##### 



SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q

|  |  |                                                                                                                                                         
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------
|x |  | Quarterly Report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 for the quarterly period ended June 30, 2003                   
|  |  |                                                                                                                                                         
|o |  | Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from
     
     
     
     
     
to

Commission file number: 000-30805

WGNB CORP.




(Exact name of registrant as specified in its charter)


|                         |  |                                     
|------------------------ |  | ------------------------------------
|Georgia                  |  | 58-1640130                          
|                         |  |                                     
|(State of Incorporation) |  | (I.R.S. Employer Identification No.)

201 Maple Street
P.O. Box 280
Carrollton, Georgia 30112




(Address of principal executive offices)


(770) 832-3557




(Registrants telephone number, including area code)


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

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).   Yes o   No x

Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the latest practicable date:

|                              |  |                              
|----------------------------- |  | -----------------------------
|Class                         |  | Outstanding at August 4, 2003
|                              |  |                              
|Common Stock, $1.25 par value |  | 3,310,577                    





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WGNB CORP.

INDEX TO FORM 10-Q

|             |  |                                                                                                        |  |     
|------------ |  | ------------------------------------------------------------------------------------------------------ |  | ----
|Item Number  |  |                                                                                                        |  |     
|in Form 10-Q |  | Description                                                                                            |  | Page
|             |  |                                                                                                        |  |     
|Part One     |  | Financial Information                                                                                  |  |     
|Item 1.      |  | Financial Statements                                                                                   |  | 1   
|             |  | Consolidated Balance Sheets at June 30, 2003 and December 31,
2002                                     |  | 2   
|             |  | Consolidated Statements of Earnings for Three Months Ended June
30, 2003 and June 30, 2002             |  | 3   
|             |  | Consolidated Statements of Comprehensive Income for Three
Months Ended June 30, 2003 and June 30, 2002 |  | 4   
|             |  | Consolidated Statements of Earnings for Six Months Ended June
30, 2003 and June 30, 2002               |  | 5   
|             |  | Consolidated Statements of Comprehensive Income for Six Months
Ended June 30, 2003 and June 30, 2002   |  | 6   
|             |  | Consolidated Statements of Cash Flows for Six Months Ended
June 30, 2003 and June 30, 2002             |  | 7   
|             |  | Notes to Consolidated Financial Statements                                                             |  | 9   
|Item 2.      |  | Managements Discussion and Analysis of Financial Condition and
Results of Operations                  |  | 12  
|Item 3.      |  | Quantitative and Qualitative Disclosures About Market Risk                                             |  | 15  
|Item 4.      |  | Controls and Procedures                                                                                |  | 15  
|Part Two     |  | Other Information                                                                                      |  |     
|Item 1.      |  | Legal Proceedings                                                                                      |  | 16  
|Item 2.      |  | Changes in Securities and Use of Proceeds                                                              |  | 16  
|Item 3.      |  | Defaults Upon Senior Securities                                                                        |  | 16  
|Item 4.      |  | Submission of Matters to a Vote of Security Holders                                                    |  | 16  
|Item 5.      |  | Other Information                                                                                      |  | 16  
|Item 6.      |  | Exhibits and Reports on Form 8-K                                                                       |  | 17  
|             |  | Signatures                                                                                             |  | 18  





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Part I  Financial Information

Item 1. Financial Statements

The unaudited financial statements of WGNB Corp. (the Company) are set
forth on the following pages. All adjustments have been made which, in the
opinion of management, are necessary in order to make the financial statements
not misleading.

1



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##### 



WGNB CORP.

Consolidated Balance Sheet


June 30, 2003

|                                                                    |                                                                                                                    |                            |             |                      |             |                   |             |             |             | 
|------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------ | -------------------------- | ----------- | -------------------- | ----------- | ----------------- | ----------- | ----------- | ----------- | 
|                                                                    |                                                                                                                    |                            |             | For the Period Ended
|                                                                    |                                                                                                                    |                            |             |                     
|                                                                    |                                                                                                                    |                            |             | June 30, 2003        |             | December 31, 2002
|                                                                    |                                                                                                                    |                            |             |                      |             |                  
|                                                                    |                                                                                                                    |                            |             | (unaudited)          |             | (audited)        
|                                                                    |                                                                                                                    |                            |             |                      |             |                  
|Assets                                                             
|Cash and due from banks, including reserve requirements
of $100,000 |                                                                                                                    | $                          | 14,239,659  |                      |             | $                 | 16,963,822  |            
|Federal funds sold                                                  |                                                                                                                    |                            | 17,639,221  |                      |             |                   | 30,703,388  |            
|                                                                    |                                                                                                                    |                            |             |                      |             |                   |             |            
|                                                                    |                                                                                                                    | Cash and cash equivalents  |             |                      | 31,878,880  |                   |             |             | 47,667,210  | 
|Securities available for sale                                       |                                                                                                                    |                            | 54,325,916  |                      |             |                   | 52,131,793  |            
|Securities held to maturity                                         |                                                                                                                    |                            | 4,000,000   |                      |             |                   | 3,500,000   |            
|Loans, net                                                          |                                                                                                                    |                            | 282,746,970 |                      |             |                   | 269,212,860 |            
|Premises and equipment, net                                         |                                                                                                                    |                            | 6,817,007   |                      |             |                   | 5,959,767   |            
|Accrued interest receivable                                         |                                                                                                                    |                            | 2,160,403   |                      |             |                   | 2,027,228   |            
|Other assets                                                        |                                                                                                                    |                            | 4,351,246   |                      |             |                   | 4,622,304   |            
|                                                                    |                                                                                                                    |                            |             |                      |             |                   |             |            
|                                                                    |                                                                                                                    | $                          | 386,280,422 |                      |             |                   | 385,121,162 |            
|                                                                    |                                                                                                                    |                            |             |                      |             |                   |             |            
|Liabilities and Stockholders Equity                               
|Deposits:                                                           |                                                                                                                    |                            |             |                      |             |                   |             |            
|                                                                    | Demand                                                                                                             |                            | $           | 39,260,815           |             |                   | $           | 38,039,880  |            
|                                                                    | Interest bearing demand                                                                                            |                            |             | 117,223,870          |             |                   |             | 123,831,459 |            
|                                                                    | Savings                                                                                                            |                            |             | 10,799,632           |             |                   |             | 9,031,153   |            
|                                                                    | Time                                                                                                               |                            |             | 88,928,505           |             |                   |             | 86,680,351  |            
|                                                                    | Time, over $100,000                                                                                                |                            |             | 40,433,377           |             |                   |             | 41,143,025  |            
|                                                                    |                                                                                                                    |                            |             |                      |             |                   |             |            
|                                                                    |                                                                                                                    | Total deposits             |             |                      | 296,646,199 |                   |             |             | 298,725,868 | 
|Federal Home Loan Bank advances                                     |                                                                                                                    |                            | 45,000,000  |                      |             |                   | 45,000,000  |            
|Accrued interest payable                                            |                                                                                                                    |                            | 1,243,544   |                      |             |                   | 1,210,424   |            
|Other liabilities                                                   |                                                                                                                    |                            | 2,359,343   |                      |             |                   | 1,664,919   |            
|                                                                    |                                                                                                                    |                            |             |                      |             |                   |             |            
|                                                                    |                                                                                                                    | Total liabilities          |             |                      | 345,249,086 |                   |             |             | 346,601,211 | 
|                                                                    |                                                                                                                    |                            |             |                      |             |                   |             |            
|Stockholders equity:                                               |                                                                                                                    |                            |             |                      |             |                   |             |            
|                                                                    | Common stock, $1.25 par value, 10,000,000 shares authorized;
3,310,577 and 3,306,733 shares issued and outstanding |                            |             | 4,138,221            |             |                   |             | 4,133,416   |            
|                                                                    | Additional paid-in capital                                                                                         |                            |             | 5,391,278            |             |                   |             | 5,367,172   |            
|                                                                    | Retained earnings                                                                                                  |                            |             | 29,502,135           |             |                   |             | 27,709,213  |            
|                                                                    | Accumulated comprehensive income                                                                                   |                            |             | 1,999,702            |             |                   |             | 1,310,150   |            
|                                                                    |                                                                                                                    |                            |             |                      |             |                   |             |            
|                                                                    |                                                                                                                    | Total stockholders equity |             |                      | 41,031,336  |                   |             |             | 38,519,951  | 
|                                                                    |                                                                                                                    |                            |             |                      |             |                   |             |            
|                                                                    |                                                                                                                    | $                          | 386,280,422 |                      |             | $                 | 385,121,162 |            
|                                                                    |                                                                                                                    |                            |             |                      |             |                   |             |            

See accompanying notes to consolidated financial statements.

