors are not exclusive. We do not
undertake to update any forward-looking statement that may be made from time to
time by, or on behalf of, us.

OVERVIEW

         Our 2003 results were highlighted by improved profitability and
continued loan and deposit growth. Our net income increased to $1,975,000 as
compared to $955,000 in 2002, primarily due to an increase in loan interest
income associated with a substantial growth in loans, increase in gain on sale
of SBA loans due to increased SBA volume with only a slight increase in interest
expense even though deposits grew substantially.

FINANCIAL CONDITION AT DECEMBER 31, 2003 AND 2002

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

<TABLE>
<CAPTION>
                                                                                         DECEMBER 31,
                                                                            -------------------------------------
                                                                                2003                     2002
                                                                            ------------             ------------
                                                                                    (DOLLARS IN THOUSANDS)
<S>                                                                         <C>                      <C>
Cash and due from banks...........................................          $      3,373             $      3,360
Federal funds sold................................................                 1,536                   10,827
Securities........................................................                22,501                   20,282
Loans, net........................................................               212,108                  157,992
Premises and equipment............................................                   496                      626
Other assets......................................................                 7,442                    5,119
                                                                            ------------             ------------

                                                                            $    247,456             $    198,206
                                                                            ============             ============

Total deposits....................................................          $    222,051             $    174,784
Repurchase agreements.............................................                   353                      541
Other liabilities.................................................                 1,735                    1,451
Stockholders' equity..............................................                23,317                   21,430
                                                                            ------------             ------------

                                                                            $    247,456             $    198,206
                                                                            ============             ============
</TABLE>

FINANCIAL CONDITION AT DECEMBER 31, 2003 AND 2002

         As of December 31, 2003, we had total assets of $247 million, an
increase of 25% over December 31, 2002. Total interest-earning assets were $239
million at December 31, 2003 or 97% of total assets as compared to 97% of total
assets at December 31, 2002. Our primary interest-earning assets at December 31,
2003 were loans,

                                      - 9 -

<PAGE>

which made up 90% of total interest-earning assets as compared to 84% at
December 31, 2002. Our loan to deposit ratio was 97% at December 31, 2003 as
compared to 92% at December 31, 2002. Deposit growth of $47 million and a
decrease in federal funds sold of $9 million funded loan growth of $55 million.

         Our securities portfolio, consisting of U.S. Agency, State and
municipal, and mortgage-backed securities, amounted to $22 million at December
31, 2003. Unrealized gains on securities amounted to $157,000 at December 31,
2003 as compared to an unrealized gain of $308,000 at December 31, 2002.
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 74% of our loan portfolio collateralized by real estate located
in our primary market area of Gwinnett County, Georgia and surrounding counties.
Our real estate construction portfolio consists of loans collateralized by loans
to build one- to four-family residential properties. We generally require that
loans collateralized by real estate not exceed 80%-85% of the collateral value.

         The remaining 26% 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 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
our other needs. Traditional sources of liquidity include asset maturities and
growth in core deposits. A company may achieve its desired liquidity objectives
from the management of assets and liabilities and through funds provided by
operations. Funds invested in short-term marketable instruments and the
continuous maturing of other earning assets are sources of liquidity from the
asset perspective. The liability base provides sources of liquidity through
deposit growth, the maturity structure of liabilities, and accessibility to
market sources of funds.

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

         Our liquidity and capital resources are monitored on a periodic basis
by management and State and Federal regulatory authorities. We monitor our
liquidity requirements under two categories, operational needs and emergency
needs. The operational needs category establishes the cash requirements to
sufficiently fund our deposit reserve requirements and pay operating expenses.
The emergency needs category establishes sufficient cash requirements to fund
the volatility of deposits. As determined under these categories, our liquidity
was considered satisfactory.

                                     - 10 -

<PAGE>

         At December 31, 2003, our capital ratios were considered adequate based
on regulatory minimum capital requirements. Our stockholders' equity increased
by $1,887,000 due to net income in 2003 of $1,975,000 and to a decrease in other
comprehensive income related to our securities of $103,000. 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 us 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. Currently, the Bank could pay us a $1,012,000 dividend without
regulatory approval.

         The minimum capital requirements to be considered well capitalized
under prompt corrective action provisions and the actual capital ratios for the
holding company and the Bank as of December 31, 2003 are as follows:

<TABLE>
<CAPTION>
                                                                            ACTUAL
                                                             ------------------------------------
                                                                                      REGULATORY
                                                             CONSOLIDATED    BANK    REQUIREMENTS
                                                             ------------   ------   ------------
<S>                                                          <C>            <C>      <C>
Leverage capital ratio...............................                9.40%    9.16%          5.00%
Risk-based capital ratios:
   Core capital......................................               10.09%    9.83%          6.00%
   Total capital.....................................               11.32%   11.06%         10.00%
</TABLE>

         At December 31, 2003, we had no material commitments for capital
expenditures.

         These ratios may decline as asset growth continues, but are expected to
exceed regulatory minimum requirements. Anticipated future earnings and
additional proceeds received from our stock offering will assist in keeping
these ratios at satisfactory levels.

         We believe that our liquidity and capital resources, inclusive of the
results of our current stock offering, will be 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 that, if they were implemented, would have such an effect.

         Off-Balance Sheet Arrangements.

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

         Our exposure to credit loss in the event of nonperformance by the other
party to the financial instrument for commitments to extend credit and standby
letters of credit is represented by the contractual amount of those instruments.
We use the same credit policies in making commitments and conditional
obligations as we do for on-balance sheet instruments. A summary of our
commitments is as follows:

                                     - 11 -

<PAGE>

<TABLE>
<CAPTION>
                                                                                         DECEMBER 31,
                                                                            -------------------------------------
                                                                                2003                     2002
                                                                            ------------             ------------
<S>                                                                         <C>                      <C>
Letters of credit.................................................          $  7,920,996             $  3,732,872
Commitments to extend credit......................................            81,459,639               66,067,474
                                                                            ------------             ------------
Total deposits....................................................          $ 89,380,635             $ 69,800,346
                                                                            ============             ============
</TABLE>

         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 funds and purchase Federal funds from other
financial institutions. Standby letters of credit are conditional commitments
that we issue to guarantee the performance of a customer to a third party. Those
letters of credit are primarily issued to support public and private borrowing
arrangements. The credit risk involved in issuing letters of credit is
essentially the same as that involved in extending loans to customers.
Collateral is required in instances which we deem necessary. At December 31,
2003, we had arrangements with four commercial banks for additional short-term
advances of $18,200,000.

         Effects of Inflation

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

         We do not engage in any transactions or have relationships or other
arrangements with an unconsolidated entity. These include special purpose and
similar entities or other off-balance sheet arrangements. We also do not trade
in energy, weather or other commodity based contracts.

         Related Party Transactions

         We lease our main office banking facilities under a noncancelable
operating lease agreement from GBC Properties, LLC, a limited liability company
formed by our organizers. The lease term is for 15 years with the monthly rental
payment adjusting every fifth year for changes in the Consumer Price Index. The
lease agreement requires us to pay normal operating and occupancy expenses of
the facilities.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

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

<TABLE>
<CAPTION>
                                                                                         DECEMBER 31,
                                                                            -------------------------------------
                                                                                2003                     2002
                                                                            ------------             ------------
                                                                                    (DOLLARS IN THOUSANDS)
<S>                                                                         <C>                      <C>
Interest income...................................................          $     13,042             $     11,430
Interest expense..................................................                 4,830                    5,009
                                                                            ------------             ------------
Net interest income...............................................                 8,212                    6,421
Provision for loan losses.........................................                 1,033                      644
Other income......................................................                 1,466                      678
Other expenses....................................................                 5,675                    5,044
                                                                            ------------             ------------
Pretax income.....................................................                 2,970                    1,411
                                                                            ------------             ------------
Income taxes......................................................                   995                      456
                                                                            ------------             ------------
Net income........................................................          $      1,975             $        955
                                                                            ============             ============
</TABLE>

                                     - 12 -

<PAGE>

         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 3.85% in 2003 as
compared to 3.90% in 2002. Average loans increased by $45 million that accounted
for the most significant change in the $49 million increase in total average
interest-earning assets. Average interest-bearing liabilities increased by $40
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 decreased to 6.11% in 2003 from 6.94% in 2002. The rate paid on average
interest-bearing liabilities decreased to 2.72% in 2003 from 3.65% in 2002. The
decrease in net yield was due primarily to the falling rate environment
experienced during 2003. As our interest-bearing liabilities mature and are
repriced, we expect to see our net yield increase.

         Provision for Loan Losses

         The provision for loan losses was $1,033,000 in 2003 as compared to
$644,000 in 2002. The amounts provided were due primarily to the growth of the
loan portfolio and to inherent risk in the loan portfolio. We had $178,000 in
net charge-offs in 2003 as compared to $1,800 in net charge offs in 2002. As of
December 31, 2003, we had $1,449,000 of nonperforming loans or assets as
compared to $446,000 at December 31, 2002. Through our 6th full year of
operations, we have incurred no significant loan losses. Based upon our
evaluation of the loan portfolio, we believe the allowance for loan losses to be
adequate to absorb losses on existing loans that may become uncollectible. Our
evaluation considers significant factors relative to the credit risk and loss
exposure in the loan portfolio, including past due and classified loans, past
experience, underlying collateral values, and current economic conditions that
may affect the borrower's ability to repay. The allowance for loan losses is
evaluated by segmenting the loan portfolio into unclassified and classified
loans. The unclassified loans are further segmented by loan type with an
allowance percentage applied to each type in order to establish a general
allowance for loan losses. The allowance percentage determined is based upon our
experience specifically and the historical experience of the banking industry
generally. The classified loans, including impaired loans, are analyzed
individually in order to establish a specific allowance for losses. The
allowance for loan losses as a percentage of total loans at December 31, 2003
was 1.41% as compared to 1.36% at December 31, 2002. The increase in this
percentage is primarily the result of having more of our own historical
experience on which to base our evaluation of the adequacy of the allowance for
loan losses.

         Other Income

         Other income consists of service charges on deposit accounts, mortgage
loan origination fees, gain on sale of SBA loans and other miscellaneous revenue
and fees. Other income of $1,466,000 increased by $788,000 in 2003 from $678,000
in 2002. This increase is due to an increase in service charges on deposit
accounts of $52,000, an increase in mortgage loan origination fees of $25,000,
an increase in gains on sale of SBA of $606,000 and an increase in income
recognized on life insurance policies of $18,000.