2



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##### 



WGNB CORP.

Consolidated Statements of Earnings


For the Three Months Ended June 30, 2003 and 2002
(unaudited)

|                          |                                               |                             |                                                     |           |                            |           |               |           |           |           | 
|------------------------- | --------------------------------------------- | --------------------------- | --------------------------------------------------- | --------- | -------------------------- | --------- | ------------- | --------- | --------- | --------- | 
|                          |                                               |                             |                                                     |           | For the Three Months Ended
|                          |                                               |                             |                                                     |           |                           
|                          |                                               |                             |                                                     |           | June 30, 2003              |           | June 30, 2002
|                          |                                               |                             |                                                     |           |                            |           |              
|Interest income:          |                                               |                             |                                                     |           |                            |           |               |          
|                          | Interest and fees on loans                    |                             | $                                                   | 5,147,023 |                            |           | $             | 5,136,541 |          
|                          | Interest on federal funds sold                |                             |                                                     | 44,329    |                            |           |               | 55,646    |          
|                          | Interest on investment securities:            |                             |                                                     |           |                            |           |               |           |          
|                          |                                               | U.S. Government agencies    |                                                     |           | 261,175                    |           |               |           | 426,915   |          
|                          |                                               | State, county and municipal |                                                     |           | 335,535                    |           |               |           | 298,824   |          
|                          |                                               | Other                       |                                                     |           | 115,688                    |           |               |           | 106,581   |          
|                          |                                               |                             |                                                     |           |                            |           |               |          
|                          |                                               |                             | Total interest income                               |           |                            | 5,903,750 |               |           |           | 6,024,507 | 
|                          |                                               |                             |                                                     |           |                            |           |               |          
|Interest expense:         |                                               |                             |                                                     |           |                            |           |               |          
|                          | Interest on deposits:                         |                             |                                                     |           |                            |           |               |           |          
|                          |                                               | Demand                      |                                                     |           | 238,306                    |           |               |           | 380,601   |          
|                          |                                               | Savings                     |                                                     |           | 14,876                     |           |               |           | 24,238    |          
|                          |                                               | Time                        |                                                     |           | 1,059,605                  |           |               |           | 1,273,004 |          
|                          | Interest on FHLB and other borrowings         |                             |                                                     | 608,875   |                            |           |               | 454,978   |          
|                          |                                               |                             |                                                     |           |                            |           |               |          
|                          |                                               |                             | Total interest expense                              |           |                            | 1,921,662 |               |           |           | 2,132,821 | 
|                          |                                               |                             |                                                     |           |                            |           |               |          
|                          |                                               |                             | Net interest income                                 |           |                            | 3,982,088 |               |           |           | 3,891,686 | 
|Provision for loan losses |                                               |                             | 75,000                                              |           |                            |           | 75,000        |          
|                          |                                               |                             |                                                     |           |                            |           |               |          
|                          |                                               |                             | Net interest income after
provision for loan losses |           |                            | 3,907,088 |               |           |           | 3,816,686 | 
|                          |                                               |                             |                                                     |           |                            |           |               |          
|Other income:             |                                               |                             |                                                     |           |                            |           |               |          
|                          | Service charges on deposit accounts           |                             |                                                     | 894,185   |                            |           |               | 780,746   |          
|                          | Mortgage origination fee                      |                             |                                                     | 267,539   |                            |           |               | 200,463   |          
|                          | Gain on sale of securities available for sale |                             |                                                     |          |                            |           |               | 5,231     |          
|                          | Miscellaneous                                 |                             |                                                     | 348,896   |                            |           |               | 211,172   |          
|                          |                                               |                             |                                                     |           |                            |           |               |          
|                          |                                               |                             | Total other income                                  |           |                            | 1,510,620 |               |           |           | 1,197,612 | 
|                          |                                               |                             |                                                     |           |                            |           |               |          
|Other expenses:           |                                               |                             |                                                     |           |                            |           |               |          
|                          | Salaries and employee benefits                |                             |                                                     | 1,941,195 |                            |           |               | 1,767,389 |          
|                          | Occupancy                                     |                             |                                                     | 439,047   |                            |           |               | 415,521   |          
|                          | Other operating                               |                             |                                                     | 833,931   |                            |           |               | 839,419   |          
|                          |                                               |                             |                                                     |           |                            |           |               |          
|                          |                                               |                             | Total other expenses                                |           |                            | 3,214,173 |               |           |           | 3,022,329 | 
|                          |                                               |                             |                                                     |           |                            |           |               |          
|                          |                                               |                             | Earnings before income taxes                        |           |                            | 2,203,535 |               |           |           | 1,991,969 | 
|Income taxes              |                                               |                             | 689,553                                             |           |                            |           | 676,581       |          
|                          |                                               |                             |                                                     |           |                            |           |               |          
|                          |                                               |                             | Net earnings                                        |           | $                          | 1,513,982 |               |           | $         | 1,315,388 | 
|                          |                                               |                             |                                                     |           |                            |           |               |          
|                          |                                               |                             | Basic earnings per share                            |           | $                          | 0.46      |               |           | $         | 0.40      | 
|                          |                                               |                             |                                                     |           |                            |           |               |          
|                          |                                               |                             | Diluted net earnings per share                      |           | $                          | 0.45      |               |           | $         | 0.40      | 
|                          |                                               |                             |                                                     |           |                            |           |               |          
|                          |                                               |                             | Dividends declared per share                        |           | $                          | 0.1650    |               |           | $         | 0.1475    | 
|                          |                                               |                             |                                                     |           |                            |           |               |          

See accompanying notes to consolidated financial statements.

3



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WGNB CORP.

Consolidated Statements of Comprehensive Income


For the Three Months Ended June 30, 2003 and 2002
(unaudited)

|                                        |                                                               |                                            |           |                            |          |               |           |  |           |  
|--------------------------------------- | ------------------------------------------------------------- | ------------------------------------------ | --------- | -------------------------- | -------- | ------------- | --------- |  | --------- | -
|                                        |                                                               |                                            |           | For the Three Months Ended
|                                        |                                                               |                                            |           |                           
|                                        |                                                               |                                            |           | June 30, 2003              |          | June 30, 2002
|                                        |                                                               |                                            |           |                            |          |              
|Net earnings                            |                                                               | $                                          | 1,513,982 |                            |          | $             | 1,315,388 | 
|Other comprehensive income, net of tax: |                                                               |                                            |           |                            |          |               |           | 
|                                        | Unrealized gains on investment
securities available for sale: |                                            |           |                            |          |               |           |  |          
|                                        |                                                               | Unrealized gains arising during the period |           |                            | 833,192  |               |           |  | 1,076,465 |  
|                                        |                                                               | Associated (taxes)                         |           |                            | (283,285 | )             |           |  | (355,234  | )
|                                        |                                                               | Reclassification adjustment for gains      |           |                            |         |               |           |  | (5,231    | )
|                                        |                                                               | Associated taxes                           |           |                            |         |               |           |  | 1,727     |  
|                                        |                                                               |                                            |           |                            |          |               |           | 
|Other comprehensive income              |                                                               |                                            | 549,907   |                            |          |               | 717,727   | 
|                                        |                                                               |                                            |           |                            |          |               |           | 
|Comprehensive income                    |                                                               | $                                          | 2,063,889 |                            |          | $             | 2,033,115 | 
|                                        |                                                               |                                            |           |                            |          |               |           | 

See accompanying notes to consolidated financial statements.

4



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WGNB CORP.

Consolidated Statements of Earnings


For the Six Months Ended June 30, 2003 and 2002
(unaudited)

|                          |                                               |                             |           |                                                     |         |                          |            |               |         |           |            | 
|------------------------- | --------------------------------------------- | --------------------------- | --------- | --------------------------------------------------- | ------- | ------------------------ | ---------- | ------------- | ------- | --------- | ---------- | 
|                          |                                               |                             |           |                                                     |         | For the Six Months Ended
|                          |                                               |                             |           |                                                     |         |                         
|                          |                                               |                             |           |                                                     |         | June 30, 2003            |            | June 30, 2002
|                          |                                               |                             |           |                                                     |         |                          |            |              
|Interest income:          |                                               |                             |           |                                                     |         |                          |            |              
|                          | Interest and fees on loans                    |                             | $         | 10,194,981                                          |         |                          | $          | 10,311,342    |        
|                          | Interest on federal funds sold                |                             |           | 123,543                                             |         |                          |            | 144,940       |        
|                          | Interest on investment securities:            |                             |           |                                                     |         |                          |            |               |        
|                          |                                               | U.S. Government agencies    |           |                                                     | 568,374 |                          |            |               | 856,067 |          
|                          |                                               | State, county and municipal |           |                                                     | 661,245 |                          |            |               | 599,711 |          
|                          |                                               | Other                       |           |                                                     | 263,571 |                          |            |               | 208,377 |          
|                          |                                               |                             |           |                                                     |         |                          |            |              
|                          |                                               |                             |           | Total interest income                               |         |                          | 11,811,714 |               |         |           | 12,120,437 | 
|                          |                                               |                             |           |                                                     |         |                          |            |              
|Interest expense:         |                                               |                             |           |                                                     |         |                          |            |              
|                          | Interest on deposits:                         |                             |           |                                                     |         |                          |            |               |        
|                          |                                               |                             | Demand    |                                                     |         | 506,640                  |            |               |         | 771,313   |           
|                          |                                               |                             | Savings   |                                                     |         | 33,188                   |            |               |         | 47,621    |           
|                          |                                               |                             | Time      |                                                     |         | 2,169,967                |            |               |         | 2,779,740 |           
|                          | Interest on FHLB and other borrowings         |                             |           | 1,217,750                                           |         |                          |            | 913,727       |        
|                          |                                               |                             |           |                                                     |         |                          |            |              
|                          |                                               |                             |           | Total interest expense                              |         |                          | 3,927,545  |               |         |           | 4,512,401  | 
|                          |                                               |                             |           |                                                     |         |                          |            |              
|                          |                                               |                             |           | Net interest income                                 |         |                          | 7,884,169  |               |         |           | 7,608,036  | 
|Provision for loan losses |                                               |                             | 150,000   |                                                     |         |                          | 150,000    |              
|                          |                                               |                             |           |                                                     |         |                          |            |              
|                          |                                               |                             |           | Net interest income after
provision for loan losses |         |                          | 7,734,169  |               |         |           | 7,458,036  | 
|                          |                                               |                             |           |                                                     |         |                          |            |              
|Other income:             |                                               |                             |           |                                                     |         |                          |            |              
|                          | Service charges on deposit accounts           |                             |           | 1,732,632                                           |         |                          |            | 1,505,737     |        
|                          | Mortgage origination fees                     |                             |           | 509,452                                             |         |                          |            | 423,863       |        
|                          | Gain on sale of securities available for sale |                             |           |                                                    |         |                          |            | 8,566         |        
|                          | Miscellaneous                                 |                             |           | 593,147                                             |         |                          |            | 415,314       |        
|                          |                                               |                             |           |                                                     |         |                          |            |              
|                          |                                               |                             |           | Total other income                                  |         |                          | 2,835,231  |               |         |           | 2,353,480  | 
|                          |                                               |                             |           |                                                     |         |                          |            |              
|Other expenses:           |                                               |                             |           |                                                     |         |                          |            |              
|                          | Salaries and employee benefits                |                             |           | 3,784,200                                           |         |                          |            | 3,544,316     |        
|                          | Occupancy                                     |                             |           | 848,636                                             |         |                          |            | 836,039       |        
|                          | Other operating                               |                             |           | 1,774,134                                           |         |                          |            | 1,600,617     |        
|                          |                                               |                             |           |                                                     |         |                          |            |              
|                          |                                               |                             |           | Total other expenses                                |         |                          | 6,406,970  |               |         |           | 5,980,972  | 
|                          |                                               |                             |           |                                                     |         |                          |            |              
|                          |                                               |                             |           | Earnings before income taxes                        |         |                          | 4,162,430  |               |         |           | 3,830,544  | 
|Income taxes              |                                               |                             | 1,293,414 |                                                     |         |                          | 1,294,312  |              
|                          |                                               |                             |           |                                                     |         |                          |            |              
|                          |                                               |                             |           | Net earnings                                        |         | $                        | 2,869,016  |               |         | $         | 2,536,232  | 
|                          |                                               |                             |           |                                                     |         |                          |            |              
|                          |                                               |                             |           | Net earnings per share                              |         | $                        | 0.87       |               |         | $         | 0.80       | 
|                          |                                               |                             |           |                                                     |         |                          |            |              
|                          |                                               |                             |           | Diluted net earnings per share                      |         | $                        | 0.86       |               |         | $         | 0.79       | 
|                          |                                               |                             |           |                                                     |         |                          |            |              
|                          |                                               |                             |           | Dividends declared per share                        |         | $                        | 0.3250     |               |         | $         | .2925      | 
|                          |                                               |                             |           |                                                     |         |                          |            |              

See accompanying notes to consolidated financial statements.

5



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WGNB CORP.

Consolidated Statements of Comprehensive Income


For the Six Months Ended June 30, 2003 and 2002
(unaudited)

|                                        |                                                               |                                            |           |                          |           |               |           |  |          |  
|--------------------------------------- | ------------------------------------------------------------- | ------------------------------------------ | --------- | ------------------------ | --------- | ------------- | --------- |  | -------- | -
|                                        |                                                               |                                            |           | For the Six Months Ended
|                                        |                                                               |                                            |           |                         
|                                        |                                                               |                                            |           | June 30, 2003            |           | June 30, 2002
|                                        |                                                               |                                            |           |                          |           |              
|Net earnings                            |                                                               | $                                          | 2,869,016 |                          |           | $             | 2,536,232 | 
|Other comprehensive income, net of tax: |                                                               |                                            |           |                          |           |               |           | 
|                                        | Unrealized gains on investment
securities available for sale: |                                            |           |                          |           |               |           |  |         
|                                        |                                                               | Unrealized gains arising during the period |           |                          | 1,044,776 |               |           |  | 938,194  |  
|                                        |                                                               | Associated taxes                           |           |                          | (355,224  | )             |           |  | (309,604 | )
|                                        |                                                               | Reclassification adjustment for gains      |           |                          |          |               |           |  | (8,566   | )
|                                        |                                                               | Associated taxes                           |           |                          |          |               |           |  | 2,827    |  
|                                        |                                                               |                                            |           |                          |           |               |           | 
|Other comprehensive income              |                                                               |                                            | 689,552   |                          |           |               | 622,851   | 
|                                        |                                                               |                                            |           |                          |           |               |           | 
|Comprehensive income                    |                                                               | $                                          | 3,558,568 |                          |           | $             | 3,159,083 | 
|                                        |                                                               |                                            |           |                          |           |               |           | 

See accompanying notes to consolidated financial statements.

6



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##### 



WGNB CORP.