         Other Expenses

         Other expenses were $5,675,000 in 2003 as compared to $5,044,000 in
2002, an increase of $631,000. Salaries and employee benefits increased by
$391,000 due to an increase in the number of full time employees to 42 from 36
and to the annual salary increase to all employees. Equipment and occupancy
expenses increased by $21,000 due primarily to increased property taxes of
$20,000. Other operating expenses increased by $219,000 due primarily to a
$24,000 increase in data processing costs, $80,000 increase in broker fees,
$72,000 increase in dues and subscriptions, $24,000 increase in contributions,
$22,000 increase in insurance and a $47,000 increase in other operating costs.
The overall increase in other expenses is primarily attributable to the growth
of the Bank.

                                     - 13 -

<PAGE>

         Income Tax

         We have reported income tax expense for 2003 of $995,000 as compared to
$456,000 in 2002. Our effective income tax rate was 33% in 2003 as compared to
32% for 2002.

         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. Specific
officers are charged with the responsibility for monitoring policies and
procedures that are designed to ensure acceptable composition of the
asset/liability mix. Our 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
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), which 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, 2003, our cumulative one year interest rate-sensitivity
gap ratio was 1.25%. Our targeted ratio is 80% to 120% in this time horizon.
This indicates that our interest-earning assets will reprice during this period
at a rate faster than our interest-bearing liabilities.

         The following table sets forth the distribution of the repricing of our
interest-earning assets and interest-bearing liabilities as of December 31,
2003, 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

                                     - 14 -

<PAGE>

subject to competitive pressures and the needs of our customers. In addition,
various assets and liabilities indicated as repricing within the same period may
in fact, reprice at different times within such period and at different rates.

<TABLE>
<CAPTION>
                                                      AFTER THREE    AFTER ONE
                                           WITHIN     MONTHS BUT     YEAR BUT
                                           THREE      WITHIN ONE    WITHIN FIVE   AFTER FIVE
                                           MONTHS        YEAR          YEARS         YEARS       TOTAL
                                         ----------   -----------   -----------   ----------   ---------
                                                              (DOLLARS IN THOUSANDS)
<S>                                      <C>          <C>           <C>           <C>          <C>
Interest-earning assets:
   Federal funds sold.................   $    1,536   $         0   $         0   $        0   $   1,536
   Securities.........................            0             0         4,999       17,502      22,501
   Loans..............................      168,434        21,256        22,298        3,149     215,137
                                         ----------   -----------   -----------   ----------   ---------
                                            169,970        21,256        27,297       20,651     239,174
                                         ----------   -----------   -----------   ----------   ---------
Interest-bearing liabilities:
   Interest-bearing demand deposits...       32,843             0             0            0      32,843
   Savings............................       10,084             0             0            0      10,084
   Certificates, less than $100,000...        7,652        54,070        19,076            0      80,798
   Certificates, $100,000 and over....        8,694        39,803        23,511            0      72,008
   Repurchase agreements..............          353             0             0            0         353
                                         ----------   -----------   -----------   ----------   ---------
                                             59,626        93,873        42,587            0     196,086
                                         ----------   -----------   -----------   ----------   ---------
   Interest rate sensitivity gap......   $  110,344   $   (72,617)  $   (15,290)  $   20,651   $  43,088
                                         ==========   ===========   ===========   ==========   =========
   Cumulative interest rate
      sensitivity gap.................   $  110,344   $    37,727   $    22,437   $   43,088
                                         ==========   ===========   ===========   ==========
   Interest rate sensitivity gap
      ratio...........................         2.85           .23           .64           .0
                                         ==========   ===========   ===========   ==========
   Cumulative interest rate
      sensitivity gap ratio...........         2.85          1.25          1.11         1.22
                                         ==========   ===========   ===========   ==========
</TABLE>

               SELECTED FINANCIAL INFORMATION AND STATISTICAL DATA

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

                                     - 15 -

<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>
                                                                                        DECEMBER 31,
                                                                            ------------------------------------
                                                                               2003                     2002
                                                                            -----------              -----------
                                                                                   (DOLLARS IN THOUSANDS)
<S>                                                                         <C>                      <C>
Cash and due from banks...........................................          $     3,211              $     2,994
Securities........................................................               19,254                   12,670
Securities valuation account......................................                  118                       81
Federal funds sold................................................                8,528                   11,436
Loans (2).........................................................              185,261                  140,512
Allowance for loan losses.........................................               (2,581)                  (1,847)
Other assets......................................................                7,430                    5,520
                                                                            -----------              -----------
                                                                            $   221,221              $   171,366
                                                                            ===========              ===========
Total interest-earning assets.....................................          $   213,043              $   164,618
                                                                            ===========              ===========
   LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:
   Noninterest-bearing demand.....................................          $    19,274              $    13,294
   Interest-bearing demand........................................               27,272                   23,912
   Savings........................................................                9,562                    9,952
   Time...........................................................              140,247                  102,801
                                                                            -----------              -----------
          Total deposits..........................................              196,355                  149,959

   Repurchase agreements..........................................                  598                      583
   Other liabilities                                                              1,894                    1,112
                                                                            -----------              -----------
          Total liabilities.......................................              198,847                  151,654
   Stockholders' equity...........................................               22,374                   19,712
                                                                            -----------              -----------
                                                                            $   221,221              $   171,366
                                                                            ===========              ===========

   Total interest-bearing liabilities.............................          $   177,679              $   137,248
                                                                            ===========              ===========
</TABLE>

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

(2)      The average balance of nonaccrual loans included in average loans for
         2003 and 2002 was $149,000 and $126,000, respectively.

                                     - 16 -

<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,
                                                           2003                       2002
                                                 INTEREST    AVERAGE RATE    INTEREST    AVERAGE RATE
                                                ----------   ------------   ----------   ------------
                                                                    (DOLLARS IN THOUSANDS)
<S>                                             <C>          <C>            <C>          <C>
INTEREST INCOME:
   Interest and fees on loans (1).........      $   12,224           6.60%  $   10,606           7.55%
   Interest on securities.................             732           3.80          641           5.06
   Interest on federal funds sold.........              86           1.01          183           1.60
                                                ----------                  ----------
Total interest income.....................          13,042           6.12       11,430           6.94
                                                ----------                  ----------
INTEREST EXPENSE:
Interest on interest-bearing demand
   deposits ..............................             371           1.36          546           2.28
   Interest on savings deposits...........             144           1.51          261           2.62
   Interest on time deposits..............           4,304           3.07        4,189           4.07
   Interest on repurchase agreements......              11           1.84           13           2.23
                                                ----------                  ----------
   Total interest expense.................           4,830           2.71        5,009           3.65
                                                ----------                  ----------
NET INTEREST INCOME                             $    8,212                  $    6,421
                                                ==========                  ==========
   Net interest spread....................                           3.41%                       3.29%
                                                                     ====                        ====
   Net yield on average interest-earning
      assets..............................                           3.85%                       3.90%
                                                                     ====                        ====
</TABLE>

(1)      Interest and fees on loans includes $2,107,000 and $1,705,000 of loan
         fee income for the years ended December 31, 2003 and 2002,
         respectively. There was no interest income recognized on nonaccrual
         loans during 2003 or 2002.

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:

         -        change in volume (change in volume multiplied by old rate);

         -        change in rate (change in rate multiplied by old volume); and

         -        a combination of change in rate and change in volume.

                                     - 17 -

<PAGE>

         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>
                                                                      YEARS ENDED DECEMBER, 31,
                                                                           2003 VS. 2002
                                                                           CHANGES DUE TO:
                                                            -------------------------------------------
                                                               RATE            VALUE          TOTAL
                                                            -----------     -----------     -----------
                                                                       (DOLLARS IN THOUSANDS)
<S>                                                         <C>             <C>             <C>
Increase (decrease) in:
   Income from interest-earning assets:
   Interest and fees on loans........................       $    (1,455)    $     3,073     $     1,618
   Interest on securities............................              (126)            217              91
   Interest on federal funds sold....................               (57)            (40)            (97)
                                                            -----------     -----------     -----------
       Total interest income.........................            (1,638)          3,250           1,612
                                                            -----------     -----------     -----------

   Expense from interest-bearing liabilities:
   Interest on interest-bearing demand deposits......              (244)             69            (175)
   Interest on savings deposits......................              (107)            (10)           (117)
   Interest on time deposits.........................            (1,186)          1,301             115
   Interest on repurchase agreements.................                (2)              -              (2)
                                                            -----------     -----------     -----------
       Total interest expense........................            (1,539)          1,360            (179)
                                                            -----------     -----------     -----------

       Net interest income...........................       $       (99)    $     1,890     $     1,791
                                                            ===========     ===========     ===========
</TABLE>

                                     - 18 -

<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,
                                                                            ------------------------------------
                                                                               2003                     2002
                                                                            -----------              -----------
                                                                                   (DOLLARS IN THOUSANDS)
<S>                                                                         <C>                      <C>
Mortgage-backed securities........................................          $     4,446              $    11,563
U.S. Government agencies..........................................               12,430                    6,076
State, County, & Municipals.......................................                5,625                    2,643
                                                                            -----------              -----------
                                                                            $    22,501              $    20,282
                                                                            ===========              ===========
</TABLE>

MATURITIES

         The amounts of securities, including the weighted average yield in each
category as of December 31, 2003, are shown in the following table according to
contractual maturity classifications one year or less, after one through five
years, after five through ten years and after ten years.

<TABLE>
<CAPTION>
                                        AFTER ONE THROUGH FIVE    AFTER FIVE THROUGH TEN
                                                YEARS                     YEARS
                                        AMOUNT        YIELD(1)    AMOUNT        YIELD(1)
                                        ------        --------    ------        --------
                                                     (DOLLARS IN THOUSANDS)
<S>                                     <C>           <C>         <C>           <C>
Mortgage-backed securities.......       $  220            4.46%   $1,734            4.37%
U.S. Government agencies.........        4,780            3.65%    7,650            4.49%
                                        ------        --------    ------        --------
                                        $5,000            3.69%   $9,384            4.47%
                                        ======        ========    ======        ========
</TABLE>

<TABLE>
<CAPTION>
                                           AFTER TEN YEARS               TOTAL
                                        AMOUNT        YIELD(1)    AMOUNT        YIELD(1)
                                        ------        --------    -------       --------
                                                     (DOLLARS IN THOUSANDS)
<S>                                     <C>           <C>         <C>           <C>
Mortgage-backed securities.......       $2,492            4.88%   $ 4,446           4.66%
U.S. Government agencies.........            0               0%    12,430           4.17%
                                        ------        --------    -------       --------
                                        $2,492           4.88.%   $16,876           4.30%
                                        ======        ========    =======       ========
</TABLE>

(1)      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. The weighted average yield for each
         maturity range was computed using the carrying value of each security
         in that range.