Consolidated Statements of Cash Flows


For the Six Months Ended June 30, 2003 and 2002
(unaudited)

|                                                 |                                                                                     |                                               |                   |                                           |         |                          |             |               |          |          |            |  
|------------------------------------------------ | ----------------------------------------------------------------------------------- | --------------------------------------------- | ----------------- | ----------------------------------------- | ------- | ------------------------ | ----------- | ------------- | -------- | -------- | ---------- | -
|                                                 |                                                                                     |                                               |                   |                                           |         | For the Six Months Ended
|                                                 |                                                                                     |                                               |                   |                                           |         |                         
|                                                 |                                                                                     |                                               |                   |                                           |         | June 30, 2003            |             | June 30, 2002
|                                                 |                                                                                     |                                               |                   |                                           |         |                          |             |              
|Cash flows from operating activities:            |                                                                                     |                                               |                   |                                           |         |                          |             |              
|                                                 | Net earnings                                                                        |                                               | $                 | 2,869,016                                 |         |                          | $           | 2,536,232     |         
|                                                 | Adjustments to reconcile net earnings to net cash
provided by operating activities: |                                               |                   |                                           |         |                          |             |               |         
|                                                 |                                                                                     | Depreciation, amortization and accretion      |                   |                                           | 504,871 |                          |             |               | 543,494  |         
|                                                 |                                                                                     | Provision for loan losses                     |                   |                                           | 150,000 |                          |             |               | 150,000  |         
|                                                 |                                                                                     | Provision for deferred income taxes           |                   |                                           | 366,973 |                          |             |               | (298,159 | )       
|                                                 |                                                                                     | Gain on sale of securities available for sale |                   |                                           |        |                          |             |               | (8,566   | )       
|                                                 |                                                                                     | Loss on sale of other real estate             |                   |                                           |        |                          |             |               | 7,244    |         
|                                                 |                                                                                     | Gain on sale of premises and equipment        |                   |                                           | (1,920  | )                        |             |               |         |         
|                                                 |                                                                                     | Change in:                                    |                   |                                           |         |                          |             |               |          |         
|                                                 |                                                                                     |                                               | Other assets      |                                           |         | 356,109                  |             |               |          | 93,704   |           
|                                                 |                                                                                     |                                               | Other liabilities |                                           |         | (251,896                 | )           |               |          | (382,897 | )         
|                                                 |                                                                                     |                                               |                   |                                           |         |                          |             |              
|                                                 |                                                                                     |                                               |                   | Net cash provided by operating activities |         |                          | 3,993,153   |               |          |          | 2,641,052  |  
|                                                 |                                                                                     |                                               |                   |                                           |         |                          |             |              
|Cash flows from investing activities:            |                                                                                     |                                               |                   |                                           |         |                          |             |              
|                                                 | Proceeds from sales of securities available for sale                                |                                               |                   |                                          |         |                          |             | 6,368,385     |         
|                                                 | Proceeds from maturities of securities available for sale                           |                                               |                   | 9,108,972                                 |         |                          |             | 6,305,875     |         
|                                                 | Purchases of securities available for sale                                          |                                               |                   | (10,332,635                               | )       |                          |             | (12,649,813   | )       
|                                                 | Purchase of securities held to maturity                                             |                                               |                   | (500,000                                  | )       |                          |             | (1,000,000    | )       
|                                                 | Net change in loans                                                                 |                                               |                   | (13,684,110                               | )       |                          |             | (2,781,346    | )       
|                                                 | Purchases of premises and equipment                                                 |                                               |                   | (1,253,240                                | )       |                          |             | (275,172      | )       
|                                                 | Capital expenditures for other real estate                                          |                                               |                   |                                          |         |                          |             | (11,843       | )       
|                                                 | Proceeds from sales of other real estate                                            |                                               |                   |                                          |         |                          |             | 118,519       |         
|                                                 | Proceeds from sale of fixed assets                                                  |                                               |                   | 1,920                                     |         |                          |             |              |         
|                                                 |                                                                                     |                                               |                   |                                           |         |                          |             |              
|                                                 |                                                                                     |                                               |                   | Net cash used by investing activities     |         |                          | (16,659,093 | )             |          |          | (3,925,395 | )
|                                                 |                                                                                     |                                               |                   |                                           |         |                          |             |              
|Cash flows from financing activities:            |                                                                                     |                                               |                   |                                           |         |                          |             |              
|                                                 | Net change in deposits                                                              |                                               |                   | (2,079,669                                | )       |                          |             | (9,112,815    | )       
|                                                 | Repayment of other borrowings                                                       |                                               |                   |                                          |         |                          |             | (350,000      | )       
|                                                 | Dividends paid                                                                      |                                               |                   | (1,042,721                                | )       |                          |             | (853,636      | )       
|                                                 | Issuance of common stock, net                                                       |                                               |                   |                                          |         |                          |             | 4,765,654     |         
|                                                 | Exercise of stock options                                                           |                                               |                   | 46,045                                    |         |                          |             | 65,282        |         
|                                                 | Retirement of common stock                                                          |                                               |                   | (46,045                                   | )       |                          |             | (65,282       | )       
|                                                 |                                                                                     |                                               |                   |                                           |         |                          |             |              
|                                                 |                                                                                     |                                               |                   | Net cash used by financing activities     |         |                          | (3,122,390  | )             |          |          | (5,550,797 | )
|                                                 |                                                                                     |                                               |                   |                                           |         |                          |             |              
|Change in cash and cash equivalents              |                                                                                     |                                               | (15,788,330       | )                                         |         |                          | (6,835,140  | )            
|Cash and cash equivalents at beginning of period |                                                                                     |                                               | 47,667,210        |                                           |         |                          | 30,998,895  |              
|                                                 |                                                                                     |                                               |                   |                                           |         |                          |             |              
|Cash and cash equivalents at end of period       |                                                                                     | $                                             | 31,878,880        |                                           |         | $                        | 24,163,755  |              
|                                                 |                                                                                     |                                               |                   |                                           |         |                          |             |              

See accompanying notes to consolidated financial statements.

7



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##### 



WGNB CORP.

Consolidated Statements of Cash Flows, continued


For the Six Months Ended June 30, 2003 and 2002
(unaudited)

|                                                  |                                              |                                                                         |  |                          |           |               |  |   |           | 
|------------------------------------------------- | -------------------------------------------- | ----------------------------------------------------------------------- |  | ------------------------ | --------- | ------------- |  | - | --------- | 
|                                                  |                                              |                                                                         |  | For the Six Months Ended
|                                                  |                                              |                                                                         |  |                         
|                                                  |                                              |                                                                         |  | June 30, 2003            |           | June 30, 2002
|                                                  |                                              |                                                                         |  |                          |           |              
|Supplemental disclosure of cash flow information: |                                              |                                                                         |  |                          |           |               |  |  
|                                                  | Cash paid during the quarter for:            |                                                                         |  |                          |           |               |  |   |          
|                                                  |                                              | Interest                                                                |  | $                        | 3,927,545 |               |  | $ | 5,019,821 | 
|                                                  |                                              | Income taxes                                                            |  |                          | 1,132,000 |               |  |   | 1,818,950 | 
|                                                  | Non-cash investing and financing activities: |                                                                         |  |                          |           |               |  |   |          
|                                                  |                                              | Change in unrealized gains on
securities available for sale, net of tax |  |                          | 689,552   |               |  |   | 622,851   | 
|                                                  |                                              | Change in dividends payable                                             |  |                          | 33,373    |               |  |   | 84,585    | 
|                                                  |                                              | Satisfaction of other liability with issuance
of common stock           |  |                          | 28,911    |               |  |   | 23,367    | 

See accompanying notes to consolidated financial statements.

8



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##### 



WGNB Corp.

Notes to Consolidated Financial Statements


June 30, 2003
(unaudited)

(1) Basis of Presentation

The consolidated financial statements include the accounts of WGNB Corp.
(the Company) and its wholly-owned subsidiary, West Georgia National Bank
(the Bank). All significant inter-company accounts have been eliminated in
consolidation. In some cases, certain prior period amounts have been
reclassified to conform with current year presentation.