                                     - 19 -

<PAGE>

                                 LOAN PORTFOLIO

TYPES OF LOANS

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

<TABLE>
<CAPTION>
                                                                                        DECEMBER 31,
                                                                            ------------------------------------
                                                                               2003                     2002
                                                                            -----------              -----------
                                                                                   (DOLLARS IN THOUSANDS)
<S>                                                                         <C>                      <C>
Commercial........................................................          $    49,921              $    31,946
Construction loans secured by real estate.........................              111,931                   84,547
Commercial loans secured by real estate...........................               47,510                   37,983
Consumer installment loans and other..............................                5,775                    5,690
                                                                            -----------              -----------
                                                                                215,137                  160,166
Less allowance for loan losses....................................               (3,029)                  (2,174)
                                                                            -----------              -----------
       Net loans..................................................          $   212,108              $   157,992
                                                                            ===========              ===========
</TABLE>

MATURITIES AND SENSITIVITIES OF LOANS TO CHANGES IN INTEREST RATES

Total loans as of December 31, 2003 are shown in the following table according
to contractual maturity classifications one year or less, after one year through
five years, and after five years.

<TABLE>
<CAPTION>
                                                                                           (DOLLARS IN THOUSANDS)
<S>                                                                                        <C>
Commercial
   One year or less.....................................................................         $    49,668
   After one through five years.........................................................              38,787
   After five years.....................................................................               8,976
                                                                                                 -----------
                                                                                                      97,431
                                                                                                 -----------

Construction
   One year or less.....................................................................             108,626
   After one through five years.........................................................               3,306
   After five years.....................................................................                   0
                                                                                                 -----------
                                                                                                     111,932
                                                                                                 -----------

Other
   One year or less.....................................................................                   0
   After one through five years.........................................................                   0
   After five years.....................................................................                   0
                                                                                                 -----------

                                                                                                 $   209,363
                                                                                                 ===========
</TABLE>

         The following table summarizes loans at December 31, 2003 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............................................................         $    21,734
Floating or adjustable interest rates...................................................              29,335
                                                                                                 -----------
                                                                                                 $    51,069
                                                                                                 ===========
</TABLE>

RISK ELEMENTS

         Information with respect to nonaccrual, past due, and restructured
loans at December 31, 2003 and 2002 is as follows:

<TABLE>
<CAPTION>
                                                                                        DECEMBER 31,
                                                                            ------------------------------------
                                                                               2003                     2002
                                                                            -----------              -----------
                                                                                   (DOLLARS IN THOUSANDS)
<S>                                                                         <C>                      <C>
Nonaccrual loans..................................................          $     1,449              $       446
Loans contractually past due ninety days or more as to interest or
   principal payments and still accruing..........................                    0                        0
Restructured loans................................................                    0                        0
Potential problem loans...........................................                    0                        0
Interest income that would have been recorded on nonaccrual and
   restructured loans under original terms........................                   17                        8
Interest income that was recorded on nonaccrual and restructured
   loans..........................................................                    0                        0
</TABLE>

                                     - 20 -

<PAGE>

         Potential problem loans are defined as loans about which we have
serious doubts as to the ability of the borrower to comply with the present loan
repayment terms and which may cause the loan to be placed on nonaccrual status,
to become past due more than ninety days, or to be restructured.

         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.

                         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 and 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>
                                                                                        DECEMBER 31,
                                                                            ------------------------------------
                                                                               2003                     2002
                                                                            -----------              -----------
                                                                                   (DOLLARS IN THOUSANDS)
<S>                                                                         <C>                      <C>
Average amount of loans outstanding...............................          $   185,261              $   140,512
                                                                            ===========              ===========
Balance of allowance for loan losses at beginning of year.........                2,174                    1,532
                                                                            -----------              -----------
Loans charged off
   Commercial and financial.......................................                  178                        7
   Real estate mortgage...........................................                                            --
   Installment....................................................                                            --
                                                                            -----------              -----------
                                                                                    178                        7
                                                                            -----------              -----------
Loans recovered
   Commercial and financial.......................................                                             5
   Real estate mortgage...........................................                                            --
   Installment....................................................                    0                       --
                                                                            -----------              -----------
                                                                                    178                        5
                                                                            -----------              -----------
Additions to allowance charged to operating expense during year...                1,033                      644
                                                                            -----------              -----------
</TABLE>

<TABLE>
<CAPTION>
                                                                                        DECEMBER 31,
                                                                            ------------------------------------
                                                                               2003                     2002
                                                                            -----------              -----------
                                                                                   (DOLLARS IN THOUSANDS)
<S>                                                                         <C>                      <C>
Balance of allowance for loan losses at end of year...............          $     3,029              $     2,174
                                                                            ===========              ===========
Ratio of net loans charged off during the year to average loans
   outstanding....................................................                  .10%                     .01%
                                                                            ===========              ===========
</TABLE>

                                     - 21 -

<PAGE>

ALLOWANCE FOR LOAN LOSSES

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

         As of December 31, 2003 and 2002, the allocation of our allowance for
loan losses does not specifically correspond to the categories of loans listed
below. 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 2003                   DECEMBER 31, 2002
                                              -------------------------------     -------------------------------
                                                             PERCENT OF LOANS                    PERCENT OF LOANS
                                                             IN EACH CATEGORY                    IN EACH CATEGORY
                                              AMOUNT          TO TOTAL LOANS      AMOUNT          TO TOTAL LOANS
                                              ------         ----------------     ------         ----------------
                                                                     (DOLLARS IN THOUSANDS)
<S>                                           <C>            <C>                  <C>            <C>
Commercial..........................          $  325                       23     $  296                       20%
Construction loans secured by real
   estate...........................           1,679                       52      1,268                       53
Commercial loans secured by real
   estate ..........................             967                       22        554                       24
Consumer installment loans and other              58                        3         57                        3
                                              ------         ----------------     ------         ----------------
                                              $3,029                      100%    $2,175                      100%
                                              ======         ================     ======         ================
</TABLE>

                                    DEPOSITS

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

<TABLE>
<CAPTION>
                                                             YEARS ENDED DECEMBER, 31,
                                                         2003                         2002
                                                 AMOUNT       PERCENTAGE       AMOUNT       PERCENTAGE
                                               ----------     ----------     ----------     ----------
                                                              (DOLLARS IN THOUSANDS)
<S>                                            <C>            <C>            <C>            <C>
Noninterest-bearing demand deposits.......     $   19,274            .00%        13,294            .00%
Interest-bearing demand deposits..........         27,272           1.36         23,912           2.28
Savings deposits..........................          9,562           1.51          9,952           2.62
Time deposits.............................        140,247           3.07        102,801           4.07
                                               ----------                    ----------
                                               $  196,355                    $  149,959
                                               ==========                    ==========
</TABLE>

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

                                      -22-
<PAGE>

         The amounts of time certificates of deposit issued in amounts of
$100,000 or more as of December 31, 2003 are shown below by category, which is
based on time remaining until maturity of three months or less, over three
through six months, over six through twelve months, and over twelve months.

<TABLE>
<CAPTION>
                                                                                          (DOLLARS IN THOUSANDS)
                                                                                          ----------------------
<S>                                                                                       <C>
Three months or less....................................................................         $  8,920
Over three through six months...........................................................           13,423
Over six through twelve months..........................................................           27,701
Over twelve months......................................................................           23,759
                                                                                                 --------
       Total............................................................................         $ 73,803
                                                                                                 ========
</TABLE>

                    RETURN ON ASSETS AND STOCKHOLDERS' EQUITY

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

<TABLE>
<CAPTION>
                                                                                  YEARS ENDED DECEMBER 31,
                                                                                  -------------------------
                                                                                 2003                     2002
                                                                                ------                   ------
<S>                                                                             <C>                      <C>
Return on assets (1)..............................................                .89%                     .56%
Return on equity (2)..............................................               8.83                     4.84
Dividend payout ratio (3).........................................                 --                       --
Equity to assets ratio (4)........................................              10.11                    11.50
</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 common equity divided by average total assets.

ITEM 7. FINANCIAL STATEMENTS

         The financial statements of GBC Bancorp, Inc., the Notes to financial
statements and the Independent Auditors' Report of Mauldin & Jenkins, LLC,
independent certified public accountants, required by this Item 7 commence on
page F-1 and are incorporated herein by this reference. The Financial Statements
filed as part of this Annual Report on Form 10-KSB are listed in the Index to
Financial Statements below:

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S>                                                                                                            <C>
Independent Auditor's Report...............................................................................    F-1

Consolidated Balance Sheets as of December 31, 2003 and December 31, 2002..................................    F-2

Consolidated Statements of Income for the Years Ended December 31, 2003 and December 31, 2002..............    F-3

Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2003
       and December 31, 2002...............................................................................    F-4

Consolidated Statements of Shareholders' Equity for the Years Ended December 31, 2003
       and December 31, 2002...............................................................................    F-5

Consolidated Statements of Cash Flows for the Years Ended December 31, 2003 and December 31, 2002..........    F-6

Notes to Consolidated Financial Statements.................................................................    F-7
</TABLE>

                                     - 23 -
<PAGE>

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

         None.

ITEM 8A. CONTROLS AND PROCEDURES

         As of the end of the period covered by this annual report on Form
10-KSB, we carried out an evaluation, under the supervision and with the
participation of our Chief Executive Officer and the Chief Financial Officer, of
the design and operation of our disclosure controls and procedures. Based on
this evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures are effective for
gathering, analyzing and disclosing the information that we are required to
disclose in the reports we file under the Securities Exchange Act of 1934,
within the time periods specified in the SEC's rules and forms. Our Chief
Executive Officer and Chief Financial Officer also concluded that our disclosure
controls and procedures are effective in timely alerting them to material
information relating to our company required to be included in our periodic SEC
filings. In connection with the new rules, we are in the process of further
reviewing and documenting our disclosure controls and procedures, including our
internal controls and procedures for financial reporting, and may from time to
time make changes designed to enhance their effectiveness and to ensure that our
systems evolve with our business.

There have been no significant changes in our internal controls or in other
factors that could significantly affect our internal controls subsequent to the
date of this evaluation.

                                    PART III

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

         The information set forth under the captions "Election of Directors,"
"Executive Officers" and "Section 16(a) Beneficial Ownership Reporting
Compliance" in the Proxy Statement used in connection with the Company's 2004
Annual Shareholders' meeting is incorporated herein by reference.

ITEM 10. EXECUTIVE COMPENSATION

         The information set forth under the caption "Executive Compensation" in
the Proxy Statement used in connection with the Company's 2004 Annual
Shareholders' meeting is incorporated herein by reference.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

         The information set forth under the captions "Security Ownership of
Principal Shareholders and Management" and "Equity Compensation Plan
Information" in the Proxy Statement used in connection with the Company's 2004
Annual Shareholders' meeting is incorporated herein by reference.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information set forth under the caption "Certain Relationships and
Related Transactions" in the Proxy Statement used in connection with the
Company's 2004 Annual Shareholders' meeting is incorporated herein by reference.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits required by Item 601 of Regulation S-B.

                                     - 24 -
<PAGE>

EXHIBIT
 NUMBER                             DESCRIPTION

  3.1    Articles of Incorporation of the Company, as amended (filed as Exhibit
         3.1 to the Registration Statement on Form SB-2, as amended
         (Registration No. 333-19081)).

  3.2    Amended and Restated Bylaws (filed as Exhibit 3.2 to the Registration
         Statement on Form SB-2, as amended, Registration No. 333-52494).

  4.1    Specimen Common Stock Certificate (filed as Exhibit 4.2 to the
         Registration Statement on Form SB-2, as amended (Registration No.
         333-19081)).

  10.1   1998 Stock Option Plan (filed as Exhibit 99 to the Registration
         Statement on Form S-8 Registration Statement filed in July 25, 2002.)

  10.2   Director Deferred Stock Unit Plan (filed as Exhibit 10.2 to Annual
         Report on Form 10-KSB for the year ended December 2002)

  10.3   Real Estate Commercial Lease Contract dated as of January 1, 2000, by
         and between GBC Properties, LLC and Gwinnett Banking Company (filed as
         Exhibit 10.4 to the Annual Report on Form 10-KSB for the year ended
         December 31, 1999).

  10.4   Real Estate Commercial Lease Contract dated as of July 26, 2000, by and
         between Northwinds Center, L.P. and Gwinnett Banking Company (filed as
         Exhibit 10.4 to the Annual Report on Form 10-KSB for the year ended
         December 31, 2000).

  11.1   Statement Re: Computation of Per Share Earnings (included in Note 11 to
         the financial statement filed herewith)

  14.1   Code of Ethics

  21.1   Subsidiaries of the Company (filed as Exhibit 21.1 to the Registration
         Statement on Form SB-2, as amended (Registration No. 333-19081)).

  31.1   Certification of Chief Executive Officer Pursuant to Section 307 of the
         Sarbanes-Oxley Act of 2002.

  31.2   Certification Chief Financial Officer Pursuant to Section 307 of the
         Sarbanes-Oxley Act of 2002.

  32.1   Certification of Chief Executive Officer and Chief Financial Officer
         Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

  99.1   Proxy Materials and Proxy for 2003 Annual Shareholders' Meeting.

(b)  Reports on Form 8-K filed in the fourth quarter of 2003:  None.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

         The information set forth under the caption "Independent Auditors" in
the Proxy Statement used in connection with the Company's 2004 Annual
Shareholders' meeting is incorporated herein by reference.

                                   SIGNATURES

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

                                     - 25 -
<PAGE>

                                    GBC BANCORP, INC.

                                    By:   /s/ Larry D. Key
                                          --------------------------------------
                                          Larry D. Key, President and Chief
                                          Executive Officer

                                    Date:  March 29, 2004

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the Registrant in the capacities and on
the date indicated.

<TABLE>
<CAPTION>
                    SIGNATURE                                         TITLE                                 DATE
<S>                                                  <C>                                               <C>
/s/ Larry D. Key                                     President, Chief Executive Officer and            March 29, 2004
-------------------------------------------------    Chairman of the Company and the Bank
Larry D. Key

/s/ John T. Hopkins III                              Executive Vice President, Chief Financial         March 29, 2004
-------------------------------------------------    Officer, Secretary and Treasurer of the
John T. Hopkins III                                  Company and the Bank

/s/ James B. Ballard                                 Director of the Company and the Bank              March 29, 2004
-------------------------------------------------
James B. Ballard

/s/ Jerry M. Boles                                   Director of the Company and the Bank              March 29, 2004
-------------------------------------------------
Jerry M. Boles

/s/ W. H. Britt                                      Director of the Company and the Bank              March 29, 2004
-------------------------------------------------
W. H. Britt

/s/ Richard F. Combs                                 Director of the Company and the Bank              March 29, 2004
-------------------------------------------------
Richard F. Combs

/s/ William G. Hayes                                 Director of the Company and the Bank              March 29, 2004
-------------------------------------------------
William G. Hayes

/s/ Douglas A. Langley                               Director of the Company and the Bank              March 29, 2004
-------------------------------------------------
Douglas A. Langley

/s/ Norris J. Nash                                   Director of the Company and the Bank              March 29, 2004
-------------------------------------------------
Norris J. Nash

/s/ J. Joseph Powell                                 Director of the Company and the Bank              March 29, 2004
-------------------------------------------------
J. Joseph Powell

/s/ William S. Stanton, Jr.                          Director of the Company and the Bank              March 29, 2004
-------------------------------------------------
William S. Stanton, Jr.
</TABLE>

                                     - 26 -
<PAGE>

                                GBC BANCORP, INC.
                                 AND SUBSIDIARY

                          CONSOLIDATED FINANCIAL REPORT

                                DECEMBER 31, 2003

<PAGE>

                                GBC BANCORP, INC.
                                 AND SUBSIDIARY

                          CONSOLIDATED FINANCIAL REPORT
                                DECEMBER 31, 2003

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                           PAGE
                                                                                                                           ----
<S>                                                                                                                        <C>
INDEPENDENT AUDITOR'S REPORT............................................................................................      1

FINANCIAL STATEMENTS

     CONSOLIDATED BALANCE SHEETS........................................................................................      2
     CONSOLIDATED STATEMENTS OF INCOME..................................................................................      3
     CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ...................................................................      4
     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY ...................................................................      5
     CONSOLIDATED STATEMENTS OF CASH FLOWS..............................................................................      6
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.........................................................................   6-21
</TABLE>

<PAGE>

                          INDEPENDENT AUDITOR'S REPORT

TO THE BOARD OF DIRECTORS
GBC BANCORP, INC.
LAWRENCEVILLE, GEORGIA

                  We have audited the accompanying consolidated balance sheets
of GBC BANCORP, INC. AND SUBSIDIARY as of December 31, 2003 and 2002, and the
related consolidated statements of income, comprehensive income, stockholders'
equity, and cash flows for the years then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

                  In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position of GBC
Bancorp, Inc. and subsidiary as of December 31, 2003 and 2002, and the results
of their operations and their cash flows for the years then ended, in conformity
with accounting principles generally accepted in the United States of America.

Atlanta, Georgia
January 30, 2004

<PAGE>

                                GBC BANCORP, INC.
                                 AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                          2003           2002
                                                                      ------------   ------------
<S>                                                                   <C>            <C>
                               ASSETS

Cash and due from banks                                               $  3,373,507   $  3,360,345
Federal funds sold                                                       1,536,000     10,827,000
Securities available-for-sale                                           22,501,224     20,282,371

Loans, net of unearned income                                          215,137,455    160,166,104
Less allowance for loan losses                                           3,029,508      2,174,339
                                                                      ------------   ------------
          Loans, net                                                   212,107,947    157,991,765

Premises and equipment, net                                                495,617        625,548
Other assets                                                             7,441,981      5,118,949
                                                                      ------------   ------------
          TOTAL ASSETS                                                $247,456,276   $198,205,978
                                                                      ============   ============

              LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits
    Noninterest-bearing                                               $ 24,241,631   $ 13,390,690
    Interest-bearing                                                   197,809,410    161,392,763
                                                                      ------------   ------------
          Total deposits                                               222,051,041    174,783,453
    Securities sold under repurchase agreements                            352,799        541,214
    Other liabilities                                                    1,735,358      1,451,388
                                                                      ------------   ------------
          TOTAL LIABILITIES                                            224,139,198    176,776,055
                                                                      ------------   ------------

Commitments and contingencies

Stockholders' equity
    Common stock, par value $1; 3,000,000 shares authorized;
       1,712,408 and 1,711,083 issued and outstanding, respectively      1,712,408      1,711,083
    Capital surplus                                                     18,083,004     18,068,979
    Retained earnings                                                    3,424,631      1,449,690
    Accumulated other comprehensive income                                  97,035        200,171
                                                                      ------------   ------------

          TOTAL STOCKHOLDERS' EQUITY                                    23,317,078     21,429,923
                                                                      ------------   ------------

          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                  $247,456,276   $198,205,978
                                                                      ============   ============
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       2
<PAGE>

                                GBC BANCORP, INC.
                                 AND SUBSIDIARY

                        CONSOLIDATED STATEMENTS OF INCOME
                     YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                     2003           2002
                                                                ------------    ------------
<S>                                                             <C>             <C>
INTEREST INCOME
    Loans, including fees                                       $ 12,223,593    $ 10,605,682
    Securities:
      Taxable                                                        595,016         636,047
      Nontaxable                                                     136,876           5,093
    Federal funds sold                                                86,534         182,760
                                                                ------------    ------------
          TOTAL INTEREST INCOME                                   13,042,019      11,429,582
                                                                ------------    ------------

INTEREST EXPENSE
      Deposits                                                     4,819,010       4,996,652
      Securities sold under repurchase agreements                     11,391          12,656
                                                                ------------    ------------
          TOTAL INTEREST EXPENSE                                   4,830,401       5,009,308
                                                                ------------    ------------

          NET INTEREST INCOME                                      8,211,618       6,420,274
PROVISION FOR LOAN LOSSES                                          1,033,118         643,850
                                                                ------------    ------------
          NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES      7,178,500       5,776,424
                                                                ------------    ------------

OTHER INCOME
    Service charges on deposit accounts                              192,553         140,965
    Loss on sale of securities available-for-sale                     (2,098)              -
    Gain on sale of loans                                            758,178         152,277
    Other operating income                                           517,162         384,859
                                                                ------------    ------------
          TOTAL OTHER INCOME                                       1,465,795         678,101
                                                                ------------    ------------

OTHER EXPENSES
    Salaries and employee benefits                                 3,423,968       3,032,720
    Equipment and occupancy expenses                                 923,536         902,631
    Other operating expenses                                       1,327,007       1,108,336
                                                                ------------    ------------
          TOTAL OTHER EXPENSES                                     5,674,511       5,043,687
                                                                ------------    ------------

          INCOME BEFORE INCOME TAXES                               2,969,784       1,410,838

INCOME TAX EXPENSE                                                   994,843         456,072

                    NET INCOME                                  $  1,974,941    $    954,766
                                                                ============    ============

BASIC EARNINGS PER SHARE                                        $       1.15    $       0.57
                                                                ============    ============

DILUTED EARNINGS PER SHARE                                      $       1.11    $       0.55
                                                                ============    ============
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       3
<PAGE>