The accompanying unaudited interim consolidated financial statements reflect
all adjustments which, in the opinion of management, are necessary to present
fairly the Companys financial position as of June 30, 2003, and the results
of its operations and its cash flows for the six-month period then ended.
All such adjustments are normal and recurring in nature. The financial
statements included herein should be read in conjunction with consolidated
financial statements and the related notes and the report of independent
accountants included in the Companys filing on Form 10-K which included the
results of operations for the years ended December 31, 2002, 2001 and 2000.

Critical Accounting Policies

The Companys accounting policies are fundamental to understanding
managements discussion and analysis of results of operations and financial
condition. Some of the Companys accounting policies require significant
judgment regarding valuation of assets and liabilities and/or significant
interpretation of specific accounting guidance. A description of the
Companys significant accounting policies can be found in Note 1 of the Notes
to Consolidated Financial Statements in the Companys Annual Report to
Shareholders for the year ended December 31, 2002.

Many of the Companys assets and liabilities are recorded using various
valuation techniques that require significant judgment as to recoverability.
The collectibility of loans is reflected through the Companys estimate of
the allowance for loan losses. The Company performs periodic detailed
reviews of its loan portfolio in order to assess adequacy of the allowance
for loan losses in light of anticipated risks and loan losses. In addition,
investment securities available for sale are reflected at their estimated
fair value in the consolidated financial statements. Such amounts are based
on either quoted market prices or estimated values derived by using dealer
quotes and market comparisons.

Stock Compensation Plans

SFAS No. 123, Accounting for Stock-Based Compensation, encourages all
entities to adopt a fair value based method of accounting for employee stock
compensation plans, whereby compensation cost is measured at the grant date
based on the value of the award and is recognized over the service period,
which is usually the vesting period. However, it also allows an entity to
continue to measure compensation cost for those plans using the intrinsic
value based method of accounting prescribed by Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees, whereby
compensation cost is the excess, if any, of the quoted market price of the
stock at the grant date (or other measurement date) over the amount an
employee must pay to acquire the stock. Stock options issued under the
Companys stock option plan have no intrinsic value at the grant date, and
under Opinion No. 25 no compensation cost is recognized for them. The
Company has elected to continue with the accounting methodology in Opinion
No. 25 and, as a result, has provided proforma disclosures of net income and
earnings per share and other disclosures, as if the fair value based method
of accounting had been applied. Had compensation cost for the plan been
determined based upon the fair value of the options at the grant dates, the
Companys net earnings per share for the year to date and quarters ended June
30, 2003 and 2002 would have been reduced to the proforma amounts indicated
below:

9



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##### 



WGNB Corp.
Notes to Consolidated Financial Statements

June 30, 2003
(unaudited)

(1) Basis of Presentation, continued

|                           |  |             |  |   |           |                                     |  |      |           |  |  | 
|-------------------------- |  | ----------- |  | - | --------- | ----------------------------------- |  | ---- | --------- |  |  | 
|                           |  |             |  |   |           | For the three months ended June 30,
|                           |  |             |  |   |           |                                    
|                           |  |             |  |   |           | 2003                                |  | 2002
|                           |  |             |  |   |           |                                     |  |     
|Net earnings               |  | As reported |  | $ | 1,513,982 |                                     |  |      | 1,315,388 | 
|                           |  | Proforma    |  | $ | 1,513,982 |                                     |  |      | 1,315,388 | 
|Net earnings per share     |  | As reported |  | $ | 0.46      |                                     |  |      | 0.40      | 
|                           |  | Proforma    |  | $ | 0.46      |                                     |  |      | 0.40      | 
|Diluted earnings per share |  | As reported |  | $ | 0.45      |                                     |  |      | 0.40      | 
|                           |  | Proforma    |  | $ | 0.45      |                                     |  |      | 0.40      | 

|                           |  |             |  |   |           |                                   |  |      |           |  |  | 
|-------------------------- |  | ----------- |  | - | --------- | --------------------------------- |  | ---- | --------- |  |  | 
|                           |  |             |  |   |           | For the six months ended June 30,
|                           |  |             |  |   |           |                                  
|                           |  |             |  |   |           | 2003                              |  | 2002
|                           |  |             |  |   |           |                                   |  |     
|Net earnings               |  | As reported |  | $ | 2,869,016 |                                   |  |      | 2,536,232 | 
|                           |  | Proforma    |  | $ | 2,719,302 |                                   |  |      | 2,484,461 | 
|Net earnings per share     |  | As reported |  | $ | 0.87      |                                   |  |      | 0.80      | 
|                           |  | Proforma    |  | $ | 0.82      |                                   |  |      | 0.78      | 
|Diluted earnings per share |  | As reported |  | $ | 0.86      |                                   |  |      | 0.79      | 
|                           |  | Proforma    |  | $ | 0.81      |                                   |  |      | 0.77      | 

The fair value of each option is estimated on the date of the grant using the
Black-Scholes Model. The following weighted average assumptions were used
for grants in 2003 and 2002, respectively: dividend yield of 2.41 percent and
2.40 percent, risk free interest rates of 3.90 percent and
4.14 percent,
respectively, and an expected life of 10 years. For disclosure purposes, the
Company immediately recognized the expense associated with the option grants
assuming that all awards will vest. The compensation expense included in the
proforma results was determined based on the fair value of the option at the
time of grant multiplied by the number of options granted net of tax effect.
During the first quarter of 2003, 39,735 options were granted at an exercise
price of $24.90.

(2) Net Earnings Per Share

Basic earnings per share is based on the weighted average number of common
 shares outstanding during the period while the effects of potential common
 shares outstanding during the period are included in diluted earnings per
share. The average market price during the year is used to compute
equivalent shares.

Reconciliation of the amounts used in the computation of both basic earnings
per share and diluted earnings per share for the periods ended June 30,
2003 and June 30, 2002 are as follows:

10



---



##### 



WGNB Corp.
Notes to Consolidated Financial Statements

June 30, 2003
(unaudited)

(2) Net Earnings Per Share, continued

|                                              |  |                                     |           |               |  |           |           |  |  |          |       |  
|--------------------------------------------- |  | ----------------------------------- | --------- | ------------- |  | --------- | --------- |  |  | -------- | ----- | -
|                                              |  | For the quarter ended June 30, 2003
|                                              |  |                                    
|                                              |  |                                     |           |               |  |           |           |  |  | Earnings
|                                              |  | Net Earnings                        |           | Common Shares |  | per Share
|                                              |  |                                     |           |               |  |          
|Basic earnings per share                      |  | $                                   | 1,513,982 |               |  |           | 3,310,496 |  |  | $        | 0.46  |  
|Effect of dilutive securities  Stock Options |  |                                     |          |               |  |           | 44,237    |  |  |          | (0.01 | )
|                                              |  |                                     |           |               |  |           |           |  |  |          |       |  
|Diluted earnings per share                    |  | $                                   | 1,513,982 |               |  |           | 3,354,733 |  |  | $        | 0.45  |  
|                                              |  |                                     |           |               |  |           |           |  |  |          |       |  

|                                              |  |                                     |           |               |  |           |           |  |  |          |      | 
|--------------------------------------------- |  | ----------------------------------- | --------- | ------------- |  | --------- | --------- |  |  | -------- | ---- | 
|                                              |  | For the quarter ended June 30, 2002
|                                              |  |                                    
|                                              |  |                                     |           |               |  |           |           |  |  | Earnings
|                                              |  | Net Earnings                        |           | Common Shares |  | per Share
|                                              |  |                                     |           |               |  |          
|Basic earnings per share                      |  | $                                   | 1,315,388 |               |  |           | 3,258,381 |  |  | $        | 0.40 | 
|Effect of dilutive securities  Stock Options |  |                                     |          |               |  |           | 25,970    |  |  |          |     | 
|                                              |  |                                     |           |               |  |           |           |  |  |          |      | 
|Diluted earnings per share                    |  | $                                   | 1,315,388 |               |  |           | 3,284,351 |  |  | $        | 0.40 | 
|                                              |  |                                     |           |               |  |           |           |  |  |          |      | 

|                                              |  |                                        |           |               |  |           |           |  |  |          |       |  
|--------------------------------------------- |  | -------------------------------------- | --------- | ------------- |  | --------- | --------- |  |  | -------- | ----- | -
|                                              |  | For the six months ended June 30, 2003
|                                              |  |                                       
|                                              |  |                                        |           |               |  |           |           |  |  | Earnings
|                                              |  | Net Earnings                           |           | Common Shares |  | per Share
|                                              |  |                                        |           |               |  |          
|Basic earnings per share                      |  | $                                      | 2,869,016 |               |  |           | 3,308,905 |  |  | $        | 0.87  |  
|Effect of dilutive securities  Stock Options |  |                                        |          |               |  |           | 44,237    |  |  |          | (0.01 | )
|                                              |  |                                        |           |               |  |           |           |  |  |          |       |  
|Diluted earnings per share                    |  | $                                      | 2,869,016 |               |  |           | 3,353,142 |  |  | $        | 0.86  |  
|                                              |  |                                        |           |               |  |           |           |  |  |          |       |  

|                                              |  |                                        |           |               |  |           |           |  |  |                   |       |  
|--------------------------------------------- |  | -------------------------------------- | --------- | ------------- |  | --------- | --------- |  |  | ----------------- | ----- | -
|                                              |  | For the six months ended June 30, 2002
|                                              |  |                                       
|                                              |  |                                        |           |               |  |           |           |  |  | Earnings Earnings
|                                              |  | Net Earnings                           |           | Common Shares |  | per Share
|                                              |  |                                        |           |               |  |          
|Basic earnings per share                      |  | $                                      | 2,536,232 |               |  |           | 3,181,168 |  |  | $                 | 0.80  |  
|Effect of dilutive securities  Stock Options |  |                                        |          |               |  |           | 28,712    |  |  |                   | (0.01 | )
|                                              |  |                                        |           |               |  |           |           |  |  |                   |       |  
|Diluted earnings per share                    |  | $                                      | 2,536,232 |               |  |           | 3,209,880 |  |  | $                 | 0.79  |  
|                                              |  |                                        |           |               |  |           |           |  |  |                   |       |  

11



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##### 



Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition

The following analysis compares WGNB Corps results of operations for the
quarter and six month periods ended June 30, 2003 and 2002 and reviews the
important factors affecting WGNB Corp.s financial condition at June 30, 2003
compared to December 31, 2002. These comments should be read in conjunction
with the Companys consolidated financial statements and the accompanying notes
appearing elsewhere in this report.

Forward Looking Statements

This Report may contain certain forward-looking statements including
statements concerning plans, objectives, future events or performance and
assumptions and other statements that are not statements of historical fact.
The Company cautions readers that the following important factors, among
others, could cause the Companys actual results to differ materially from the
forward-looking statements contained in this Report: (i) the effect of changes
in laws and regulations, including federal and state banking laws and
regulations, with which the Company and its subsidiaries must comply, and the
associated costs of compliance with such laws and regulations either currently
or in the future as applicable; (ii) the effect of changes in accounting
policies and practices, as may be adopted by the regulatory agencies as well as
by the Financial Accounting Standards Board, or of changes in the Companys
organization, compensation and benefit plans; (iii) the effect on the Companys
competitive position within its market area of the increasing consolidation
within the banking and financial services industries, including the increased
competition from larger regional and out-of-state banking organizations as well
as non-bank providers of various financial services; (iv) the effect of changes
in interest rates; and (v) the effect of changes in the business cycle and
downturns in local, regional or national economies. The Company cautions that
the foregoing list of important factors is not exclusive.

Results of Operations

Overview

Net earnings for the six months ended June 30, 2003 were $2.9 million,
which represented an increase of $333 thousand, or 13.1 percent, compared to
the six months ended June 30, 2002. The net earnings per diluted common share
was $0.86, an increase of $0.07 per share, or 8.9 percent, when comparing the
same two periods due to the effect of the Companys Common Stock offering which
occurred in April 2002. Net earnings for the second quarter ended June 30,
2003 were $1.5 million compared to $1.3 million for the second quarter of 2002,
an increase of 15.1 percent. The Bank has experienced increased mortgage
origination fee income of 20.2 percent and increased other income of 20.5
percent for the first six months of 2003 compared to the same period in 2002.
Net interest income has increased 3.6 percent as the year to date net interest
margin decreased by 11 basis points comparing the first half of 2003 with that
of 2002. Total non-interest expense increased 7.1 percent comparing the same
period. Similar earnings trends would hold true in comparing the second
quarter periods June 30, 2003 and 2002.

Net Interest Income

The Companys year-to-date second quarter 2003 net interest margin
exceeded that of the same period in 2002 by $276 thousand, or 3.6 percent. The
year-to-date average yield on earning assets has declined 74 basis points, from
7.31 percent as of June 30, 2002 to 6.57 percent as of June 30, 2002. The
year-to-date average cost of funds has decreased 68 basis points during the
same time period, from 2.99 percent to 2.31 percent. The Banks cost of funds
is approaching an economic floor. Transaction account costs are decreasing as
the discount rate nears 1 percent and these rates could further decline. In
addition, the Bank has borrowings with the Federal Home Loan Bank in the amount
of $45 million with a weighted average cost of 5.46 percent. Those borrowings
have varying call dates but, given the current low rate environment, those
notes will likely not be called prior to maturity. Certificates of deposit
rates are slowly declining; however, they may have reached an economic floor.

The year-to-date average yield on loans has declined from 7.52 percent as
of June 30, 2002 compared to 6.70 percent as of June 30, 2003. The yield on
the bond portfolio has maintained an average of 5.17 percent as of June 30,
2003, which represents a decline of 34 basis points compared to 5.51 percent as
of June 30, 2002. During the same periods, the federal funds six months
average yields were 1.17 percent and 1.69 percent, respectively, for 2003 and
2002. As rates remain low, the prospect of lower loan and investment portfolio
yields is probable as some of the Banks higher yielding loans re-price at
lower current market rates. However, when the Federal Reserve Bank lowered the
discount rate to 1 percent longer term rates began to increase, perhaps
signaling more stable asset yields going forward.

12



---



##### 



Comparing the second quarter ended June 30, 2003 with that of 2002, net
interest income increased 2.3 percent, or $90 thousand. The six month rate
trends discussed above are similarly applicable to a comparison of the two
quarterly periods.

Non-Interest Income and Expense

Non-interest income for the first six months of 2003 has increased $482
thousand, or 20 percent, when compared to the first six months of 2002.
Service charges on deposit accounts have increased $227 thousand, or 15
percent, during the first six months of 2003 compared to the first six months
of 2002. This increase was due primarily to increased income from
non-sufficient funds charges. The continued decline in market interest rates
has been beneficial to the Banks ability to generate mortgage loan origination
fees. Mortgage loan origination fees for the first six months of 2003 have
outpaced the same period in 2002 by $86 thousand, or 20 percent. However,
recent increases in long-term mortgage rates will likely have an adverse effect
on mortgage fee income for the remainder of 2003. Miscellaneous income
increased by $195 thousand, or 49 percent, when comparing the first six months
of 2003 with that of 2002. Included in miscellaneous income for the first six
months of 2003 is a gain of $100 thousand on the sale of the Banks exclusive
right to an ATM at the commercial development surrounding its future permanent
Mirror Lake branch site.

Non-interest income for the second quarter ended June 30, 2003 increased
$313 thousand, or 26 percent, when compared to the second quarter ended June
30, 2002. The increase was attributable to service charges on deposit accounts
increasing $113 thousand, or 15 percent, mortgage origination fee income
increasing $67 thousand, or 33 percent, and miscellaneous income increasing
$156 thousand, or 81 percent, which included the $100 thousand gain on the sale
of an exclusive right to an ATM previously discussed. Without the gain on the
ATM right, which is non-recurring in nature, miscellaneous income would have
increased $56 thousand, or 29 percent.