                                GBC BANCORP, INC.
                                 AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                     YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                        2003           2002
                                                                    -----------    -----------
<S>                                                                 <C>            <C>
NET INCOME                                                          $ 1,974,941    $   954,766

OTHER COMPREHENSIVE INCOME (LOSS):

        Unrealized holding gains (losses) on securities
            available-for-sale arising during period, net of
            tax (benefits) of $(49,109) and $72,973, respectively      (104,437)       143,375

        Reclassification adjustment for losses realized in net
            income, net of tax benefits of $797                           1,301              -
                                                                    -----------    -----------

    OTHER COMPREHENSIVE INCOME (LOSS)                                  (103,136)       143,375
                                                                    -----------    -----------

COMPREHENSIVE INCOME                                                $ 1,871,805    $ 1,098,141
                                                                    ===========    ===========
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       4
<PAGE>

                                GBC BANCORP, INC.
                                 AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                     YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                                               ACCUMULATED
                                         COMMON STOCK                                             OTHER           TOTAL
                                    ------------------------      CAPITAL        RETAINED     COMPREHENSIVE   STOCKHOLDERS'
                                     SHARES       PAR VALUE       SURPLUS        EARNINGS     INCOME (LOSS)      EQUITY
                                    ---------   ------------   ------------    ------------   ------------    ------------
<S>                                 <C>         <C>            <C>             <C>            <C>             <C>
BALANCE, DECEMBER 31, 2001          1,502,216   $  1,502,216   $ 15,364,153    $    494,924   $     56,796    $ 17,418,089
    Net income                              -              -              -         954,766              -         954,766
    Issuance of common stock          208,867        208,867      2,715,269               -              -       2,924,136
    Stock offering costs                    -              -        (10,443)              -              -         (10,443)
    Other comprehensive income              -              -              -               -        143,375         143,375
                                    ---------   ------------   ------------    ------------   ------------    ------------
BALANCE, DECEMBER 31, 2002          1,711,083      1,711,083     18,068,979       1,449,690        200,171      21,429,923
    Net income                              -              -              -       1,974,941              -       1,974,941
    Stock options exercised             1,325          1,325         14,025               -              -          15,350
    Other comprehensive loss                -              -              -               -       (103,136)       (103,136)
                                    ---------   ------------   ------------    ------------   ------------    ------------
BALANCE, DECEMBER 31, 2003          1,712,408   $  1,712,408   $ 18,083,004    $  3,424,631   $     97,035    $ 23,317,078
                                    =========   ============   ============    ============   ============    ============
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       5
<PAGE>

                                GBC BANCORP, INC.
                                 AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                              2003            2002
                                                                         ------------    ------------
<S>                                                                      <C>             <C>
OPERATING ACTIVITIES
    Net income                                                           $  1,974,941    $    954,766
    Adjustments to reconcile net income to net cash
        provided by operating activities:
        Depreciation                                                          255,950         273,588
        Deferred income taxes                                                (513,540)       (342,077)
        Gain on sale of other real estate                                      (2,458)              -
        Gain on sale of loans                                                (758,178)       (152,277)
        Loss on sale of securities available-for-sale                           2,098               -
        Provision for loan losses                                           1,033,118         643,850
        Increase  in interest receivable                                     (105,135)       (102,865)
        Decrease in interest payable                                          (76,684)        (73,692)
        Increase in income taxes payable                                       23,874          97,887
        Net other operating activities                                        248,817         197,574
                                                                         ------------    ------------
            Net cash provided by operating activities                       2,082,803       1,496,754
                                                                         ------------    ------------

INVESTING ACTIVITIES
    Purchases of securities available-for-sale                            (15,901,589)    (18,601,825)
    Proceeds from maturities of securities available-for-sale              12,425,679       7,863,178
    Proceeds from sale of  securities available-for-sale                    1,103,511               -
    Net (increase) decrease in federal funds sold                           9,291,000      (5,526,000)
    Net increase in loans                                                 (54,851,746)    (37,857,695)
    Purchase of premises and equipment                                       (126,019)        (89,601)
    Proceeds from sale of other realestate                                    353,000               -
    Purchase of life insurance policies                                    (1,458,000)              -
                                                                         ------------    ------------
            Net cash used in investing activities                         (49,164,164)    (54,211,943)
                                                                         ------------    ------------

FINANCING ACTIVITIES
    Net increase in deposits                                               47,267,588      48,859,144
    Net decrease in securities sold under repurchase agreements              (188,415)        (44,783)
    Proceeds from the sale of common stock                                          -       2,924,136
    Proceeds from the issuance of common stock                                 15,350               -
    Stock offering costs                                                            -         (10,443)
                                                                         ------------    ------------
            Net cash provided by financing activities                      47,094,523      51,728,054
                                                                         ------------    ------------

Net increase (decrease) in cash and due from banks                             13,162        (987,135)

Cash and due from banks at beginning of year                                3,360,345       4,347,480
                                                                         ------------    ------------

Cash and due from banks at end of year                                   $  3,373,507    $  3,360,345
                                                                         ============    ============

SUPPLEMENTAL DISCLOSURES
    Cash paid for:
            Interest                                                     $  4,907,085    $  5,083,000

            Income taxes                                                 $  1,484,475    $    700,262

NONCASH TRANSACTION
    Principal balances of loans transferred to other real estate owned   $    892,404    $          -
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       6
<PAGE>

                                GBC BANCORP, INC.
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        NATURE OF OPERATIONS

         GBC Bancorp, Inc. (the "Company") is a bank holding company whose
         principal activity is the ownership and management of its wholly-owned
         subsidiary, Gwinnett Banking Company (the "Bank"). The Bank is a
         commercial bank located in Lawrenceville, Gwinnett County, Georgia with
         a branch in Alpharetta, Fulton County, Georgia. The Bank provides a
         full range of banking services in its primary market area of Gwinnett
         County and surrounding counties.

        BASIS OF PRESENTATION AND ACCOUNTING ESTIMATES

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

         In preparing the consolidated financial statements in accordance with
         accounting principles generally accepted in the United States of
         America, management is required to make estimates and assumptions that
         affect the reported amounts of assets and liabilities and the
         disclosure of contingent assets and liabilities as of the balance sheet
         date and the reported amounts of revenues and expenses during the
         reporting period. Actual results could differ from those estimates.

         Material estimates that are particularly susceptible to significant
         change relate to the determination of the allowance for loan losses,
         the valuation of foreclosed real estate, and contingent assets and
         liabilities. The determination of the adequacy of the allowance for
         loan losses is based on estimates that are susceptible to significant
         changes in the economic environment and market conditions. In
         connection with the determination of the estimated losses on loans and
         the valuation of foreclosed real estate, management obtains independent
         appraisals for significant collateral.

        CASH, DUE FROM BANKS AND CASH FLOWS

         For purposes of reporting cash flows, cash and due from banks include
         cash on hand, cash items in process of collection and amounts due from
         banks. Cash flows from loans, federal funds sold, deposits, and
         securities sold under repurchase agreements are reported net.

         The Bank is required to maintain reserve balances in cash or on deposit
         with the Federal Reserve Bank, based on a percentage of deposits. The
         total of those reserve balances was approximately $224,000 and $299,000
         at December 31, 2003 and 2002.

        SECURITIES SOLD UNDER REPURCHASE AGREEMENTS

         Securities sold under repurchase agreements are generally accounted for
         as collateralized financing transactions. They are recorded at the
         amount the security was sold plus accrued interest. The Company
         monitors its exposure with respect to securities sold under repurchase
         agreements, and request for the return of excess securities held by the
         counterparty is made when deemed necessary.

                                     - 2 -
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

        SECURITIES

         Debt securities that management has the positive intent and ability to
         hold to maturity are classified as held-to-maturity and recorded at
         amortized cost. Securities not classified as held-to-maturity are
         classified as available for sale and recorded at fair value with
         unrealized gains and losses excluded from earnings and reported in
         accumulated other comprehensive income, net of the related deferred tax
         effect.

         The amortization of premiums and accretion of discounts are recognized
         in interest income using the interest method over the life of the
         securities. Realized gains and losses, determined on the basis of the
         cost of specific securities sold, are included in earnings on the
         settlement date. Declines in the fair value of held-to-maturity and
         available for sale securities below their cost that are deemed to be
         other than temporary are reflected in earnings as realized losses.

        LOANS

         Loans are reported at their outstanding principal balances less
         deferred fees and the allowance for loan losses. Interest income is
         accrued on the outstanding principal balance. Loan origination fees,
         net of certain direct loan origination costs, are deferred and
         recognized as an adjustment of the related loan yield over the life of
         the loan using a method which approximates a level yield.

         The accrual of interest on loans is discontinued when, in management's
         opinion, the borrower may be unable to meet payments as they become
         due, unless the loan is well-secured. All interest accrued but not
         collected for loans that are placed on nonaccrual or charged off is
         reversed against interest income, unless management believes that the
         accrued interest is recoverable through the liquidation of collateral.
         Interest income on nonaccrual loans is recognized on the cash-basis or
         cost-recovery method, until the loans are returned to accrual status.
         Loans are returned to accrual status when all the principal and
         interest amounts are brought current and future payments are reasonably
         assured.

         A loan is considered impaired when it is probable, based on current
         information and events, the Company will be unable to collect all
         principal and interest payments due in accordance with the contractual
         terms of the loan agreement. Impaired loans are measured by either the
         present value of expected future cash flows discounted at the loan's
         effective interest rate, the loan's obtainable market price, or the
         fair value of the collateral if the loan is collateral dependent. The
         amount of impairment, if any, and any subsequent changes are included
         in the allowance for loan losses. Interest on accruing impaired loans
         is recognized as long as such loans do not meet the criteria for
         nonaccrual status.

         The Company originates and sells participations in certain loans. Gains
         are recognized at the time the sale is consummated. The amount of gain
         recognized on the sale of a specific loan is equal to the percentage
         resulting from determining the fair value of the portion of the loan
         sold relative to the fair value of the entire loan. Losses are
         recognized at the time the loan is identified as held for sale and the
         loan's carrying value exceeds its fair value.

        ALLOWANCE FOR LOAN LOSSES

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

                                     - 3 -
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

        ALLOWANCE FOR LOAN LOSSES (CONTINUED)

         The allowance is an amount that management believes will be adequate to
         absorb estimated losses relating to specifically identified loans, as
         well as probable credit losses inherent in the balance of the loan
         portfolio, based on an evaluation of the collectibility of existing
         loans and prior loss experience. This evaluation also takes into
         consideration such factors as changes in the nature and volume of the
         loan portfolio, overall portfolio quality, review of specific problem
         loans, concentrations and current economic conditions that may affect
         the borrower's ability to pay. This evaluation does not include the
         effects of expected losses on specific loans or groups of loans that
         are related to future events or expected changes in economic
         conditions. While management uses the best information available to
         make its evaluation, future adjustments to the allowance may be
         necessary if there are significant changes in economic conditions. In
         addition, regulatory agencies, as an integral part of their examination
         process, periodically review the Bank's allowance for loan losses, and
         may require the Bank to make additions to the allowance based on their
         judgment about information available to them at the time of their
         examinations.

         The allowance consists of specific, general and unallocated components.
         The specific component relates to loans that are classified as either
         doubtful, substandard or special mention. For such loans that are also
         classified as impaired, an allowance is established when the discounted
         cash flows (or collateral value or observable market price) of the
         impaired loan is lower than the carrying value of that loan. The
         general component covers non-classified loans and is based on
         historical loss experience adjusted for qualitative factors. An
         unallocated component is maintained to cover uncertainties that could
         affect management's estimate of probable losses. The unallocated
         component of the allowance reflects the margin of imprecision inherent
         in the underlying assumptions used in the methodologies for estimating
         specific and general losses in the portfolio.

        PREMISES AND EQUIPMENT

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

        OTHER REAL ESTATE OWNED

         Other real estate owned represents properties acquired through or in
         lieu of foreclosure and are initially recorded at the lower of cost or
         fair value less estimated costs to sell. Any write-down to fair value
         at the time of transfer to other real estate owned is charged to the
         allowance for loan losses. Costs of improvements are capitalized,
         whereas costs relating to holding other real estate owned and
         subsequent adjustments to the value are expensed. There was no other
         real estate owned at either December 31, 2003 or 2002.

        INCOME TAXES

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

                                     - 4 -
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

        STOCK-BASED COMPENSATION

         The Company has a stock-based employee compensation plan, which is
         described more fully in Note 10. The Company accounts for this plan
         under the recognition and measurement principles of APB Opinion No. 25,
         Accounting for Stock Issued to Employees, and related Interpretations.
         No stock-based employee compensation cost is reflected in net income,
         as all options granted under this plan had an exercise price equal to
         the market value of the underlying stock on the date of grant. The
         following table illustrates the effect on net income and earnings per
         share if the Company had applied the fair value recognition provisions
         of SFAS No. 123, Accounting for Stock-Based Compensation, to
         stock-based employee compensation.

<TABLE>
<CAPTION>
                                                                      YEARS ENDED DECEMBER 31,
                                                                   -------------------------------
                                                                        2003             2002
                                                                   -------------     ------------
<S>                                                                <C>               <C>
Net income, as reported                                            $   1,974,941     $    954,766
Deduct: Total stock-based employee compensation
      expense determined under fair value based
      method for all awards, net of related tax effects                 (381,174)        (105,672)
                                                                   -------------     ------------
Pro forma net income                                               $   1,593,767     $    849,094
                                                                   =============     ============
Earnings per share:

   Basic - as reported                                             $        1.15     $        .57
                                                                   =============     ============
   Basic - pro forma                                               $         .93     $        .51
                                                                   =============     ============
   Diluted - as reported                                           $        1.11     $        .55
                                                                   =============     ============
   Diluted - pro forma                                             $         .90     $        .49
                                                                   =============     ============
</TABLE>

        EARNINGS PER SHARE

         Basic earnings per share are computed by dividing net income by the
         weighted average number of shares of common stock outstanding. Diluted
         earnings per share are computed by dividing net income by the sum of
         the weighted-average number of shares of common stock outstanding and
         potential common shares. Potential common shares consist of stock
         options.

        COMPREHENSIVE INCOME

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

                                     - 5 -
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         RECENT ACCOUNTING STANDARDS

          In December 2002, the FASB issued SFAS No. 148, Accounting for
          Stock-Based Compensation-Transition and Disclosure. SFAS No. 148
          amends SFAS No. 123, Accounting for Stock-Based Compensation, to
          provide alternative methods of transition for an entity that
          voluntarily changes to the fair value based method of accounting for
          stock-based employee compensation. It also amends the disclosure
          provisions of SFAS No. 123 to require prominent disclosure about the
          effects on reported net income of an entity's accounting policy
          decisions with respect to stock-based employee compensation. The
          Company has not elected to adopt the recognition provisions of this
          Statement for stock-based employee compensation and has elected to
          continue with accounting methodology in Opinion No. 25 as permitted by
          SFAS No. 123.

NOTE 2. SECURITIES

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

<TABLE>
<CAPTION>
                                                GROSS          GROSS
                               AMORTIZED      UNREALIZED     UNREALIZED       FAIR
                                 COST           GAINS          LOSSES         VALUE
                              ------------   ------------   ------------   ------------
<S>                           <C>            <C>            <C>            <C>
DECEMBER 31, 2003:
U. S. TREASURY AND U.S.
   GOVERNMENT AGENCIES        $ 12,398,663   $     55,774   $    (24,464)  $ 12,429,973
STATE AND MUNICIPAL              5,597,923         64,847        (37,226)     5,625,544
MORTGAGE-BACKED SECURITIES       4,348,131         97,576              -      4,445,707
                              ------------   ------------   ------------   ------------
                              $ 22,344,717   $    218,197   $    (61,690)  $ 22,501,224
                              ============   ============   ============   ============
 December 31, 2002:
 U. S. Treasury and U.S.
    Government agencies       $  5,995,516   $     81,054   $          -   $  6,076,570
 State and municipal             2,642,170          1,011            (44)     2,643,137
 Mortgage-backed securities     11,336,730        225,934              -     11,562,664
                              ------------   ------------   ------------   ------------
                              $ 19,974,416   $    307,999   $        (44)  $ 20,282,371
                              ============   ============   ============   ============
</TABLE>

          Securities with a carrying value of $1,499,790 and $3,038,090 at
          December 31, 2003 and 2002, respectively, were pledged to secure
          public deposits and for other purposes required or permitted by law.

          Gains and losses on sales of securities available for sale consist of
          the following:

<TABLE>
<CAPTION>
                                     DECEMBER 31,
                              ----------------------
                               2003          2002
                              -------    -----------
<S>                           <C>        <C>
Gross Gains                   $ 4,316    $         -
Gross losses                   (6,414)             -
                              -------    -----------
Net realized gains (losses)   $(2,098)   $         -
                              =======    ===========
</TABLE>

                                     - 6 -

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. SECURITIES (CONTINUED)

          The amortized cost and fair value of securities as of December 31,
          2003 by contractual maturity are shown below. Actual maturities may
          differ from contractual maturities because the mortgages underlying
          the securities may be called or repaid without penalty, Therefore,
          these securities are not included in the maturity categories in the
          following summary.

<TABLE>
<CAPTION>
                              AMORTIZED       FAIR
                                COST          VALUE
                             -----------   -----------
<S>                          <C>           <C>
Due from five to ten years   $16,300,812   $16,333,349
Due after ten years            1,695,774     1,722,168
Mortgage-backed securities     4,348,131     4,445,707
                             -----------   -----------
                             $22,344,717   $22,501,224
                             ===========   ===========
</TABLE>

          At December 31, 2003, no securities had been a continuous unrealized
          loss position for more than one year.

NOTE 3. LOANS

          The composition of loans is summarized as follows:

<TABLE>
<CAPTION>
                                                     DECEMBER 31,
                                            ------------------------------
                                                2003             2002
                                            -------------    -------------
<S>                                         <C>              <C>
Commercial                                  $  49,920,795    $  31,945,581
Commercial loans secured by real estate        47,510,237       37,983,404
Construction loans secured by real estate     112,259,526       84,828,691
Consumer installment and other                  5,774,679        5,689,558
                                            -------------    -------------
                                              215,465,237      160,447,234
Deferred fees                                    (327,782)        (281,130)
Allowance for loan losses                      (3,029,508)      (2,174,339)
                                            -------------    -------------
Loans, net                                  $ 212,107,947    $ 157,991,765
                                            =============    =============
</TABLE>

         Changes in the allowance for loan losses are as follows:

<TABLE>
<CAPTION>
                                                 YEARS ENDED DECEMBER 31,
                                                --------------------------
                                                   2003           2002
                                                -----------    -----------
<S>                                             <C>            <C>
Balance, beginning of year                      $ 2,174,339    $ 1,532,300
   Provision for loan losses                      1,033,118        643,850
   Loans charged off                               (177,949)        (6,911)
   Recoveries of loans previously charged off             -          5,100
                                                -----------    -----------
Balance, end of year                            $ 3,029,508    $ 2,174,339
                                                ===========    ===========
</TABLE>

          At December 31, 2003, the Company had real estate acquisition and
          development loans to certain borrowers totaling $630,000. Such loans
          have been accounted for as real estate investment because the risks
          and rewards associated with these loans are similar to those
          associated with an investment in real estate.

                                     - 7 -

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3. LOANS (CONTINUED)

          The total recorded investment in impaired loans, consisting solely of
          loans on nonaccrual status, was $1,449,059 and $445,774 at December
          31, 2003 and 2002, respectively. There were no impaired loans that had
          related allowances for loan losses determined in accordance with SFAS
          No. 114, Accounting by Creditors for Impairment of a Loan, at December
          31, 2003 and 2002. The average recorded investment in impaired loans
          for 2003 and 2002 was $843,596 and $125,823, respectively. Interest
          income recognized on impaired loans for cash payments received was not
          material for the years ended 2003 and 2002.

          There were no loans past due ninety days or more and still accruing
          interest at December 31, 2003 and 2002.

          In the ordinary course of business, the Company has granted loans to
          certain related parties, including directors, executive officers, and
          their affiliates. The interest rates on these loans were substantially
          the same as rates prevailing at the time of the transaction and
          repayment terms are customary for the type of loan. Changes in related
          party loans for the year ended December 31, 2003 are as follows:

<TABLE>
<S>                          <C>
Balance, beginning of year   $ 6,096,751
   Advances                    5,502,958
   Repayments                 (4,323,538)
                             -----------
Balance, end of year         $ 7,276,171
                             ===========
</TABLE>

NOTE 4. PREMISES AND EQUIPMENT

          Premises and equipment are summarized as follows:

<TABLE>
<CAPTION>
                                  DECEMBER 31,
                           -------------------------
                               2003         2002
                           -----------    ----------
<S>                        <C>            <C>
Equipment                  $ 1,540,151    $1,414,132
Leasehold improvements         320,635       320,635
                           -----------    ----------
                             1,860,786     1,734,767
Accumulated depreciation    (1,365,169)   (1,109,219)
                           -----------    ----------
                           $   495,617    $  625,548
                           ===========    ==========
</TABLE>

NOTE 5. DEPOSITS

          The aggregate amount of time deposits in denominations of $100,000 or
          more at December 31, 2003 and 2002 was $73,803,119 and $54,071,984,
          respectively. The Company had brokered certificates of deposit at
          December 31, 2003 and 2002 of $52,135,247 and $39,952,299,
          respectively. The scheduled maturities of time deposits at December
          31, 2003 are as follows:

<TABLE>
<S>    <C>
2004   $111,954,368
2005     20,241,098
2006     15,956,405
2007      6,451,655
2008        279,950
       ------------
       $154,883,476
       ============
</TABLE>

                                     - 8 -

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6. SECURITIES SOLD UNDER REPURCHASE AGREEMENTS

          Securities sold under repurchase agreements, which are secured
          borrowings, generally mature within one to four days from the
          transaction date. Securities sold under repurchase agreements are
          reflected at the amount of cash received in connection with the
          transactions. The Company may be required to provide additional
          collateral based on the fair value of the underlying securities. The
          Company monitors the fair value of the underlying securities on a
          daily basis. Securities sold under repurchase agreements at December
          31, 2003 and 2002 were $352,799 and $541,214, respectively.