Non-interest expense increased $426 thousand, or 7 percent, in the first
two quarters of 2003 compared to the same period in 2002. Salaries and employee
benefits increased $240 thousand, a 7 percent increase over the first six
months of 2002. This increase is primarily due to increased commissions for
mortgage originators, annual salary increases, increased group insurance costs
and increased profit sharing accruals. The Bank only slightly increased its
full time equivalent employee count from 141 in June of 2002 to 142 in June of
2003. Occupancy expenses increased $13 thousand, or 2 percent, year-to-date
from 2002 to 2003. Other operating expenses increased $174 thousand, or 11
percent. The increase in other operating expenses is attributable to legal and
other professional fees, including those related to compliance costs associated
with corporate governance measures implemented as a result of the
Sarbanes-Oxley Act of 2002 and the Companys Securities and Exchange Commission
filings.

Comparing non-interest expense quarter to quarter, similar increases hold
true. Total non-interest expense increased $192 thousand, or 6 percent,
comparing the second quarters ended 2003 and 2002. Salaries and benefits
accounted for $174 thousand of the increase and other operating expenses,
including legal and professional expenses, accounted for the remainder of the
increase.

Income Taxes

Income tax expense for the first six months of 2003 was $1.3 million
compared to $1.3 million for the same period in 2002. The effective tax rate
for the period ended June 30, 2003 was 31 percent compared to 34 percent for
the same period in 2002. The reduced marginal rate is due to the purchase of
federal and state tax credits.

Provision and Allowance for Loan Losses

The adequacy of the allowance for loan losses is determined through
managements informed judgment concerning the amount of risk inherent in the
Companys loan portfolio. This judgment is based on such factors as the change
in levels of non-performing and past due loans, historical loan loss
experience, borrowers financial condition, concentration of loans to specific
borrowers and industries, estimated values of underlying collateral, and
current and prospective economic conditions. The allowance for loan losses at
June 30, 2003 was $3.6 million, or 1.25 percent, of total loans compared to
$3.8 million, or 1.38 percent, of total loans at December 31, 2002. Management
believes that the allowance for loan losses is adequate to absorb possible loss
in the loan portfolio. During the first quarter of 2003, the Bank recognized
charge-offs totaling $337 thousand, for which the Bank had previously recorded
specific reserves.

13



---



##### 



Non-Performing Assets and Past Due Loans

Non-performing assets, comprised of real estate owned, non-accrual loans
and loans for which payments are more than 90 days past due, totaled $2.5
million at June 30, 2003, compared to $2.9 million at June 30, 2002.
Non-performing assets as a percentage of total loans and real estate owned at
June 30, 2003 and June 30, 2002 were 0.9 percent and 1.1 percent, respectively.

The Company has a loan review function that continually monitors selected
loans for which general economic conditions or changes within a particular
industry could cause the borrowers financial difficulties. The loan review
function also identifies loans with high degrees of credit or other risks. The
focus of loan review, as well as management, is to maintain a low level of
non-performing assets and return current non-performing assets to earning
status. Management is unaware of any known trends, events or uncertainties
that will have, or that are reasonably likely to have, a material effect on
liquidity, capital resources or operations.

Financial Condition

Overview

Total assets were $386 million at June 30, 2003, an increase of $1.2
million, or 0.3 percent, from December 31, 2002.

Assets and Funding

At June 30, 2003 earning assets totaled $363 million which represents an
increase of $5.6 million from December 31, 2002. The mix of interest earning
assets has changed slightly since the beginning of 2003. As a percentage of
interest earning assets, loans increased to 79 percent and investment
securities and federal funds decreased to 21 percent at June 30, 2003, as
compared to loans of 76 percent and investments and federal funds of 24 percent
at December 31, 2002. The primary reason for the change in the mix is a
decrease in federal funds of $13 million resulting from an increase in total
loans of $13 million.

At June 30, 2003, interest-bearing deposits decreased $3.3 million
compared to December 31, 2002. Non-interest-bearing deposits increased $1.2
million in the first six months of 2003 while certificates of deposit increased
by $1.5 million. As of December 31, 2002, transaction and savings accounts
constituted 57 percent and certificates of deposits accounted for 43 percent of
the Banks total deposits. By the end of June 2003, however, transaction and
savings accounts made up 56 percent and certificates of deposit accounted for
44 percent of total deposits. At June 30, 2003, deposits represented 85
percent of interest-bearing liabilities and other borrowings, including Federal
Home Loan Bank advances which represented 15 percent of the total.

Liquidity and Capital Resources

Net cash provided by operating activities totaled $4.0 million for the six
months ended June 30, 2003. Net cash used by investing activities totaled $16.7
million and consisted primarily of purchases of securities net of sales and
maturities of $1.7 million and a $13.7 million increase in loans outstanding.
The increases in loans and purchase of securities were funded by existing cash
on the balance sheet. Net cash used by financing activities was $3.1 million
which was a result of a decrease in total deposits of $2.1 million and
dividends paid totaling $1.0 million. The net decrease in cash and cash
equivalents as of June 30, 2003 was $15.8 million.

Total stockholders equity at June 30, 2003 was 10.62 percent of total
assets compared to 10.00 percent at December 31, 2002. The increase in the
capital percentage is attributed to the Companys increase in retained earnings
of $1.8 million and $689 thousand of increased accumulated comprehensive income
attributable to the unrealized gain on available for sale investment
securities.

At June 30, 2003, WGNB Corp. was in compliance with various regulatory
capital requirements administered by federal and state banking agencies. The
following is a table representing WGNB Corp.s consolidated Tier-1, tangible
capital, and risk-based capital.

14



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##### 



|                                          |  |               |        |   |  |        |       |          |  |        |        |   |  |        |      |   |  |   |        |  |  |  |      |  
|----------------------------------------- |  | ------------- | ------ | - |  | ------ | ----- | -------- |  | ------ | ------ | - |  | ------ | ---- | - |  | - | ------ |  |  |  | ---- | -
|                                          |  | June 30, 2003
|                                          |  |              
|                                          |  | Actual        |        |   |  |        |       | Required |  |        |        |   |  | Excess |      |   |  |  
|                                          |  | Amount        |        | % |  | Amount |       | %        |  | Amount |        | %
|                                          |  |               |        |   |  |        |       |          |  |        |        |  
|Total capital (to risk-
weighted assets)  |  | $             | 41,625 |   |  |        | 14.13 | %        |  | $      | 23,568 |   |  |        | 8.00 | % |  | $ | 18,057 |  |  |  | 6.13 | %
|Tier 1 capital (to risk-
weighted assets) |  |               | 38,035 |   |  |        | 12.91 | %        |  |        | 11,784 |   |  |        | 4.00 | % |  |   | 26,251 |  |  |  | 8.91 | %
|Tier 1 capital (to average
assets)        |  |               | 38,035 |   |  |        | 9.95  | %        |  |        | 15,295 |   |  |        | 4.00 | % |  |   | 22,740 |  |  |  | 5.95 | %

Off Balance Sheet Risks

Through the operations of the Bank, the Company has made contractual
commitments to extend credit in the ordinary course of its business activities.
These commitments are legally binding agreements to lend money to the Banks
customers at predetermined interest rates for a specified period of time. At
June 30, 2003, the Bank had issued commitments to extend credit of $43.4
million through various types of commercial lending arrangements and additional
commitments through standby letters of credit of $1.9 million. The Company
evaluates each customers credit worthiness on a case-by-case basis. The
amount of collateral obtained, if deemed necessary by the Company upon
extension of credit, is based on its credit evaluation of the borrower.
Collateral varies, but may include accounts receivable, inventory, property,
plant and equipment, commercial and residential real estate. The Company
manages the credit risk on these commitments by subjecting them to normal
underwriting and risk management processes.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of loss from adverse changes in market prices and
interest rates. The Companys market risk arises primarily from interest rate
risk inherent in its lending and deposit-taking activities. The Company has
little or no risk related to trading accounts, commodities and foreign
exchanges.