NOTE 7. DEFERRED COMPENSATION PLANS

          The Company has a deferred compensation plan providing for death and
          retirement benefits for its executive officers. The estimated amounts
          to be paid under the compensation plan are being funded through the
          purchase of life insurance policies on the executive officers. The
          balance of the policy cash surrender values included in other assets
          at December 31, 2003 and 2002 is $4,671,616 and $3,053,719,
          respectively. Income recognized on the policies amounted to $159,897
          and $141,851 for the years ended December 31, 2003 and 2002,
          respectively. Deferred compensation expense recognized for the years
          ended December 31, 2003 and 2002 amounted to $219,031 and $122,621,
          respectively.

          Effective January 1, 2001, the Company established a "Deferred Stock
          Unit" plan in which members of the Board of Directors and Executive
          Officers may choose to receive "deferred fee units" as consideration
          for their directors' fees in lieu of cash. The deferred fee units
          assigned to the members equal the number of shares of common stock
          that could be purchased at the fair market value with the amount of
          fees deferred. The units will be settled in cash when the member
          terminates service as a director or there is a change in control of
          the Company at the fair market value of the Company's common stock.
          The member may receive a lump sum cash payment for the value of the
          units or defer cash payments for a period of up to ten years. At
          December 31, 2003 and 2002, 22,096 and 14,559 units, respectively,
          have been assigned to the members under this plan. The fair market
          value of the units included in other liabilities amounted to $320,400
          and $203,800 at December 31, 2003 and 2002, respectively. The units
          are not considered to be potential common shares.

                                     - 9 -

<PAGE>

                                     - 10 -
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8. INCOME TAXES

          Income tax expense consists of the following:

<TABLE>
<CAPTION>
                             YEARS ENDED DECEMBER 31,
                             ------------------------
                                2003           2002
                             -----------    ---------
<S>                          <C>            <C>
Current                      $ 1,508,383    $ 798,149
Deferred                        (513,540)    (342,077)
                             -----------    ---------
        Income tax expense   $   994,843    $ 456,072
                             ===========    =========
</TABLE>

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

<TABLE>
<CAPTION>
                                         YEARS ENDED DECEMBER 31,
                                         ------------------------
                                            2003          2002
                                         -----------    ---------
<S>                                      <C>            <C>
Income taxes at statutory federal rate   $ 1,009,727    $ 479,684
Tax-exempt income                           (100,724)     (49,507)
Other                                         85,840       25,895
                                         -----------    ---------
Income tax expense                       $   994,843    $ 456,072
                                         ===========    =========
</TABLE>

          The components of deferred income taxes are as follows:

<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                                          ---------------------
                                                             2003        2002
                                                          ----------   --------
<S>                                                       <C>          <C>
Deferred tax assets:
  Loan loss reserves                                      $1,114,674   $738,573
  Loan fees                                                  123,691    106,150
  Depreciation                                                15,118     21,798
  Deferred compensation                                      249,830    123,252
                                                          ----------   --------
                                                           1,503,313    989,773
                                                          ----------   --------
Deferred tax liabilities, securities available for sale       59,472    107,784
                                                          ----------   --------
Net deferred tax assets                                   $1,443,842   $881,989
                                                          ==========   ========
</TABLE>

                                     - 11 -
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9. RELATED PARTY TRANSACTIONS AND LEASES

          The Company leases its main office banking facilities under a
          noncancelable operating lease agreement from GBC Properties, LLC, a
          partnership formed by the organizers of the Company. The lease term is
          for fifteen years with the monthly rental payment adjusting every
          fifth year for changes in the Consumer Price Index. The Company also
          leases its branch facilities under a noncancelable operating lease
          from a third party. The initial lease term is for five years with the
          monthly rental payment increasing every year by 3%. The lease also
          includes two five-year extension terms. Both lease agreements require
          the Company to pay normal operating and occupancy expenses of the
          facilities. The total minimum rental commitments under the leases at
          December 31, 2003 are due as follows:

<TABLE>
<S>                                       <C>
During the next five years                $1,990,680
During the remaining term of the leases    1,721,485
                                          ----------
                                          $3,712,165
                                          ==========
</TABLE>

          Total rental expense is summarized as follows:

<TABLE>
<CAPTION>
                        YEARS ENDED DECEMBER 31,
                      ---------------------------
                          2003           2002
                      ------------   ------------
<S>                   <C>            <C>
GBC Properties, LLC   $    286,596   $    286,596
Other third parties        120.378        117,865
                      ------------   ------------
                      $    406,974   $    404,461
                      ============   ============
</TABLE>

NOTE 10. STOCK-BASED COMPENSATION

          The Company has reserved 398,500 shares of common stock for issuance
          to employees and directors under an incentive stock option plan. The
          options granted are exercisable at a price equal to fair value on the
          date of grant and expire ten years from the grant date.

          Other pertinent information related to the options is as follows:

<TABLE>
<CAPTION>
                                                      YEARS ENDED DECEMBER 31,
                                     ---------------------------------------------------------
                                                2003                           2002
                                     ---------------------------   ---------------------------
                                                      WEIGHTED-                     Weighted-
                                                      AVERAGE                       average
                                                      EXERCISE                      Exercise
                                        NUMBER         PRICE          Number         Price
                                     ------------   ------------   ------------   ------------
<S>                                  <C>            <C>            <C>            <C>
Under option, beginning of year           262,325   $      11.16        186,000   $      10.00
   Granted                                 76,000          14.00         76,325          14.00
   Exercised                               (1,325)         11.58              -
   Terminated                                (200)         14.00              -
                                          -------   ------------        -------   ------------
Under option, end of year                 336,800          11.80        262,325          11.16
                                          -------   ------------        -------   ------------
Exercisable, end of year                  336,800          11.80        224,163          10.68
                                          =======   ============        =======   ============
Weighted average fair value of
   options granted during the year                          5.57                          4.45
</TABLE>

                                     - 12 -

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10. STOCK COMPENSATION PLAN (CONTINUED)

          Information pertaining to options outstanding at December 31, 2003 is
          as follows:

<TABLE>
<CAPTION>
                                 OPTIONS OUTSTANDING                   OPTIONS EXERCISABLE
                      ------------------------------------------   ------------------------------
                                        WEIGHTED-
                                         AVERAGE        WEIGHTED-                       WEIGHTED-
                                        REMAINING        AVERAGE                         AVERAGE
    RANGE OF             NUMBER        CONTRACTUAL       EXERCISE         NUMBER        EXERCISE
EXERCISE PRICES       OUTSTANDING          LIFE           PRICE        EXERCISABLE        PRICE
---------------       -----------      -----------     ----------      -----------   ------------
<S>                   <C>              <C>             <C>             <C>           <C>
$10.00 - $14.00         336,800            7.18        $    11.80      336,800       $      11.80
</TABLE>

          The fair value of each option grant is estimated on the date of grant
          using the Black-Scholes option-pricing model with the following
          weighted-average assumptions:

<TABLE>
<CAPTION>
                           YEAR ENDED
                          DECEMBER 31,
                               2003
                          ------------
<S>                       <C>
Dividend yield                    0%
Expected life              10 years
Expected volatility               0%
Risk-free interest rate        4.55%
</TABLE>

NOTE 11. EARNINGS PER SHARE

          Presented below is a summary of the components used to calculate basic
          and diluted earnings per share.

<TABLE>
<CAPTION>
                                                  YEARS ENDED DECEMBER 31,
                                             ---------------------------------
                                                  2003               2002
                                             ---------------   ---------------
<S>                                          <C>               <C>
Basic Earnings Per Share:
Weighted average common shares outstanding         1,711,816         1,680,884
                                             ===============   ===============
Net income                                   $     1,974,941   $       954,766
                                             ===============   ===============
Basic earnings per share                     $          1.15   $           .57
                                             ===============   ===============
</TABLE>

                                     - 13 -

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11. EARNINGS PER SHARE (CONTINUED)

<TABLE>
<CAPTION>
                                                       YEARS ENDED DECEMBER 31,
                                                   ---------------------------------
                                                        2003              2002
                                                   ---------------   ---------------
<S>                                                <C>               <C>
Diluted Earnings Per Share:
   Weighted average common shares outstanding            1,711,816         1,680,884
   Net effect of the assumed exercise of stock
      options based on the treasury stock method
      using average market prices for the year              62,609            53,143
                                                   ---------------   ---------------
   Total weighted average common shares and
         common stock equivalents outstanding            1,774,426         1,734,027
                                                   ===============   ===============
   Net income                                      $     1,974,941   $       954,766
                                                   ===============   ===============
   Diluted earnings per share                      $          1.11   $           .55
                                                   ===============   ===============
</TABLE>

NOTE 12. COMMITMENTS AND CONTINGENCIES

         LOAN COMMITMENTS

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

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

<TABLE>
<CAPTION>
                                                      DECEMBER 31,
                                             ------------------------------
                                                  2003             2002
                                             -------------    -------------
<S>                                          <C>              <C>
Financial standby letters of credit          $   7,920,996    $   3,732,872
Commitments to extend credit                    81,459,639       66,067,474
                                             -------------    -------------
                                             $  89,380,635    $  69,800,346
                                             =============    =============
</TABLE>

          Commitments to extend credit are agreements to lend to a customer as
          long as there is no violation of any condition established in the
          contract. Commitments generally have fixed expiration dates or other
          termination clauses and may require payment of a fee. Since many of
          the commitments are expected to expire without being drawn upon, the
          total commitment amounts do not necessarily represent future cash
          requirements. The amount of collateral obtained, if deemed necessary
          by the Company upon extension of credit, is based on management's
          credit evaluation of the party. Collateral held varies, but may
          include accounts receivable, inventory, property and equipment,
          residential real estate and income-producing commercial properties.