Interest rate risk, which encompasses price risk, is the exposure of a
banking organizations financial condition and earnings ability to adverse
movements in interest rates. The measurement of market risk associated with
financial instruments is meaningful only when all related and offsetting on-
and off-balance sheet transactions are aggregated, and resulting net positions
are identified. Disclosures about the fair value of financial instruments as
of December 31, 2002, which reflected changes in market prices and rates, can
be found in the Companys Annual Report to Stockholders on Form 10-K for the
year ended December 31, 2002 under section entitled Managements Discussion
and Analysis of Financial Condition and Results of Operation  Asset/Liability
Management.

Management actively monitors and manages the Companys interest rate risk
exposure. The primary objective in managing interest rate risk is to limit,
within established guidelines, the adverse impact of changes in interest rates
on the Companys net interest income and capital, while adjusting the Companys
asset-liability structure to control interest rate risk. However, a sudden and
substantial increase in interest rates may not have proportional impact on
interest sensitive assets and liabilities. Management believes that there have
been no significant changes in the Companys market risk exposure since
December 31, 2002.

Item 4. Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended (the Exchange Act)) designed to ensure that information required to
be disclosed in the reports that the Company files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the Securities and Exchange
Commission. Based upon their evaluation of those disclosure controls and
procedures, the chief executive and chief financial officers of the Company
concluded that, as of the end of the period covered by this report, the
Companys disclosure controls and procedures were adequate. In connection with
such evaluation, no change in the Companys internal control over financial
reporting occurred during the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the Companys internal
control over financial reporting.

15



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##### 



Part II  Other Information

Item 1. Legal Proceedings

There are no material, pending legal proceedings to which the Company or
any of its subsidiaries is a party or of which any of their property is the
subject.

Item 2. Changes in Securities and Use of Proceeds

(a)  Not applicable.

(b)  Not applicable.

(c)  The Company issued the following securities during the quarter ended
March 31, 2003 without registering the securities under the Securities Act,
pursuant to the exemption provided in Section 4(2) thereof, as a transaction
not involving a public offering: Options to purchase 39,735 shares of Common
Stock were granted during the first quarter of 2003 to individuals pursuant to
the Companys Incentive Stock Option Plan having a weighted average exercise
price of $24.99. These options may be exercised anytime beginning five years
from the date of grant and ending ten years from the date of grant, at which
point they expire. A total of 4,651 options were exercised in the first
quarter of 2003, at a weighted average exercise price of $9.90.

(d)  The Company has previously reported the completion of a registered
offering pursuant to which it sold 200,000 shares of its Common Stock at a
purchase price of $24.00 per share. The net proceeds from the offering (which
was completed in April 2002) of $4,765,654 have not yet been used by the
Company, but continue to be invested in a corporate bond (having a book value
of $1,135,785 as of June 30, 2003) and in federal funds.

During the second quarter of 2003, the Company declared and paid quarterly
cash dividends amounting to 16.50 cents per share. The declaration of
dividends is within the discretion of the Board of Directors and will depend,
among other things, upon business conditions, earnings, the financial condition
of the Bank and the Company, and regulatory requirements.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders

The Company held its 2003 annual meeting of shareholders on April 8, 2003.
The shareholders were asked to (1) approve the WGNB Corp. 2003 Stock Incentive
Plan (Proposal One) and (2) elect Class III directors to serve on the Companys
Board of Directors until the 2006 Annual meeting of Shareholders (Proposal
Two).

As to Proposal One, the WGNB Corp. 2003 Stock Incentive Plan (the 2003
Incentive Plan) was adopted by the Board of Directors on February 11, 2003,
subject to the approval by the Companys shareholders at the meeting. The
description of the 2003 Incentive Plan is included in the Companys Proxy
Statement. At the shareholder meeting, 2,176,570 votes were cast in favor of
the 2003 Incentive Plan and 23,820 votes were cast in opposition. There were
no Broker non-votes and 40,456 abstentions on this proposal.

As to Proposal Two, the shareholders were asked to elect L. Leighton
Alston, G. Woodfin Cole, Richard A. Duncan, Thomas E. Reeve, III, and Frank T.
Thomasson, III to serve as Class III directors on the Companys Board of
Directors, each for a three-year term. The following votes were cast for and
against the election of these Class III directors: Mr. Alston: 2,240,546
for/300 opposed; Mr. Cole: 2,239,246 for/1,600 opposed; Mr. Duncan: 2,240,846
for/0 opposed; Mr. Reeve: 2,240,846 for/0 opposed; and Mr. Thomasson:
2,238,846 for/2,000 opposed. There were no Broker non-votes or abstentions.
The following persons also continue to serve as directors: L. Richard Plunkett,
Thomas T. Richards, Oscar W. Roberts, III and Wanda W. Calhoun (all Class I
directors), and L.G. Joyner, R. David Perry, J. Thomas Vance, and Charles M.
Willis, Sr. (all Class II directors).

Item 5. Other Information

None.

16



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##### 



Item 6. Exhibits and Reports on Form 8-K



|(a) |  | The following documents are filed as part of this Report:
|--- |  | ---------------------------------------------------------

|       |  |                                                                                                                                                                                       
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1    |  | Amended and Restated Articles of Incorporation (Incorporated by
reference to Exhibit 3.1 to the Companys Registration Statement on
Form 10-SB filed June 14, 2000 (the Form 10-SB).
|       |  |                                                                                                                                                                                       
|3.2    |  | Amended and Restated Bylaws (Incorporated by reference to
Exhibit 3.2 to the Form 10-SB)                                                                                              
|       |  |                                                                                                                                                                                       
|4.1    |  | See exhibits 3.1 and 3.2 for provisions of Companys Articles
of Incorporation and Bylaws Defining the Rights of Shareholders                                                         
|       |  |                                                                                                                                                                                       
|4.2    |  | Specimen certificate representing shares of Common Stock
(Incorporated by reference to Exhibit 4.2 to the Form 10-SB)                                                                 
|       |  |                                                                                                                                                                                       
|4.3    |  | Rights Agreement dated as of February 12, 1997 between the
Company and SunTrust Bank, Atlanta (Incorporated by reference to
Exhibit 4.3 to the Form 10-SB)                            
|       |  |                                                                                                                                                                                       
|31.1   |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                    
|       |  |                                                                                                                                                                                       
|31.2   |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002                                                                                    
|       |  |                                                                                                                                                                                       
|**32.1 |  | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                    
|       |  |                                                                                                                                                                                       
|**32.2 |  | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002                                                                                    



---

|** |  | Pursuant to Commission Release No. 33-8238, this certification will be
treated as accompanying this Quarterly Report on Form 10-Q and not filed as
part of such report for purposes of Section 18 of the Exchange Act, or
otherwise subject to the liability of Section 18 of the Exchange Act and this
certification will not be deemed to be incorporated by reference into any
filing under the Securities Act of 1933, as amended, or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference.
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) |  | Reports on Form 8-K
|--- |  | -------------------

On April 8, 2003, the Company file a current report on Form 8-K to
disclose under Item 9 the issuance of its press release announcing the
Companys results of operations for the quarterly period ended March 31, 2003.

17



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##### 



SIGNATURES

In accordance with the requirements of the Securities Exchange Act of
1934, the Company has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

|                       |  |           |  |                                                      
|---------------------- |  | --------- |  | -----------------------------------------------------
|Dated: August 12, 2003 |  |           |  |                                                      
|                       |  |           |  |                                                      
|                       |  | WGNB CORP
|                       |  |           |  |                                                      
|                       |  | By:       |  | /s/ L. Leighton Alston                               
|                       |  |           |  |                                                      
|                       |  |           |  | L. Leighton Alston
President and CEO                 
|                       |  |           |  |                                                      
|                       |  | By:       |  | /s/ Steven J. Haack                                  
|                       |  |           |  |                                                      
|                       |  |           |  | Steven J. Haack
Treasurer
Principal Financial Officer

18