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

                                     - 14 -

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12. COMMITMENTS AND CONTINGENCIES (CONTINUED)

         CONTINGENCIES

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

NOTE 13. CONCENTRATIONS OF CREDIT

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

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

          The Company does not generally extend credit to any single borrower or
          group of related borrowers in excess of 25% of statutory capital, or
          approximately $4,750,000.

NOTE 14. REGULATORY MATTERS

          The Bank is subject to certain restrictions on the amount of dividends
          that may be declared without prior regulatory approval. At December
          31, 2003, approximately $1,011,700 of dividends could be declared
          without regulatory approval.

          The Company and the Bank are subject to various regulatory capital
          requirements administered by the federal banking agencies. Failure to
          meet minimum capital requirements can initiate certain mandatory, and
          possibly additional discretionary actions by regulators that, if
          undertaken, could have a direct material effect on the consolidated
          financial statements. Under capital adequacy guidelines and the
          regulatory framework for prompt corrective action, the Company and
          Bank must meet specific capital guidelines that involve quantitative
          measures of the Company and Bank's assets, liabilities, and certain
          off-balance sheet items as calculated under regulatory accounting
          practices. Capital amounts and classification are also subject to
          qualitative judgments by the regulators about components, risk
          weightings, and other factors.

          Quantitative measures established by regulation to ensure capital
          adequacy require the Company and the Bank to maintain minimum amounts
          and ratios of Total and Tier I capital to risk-weighted assets, as
          defined and of Tier I capital to average assets. Management believes,
          as of December 31, 2003 and 2002, the Company and the Bank met all
          capital adequacy requirements to which they are subject.

          As of December 31, 2003, the most recent notification from the Federal
          Deposit Insurance Corporation categorized the Bank as well capitalized
          under the regulatory framework for prompt corrective action. To be
          categorized as well capitalized, the Bank must maintain minimum total
          risk-based, Tier I risk-based, and Tier I leverage ratios as set forth
          in the following table. There are no conditions or events since that
          notification that management believes have changed the Bank's
          category. Prompt corrective provisions are not applicable to bank
          holding companies.

                                     - 15 -

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14. REGULATORY MATTERS (CONTINUED)

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

<TABLE>
<CAPTION>
                                                                                                        TO BE WELL
                                                                            FOR CAPITAL             CAPITALIZED UNDER
                                                                              ADEQUACY              PROMPT CORRECTIVE
                                                    ACTUAL                    PURPOSES              ACTION PROVISIONS
                                           -----------------------    -----------------------    -----------------------
                                             AMOUNT        RATIO        AMOUNT       RATIO         AMOUNT       RATIO
                                           ----------   ----------    ----------   ----------    ----------   ----------
                                                                       (DOLLARS IN THOUSANDS)
                                           -----------------------------------------------------------------------------
<S>                                        <C>          <C>           <C>          <C>           <C>          <C>
DECEMBER 31, 2003:
TOTAL CAPITAL TO RISK WEIGHTED ASSETS:
   CONSOLIDATED                            $   26,039        11.32%   $   18,409            8%   $      N/A          N/A
   BANK                                    $   25,453        11.06%   $   18,409            8%   $   23,011           10%

TIER I CAPITAL TO RISK WEIGHTED
ASSETS:
   CONSOLIDATED                            $   23,220        10.09%   $    9,204            4%   $      N/A          N/A
   BANK                                    $   22,634         9.84%   $    9,204            4%   $   13,809            6%

TIER I CAPITAL TO AVERAGE ASSETS:
   CONSOLIDATED                            $   23,220         9.40%   $    9,881            4%   $      N/A          N/A
   BANK                                    $   22,634         9.16%   $    9,881            4%   $   12,351            5%

December 31, 2002:
Total Capital to Risk Weighted Assets:
   Consolidated                            $   23,362        13.70%   $   13,640            8%   $      N/A          N/A
   Bank                                    $   22,785        13.34%   $   13,640            8%   $   17,050           10%

Tier I Capital to Risk Weighted
Assets:
   Consolidated                            $   21,230        12.45%   $    6,820            4%   $      N/A          N/A
   Bank                                    $   20,611        12.09%   $    6,820            4%   $   10,230            6%

Tier I Capital to Average Assets:
   Consolidated                            $   21,230        10.90%   $    7,789            4%   $      N/A          N/A
   Bank                                    $   20,611        10.58%   $    7,789            4%   $    9,737            5%
</TABLE>

                                     - 16 -

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15. FAIR VALUE OF FINANCIAL INSTRUMENTS

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

          CASH, DUE FROM BANKS AND FEDERAL FUNDS SOLD: The carrying amounts of
          cash, due from banks, and federal funds sold approximate fair values.

          SECURITIES: Fair values for securities are based on available quoted
          market prices.

          LOANS: The carrying amount of variable-rate loans that reprice
          frequently and have no significant change in credit risk approximates
          fair value. The fair value of fixed rate loans is estimated based on
          discounted contractual cash flows using interest rates currently being
          offered for loans with similar terms to borrowers with similar credit
          quality. The fair value for impaired loans is estimated based on
          discounted contractual cash flows or underlying collateral values,
          where applicable.

          DEPOSITS: The carrying amount of demand deposits, savings deposits,
          and variable-rate certificates of deposit approximates fair value. The
          fair value of fixed-rate certificates of deposit is estimated based on
          discounted contractual cash flows using interest rates currently being
          offered for certificates of similar maturities.

          SECURITIES SOLD UNDER REPURCHASE AGREEMENTS: The carrying amounts of
          securities sold under repurchase agreements approximate fair value.

          ACCRUED INTEREST: The carrying amount of accrued interest approximates
          their fair values.

          OFF-BALANCE SHEET INSTRUMENTS: The carrying amount of commitments to
          extend credit and standby letters of credit approximates fair value.
          The carrying amount of the off-balance sheet financial instruments is
          based on fees charged to enter into such agreements. Since the
          majority of the Company's off-balance sheet instruments consist of
          nonfee-producing, variable-rate commitments, the Company has
          determined they do not have a distinguishable fair value.

                                     - 17 -

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

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

<TABLE>
<CAPTION>
                                        DECEMBER 31, 2003              December 31, 2002
                                   ---------------------------   ---------------------------
                                     CARRYING         FAIR         Carrying         Fair
                                      AMOUNT         VALUE          Amount         Value
                                   ------------   ------------   ------------   ------------
<S>                                <C>            <C>            <C>            <C>
FINANCIAL ASSETS:
   Cash, due from banks,
      and federal funds sold       $  4,909,507   $  4,909,507   $ 14,187,345   $ 14,187,345
   Securities available-for-sale     22,501,224     22,501,224     20,282,371     20,282,371
   Loans                            212,107,947    216,339,000    157,991,765    162,163,000
   Accrued interest receivable        1,087,494      1,087,494        982,359        982,359

FINANCIAL LIABILITIES:
   Deposits                         222,051,041    224,396,000    174,783,453    177,000,000
   Accrued interest payable             384,708        384,708        461,392        461,392
   Securities sold under
      repurchase agreements             352,799        352,799        541,214        541,214
</TABLE>

NOTE 16. SUPPLEMENTAL FINANCIAL DATA

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

<TABLE>
<CAPTION>
                                         YEARS ENDED DECEMBER 31,
                                       ---------------------------
                                           2003           2002
                                       ------------   ------------
<S>                                    <C>            <C>
Other operating income:
   Mortgage origination fees           $    166,240   $    151,235
   Income on life insurance policies        159,897        141,851

Other operating expenses:
   Professional and consulting              188,728        214,938
   Data processing                          167,444        143,221
</TABLE>

                                     - 18 -

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17. PARENT COMPANY FINANCIAL INFORMATION

          The following information presents the condensed balance sheets,
          statements of income and cash flows of GBC Bancorp, Inc., as of and
          for the years ended December 31, 2003 and 2002.

                            CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                     2003           2002
                                  -----------   -----------
<S>                               <C>           <C>
ASSETS
 Cash                             $   556,646   $   585,370
 Investment in subsidiary          22,731,042    20,810,778
 Other assets                          29,390        33,775
                                  -----------   -----------

   Total assets                   $23,317,078   $21,429,923
                                  ===========   ===========

     TOTAL STOCKHOLDERS' EQUITY   $23,317,078   $21,429,923
                                  ===========   ===========
</TABLE>

                         CONDENSED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                         2003           2002
                                                      -----------    ---------
<S>                                                   <C>            <C>
INTEREST INCOME                                       $         -    $  19,365

EXPENSES, OTHER                                            77,850       89,693
                                                      -----------    ---------

       INCOME (LOSS) BEFORE INCOME TAX
           EXPENSE (BENEFIT) AND EQUITY IN
           UNDISTRIBUTED EARNINGS OF SUBSIDIARY           (77,850)     (70,328)

INCOME TAX EXPENSE (BENEFIT)                              (29,390)     (26,504)
                                                      -----------    ---------

       INCOME (LOSS) BEFORE EQUITY IN UNDISTRIBUTED
           EARNINGS OF SUBSIDIARY                         (48,460)     (43,824)

EQUITY IN UNDISTRIBUTED EARNINGS
   OF SUBSIDIARY                                        2,023,401      998,590
                                                      -----------    ---------

        NET INCOME                                    $ 1,974,941    $ 954,766
                                                      ===========    =========
</TABLE>

                                     - 19 -

<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17. PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)

                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                          2003           2002
                                                       -----------    -----------
<S>                                                    <C>            <C>
OPERATING ACTIVITIES
   Net income                                          $ 1,974,941    $   954,766
   Adjustments to reconcile net income to net
      cash used in operating activities:
      Equity in undistributed earnings of subsidiary    (2,023,401)      (998,590)
      Net other operating activities                         4,386        (20,656)
                                                       -----------    -----------

       Net cash used in operating activities               (44,074)       (64,480)
                                                       -----------    -----------
INVESTING ACTIVITIES

   Investment in subsidiary                                      -     (2,400,000)
                                                       -----------    -----------
       Net cash used in investing activities                     -     (2,400,000)
                                                       -----------    -----------
FINANCING ACTIVITIES

   Proceeds from sale of common stock                            -      2,924,136
   Proceeds from the issuance of common stock               15,350              -
   Stock offering costs                                          -        (10,443)
                                                       -----------    -----------

       Net cash provided by financing activities            15,350      2,913,693
                                                       -----------    -----------
Net increase (decrease) in cash                            (28,724)       449,213

Cash at beginning of year                                  585,370        136,157
                                                       -----------    -----------

Cash at end of year                                    $   556,646    $   585,370
                                                       ===========    ===========
</TABLE>

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