EXHIBIT 13.1

                          INDEX TO FINANCIAL STATEMENTS

                                                                            Page
                                                                            ----

Independent Auditor's Report . . . . . . . . . . . . . . . . . . . . . . . . F-2

Balance Sheets as of December 31, 2002 and 2001. . . . . . . . . . . . . . . F-3

Statements of Operations for the Year Ended December 31, 2002 and for
the Period from April 16, 2001 (inception) to December 31, 2001 and for
the Period from April 16, 2001 (inception) to December 31, 2002. . . . . . . F-4

Statements of Stockholder's Deficit for the Year Ended December 31, 2002
and for the Period from April 16, 2001 (inception) to December 31, 2001. . . F-5

Statements of Cash Flows for the Year Ended December 31, 2002 and for
the Period from April 16, 2001 (inception) to December 31, 2001 and
for the Period from April 16, 2001 (inception) to December 31, 2002. . . . . F-6


Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . F-7


                                      F-1
<PAGE>
                          INDEPENDENT AUDITOR'S REPORT
================================================================================


TO THE BOARD OF DIRECTORS
GENERATIONS BANCSHARES, INC.
BLAIRSVILLE, GEORGIA


          We have audited the accompanying balance sheets of GENERATIONS
BANCSHARES, INC., a development stage company, as of December 31, 2002 and 2001,
and the related statements of operations, stockholder's deficit and cash flows
for the year ended December 31, 2002 and for the period from April 16, 2001,
date of inception, to December 31, 2001 and for the period from April 16, 2001,
date of inception, to December 31, 2002. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

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

          In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Generations
Bancshares, Inc., a development stage company, as of December 31, 2002 and 2001,
and the results of its operations and its cash flows for the year ended December
31, 2002 and for the period from April 16, 2001, date of inception, to December
31, 2001 and for the period from April 16, 2001, date of inception, to December
31, 2002, in conformity with accounting principles generally accepted in the
United States of America.



                                         /s/ Mauldin & Jenkins, LLC


Atlanta, Georgia
January 14, 2003


                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                              GENERATIONS BANCSHARES, INC.
                              (A DEVELOPMENT STAGE COMPANY)

                                     BALANCE SHEETS
                               DECEMBER 31, 2002 AND 2001


                                                                    2002         2001
                                                                 -----------  ----------
<S>                                                              <C>          <C>
                                ASSETS
                                ------
Cash                                                             $      978   $   2,252
Restricted cash                                                   7,823,000           -
Furniture and equipment, net of accumulated depreciation of
    $1,803 and $586, respectively                                     6,992       7,622
Deferred stock issue costs                                          156,145           -
Other assets                                                         10,921         125
                                                                 -----------  ----------

          TOTAL ASSETS                                           $7,998,036   $   9,999
                                                                 ===========  ==========

                  LIABILITIES AND STOCKHOLDER'S DEFICIT
                  -------------------------------------

Liabilities
    Subscribers' deposits                                        $7,823,000   $       -
    Line of credit                                                  694,859     169,000
    Organizer advances                                               50,000      55,000
    Other liabilities                                                32,929           -
                                                                 -----------  ----------
          TOTAL LIABILITIES                                       8,600,788     224,000
                                                                 -----------  ----------

Commitments and contingencies

Stockholder's deficit
    Preferred stock, no par value; 2,000,000 shares authorized;
        no shares issued and outstanding                                  -           -
    Common stock, par value $1; 10,000,000 shares authorized;
        1 share issued and outstanding                                    1           1
    Capital surplus                                                   4,012       1,814
    Accumulated deficit                                            (606,765)   (215,816)
                                                                 -----------  ----------

          TOTAL STOCKHOLDER'S DEFICIT                              (602,752)   (214,001)
                                                                 -----------  ----------

          TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT            $7,998,036   $   9,999
                                                                 ===========  ==========
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.


                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                              GENERATIONS BANCSHARES, INC.
                             (A DEVELOPMENT STAGE COMPANY)

                                STATEMENTS OF OPERATIONS
                    YEAR ENDED DECEMBER 31, 2002 AND FOR THE PERIOD
          FROM APRIL 16, 2001, DATE OF INCEPTION, TO DECEMBER 31, 2001 AND FOR
        THE PERIOD FROM APRIL 16, 2001, DATE OF INCEPTION, TO DECEMBER 31, 2002

                                                    Period from April  Period from April
                                                           16,                16,
                                                     2001, date  of     2001, date  of
                                       Year Ended      inception ,       inception ,
                                      December 31,   to December 31,   to December 31,
                                          2002             2001              2002
                                      -------------------------------------------------
<S>                                   <C>            <C>               <C>
EXPENSES
    Salaries and employee benefits    $     243,252  $         89,000  $        332,252
    Interest                                 16,844             3,950            20,794
    Equipment and occupancy expenses         73,052            17,669            90,721
    Professional and consulting fees         15,905            73,158            89,063
    Filing and application fees               4,364            12,070            16,434
    Office expenses                          24,880             9,269            34,149
    Other operating expenses                 12,652            10,700            23,352
                                      -------------  ----------------  ----------------
          NET LOSS                    $     390,949  $        215,816  $        606,765
                                      =============  ================  ================
</TABLE>


SEE NOTES TO FINANCIAL STATEMENTS.


                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                                  GENERATIONS BANCSHARES, INC.
                                  (A DEVELOPMENT STAGE COMPANY)

                               STATEMENTS OF STOCKHOLDER'S DEFICIT
                         YEAR ENDED DECEMBER 31, 2002 AND FOR THE PERIOD
                   FROM APRIL 16, 2001, DATE OF INCEPTION TO DECEMBER 31, 2001

                                               COMMON STOCK                              TOTAL
                                            ------------------  CAPITAL  ACCUMULATED STOCKHOLDER'S
                                            SHARES  PAR VALUE   SURPLUS    DEFICIT      DEFICIT
                                            ------  ----------  --------  ----------  ----------
<S>                                         <C>     <C>         <C>       <C>         <C>
BALANCE, APRIL 16, 2001, DATE OF INCEPTION       -  $        -  $      -  $       -   $       -
    Net loss                                     -           -         -   (215,816)   (215,816)
    Imputed interest costs                       -           -     1,805          -       1,805
    Issuance of common stock                     1           1         9          -          10
                                            ------  ----------  --------  ----------  ----------
BALANCE, DECEMBER 31, 2001                       1           1     1,814   (215,816)   (214,001)
    Net loss                                     -           -         -   (390,949)   (390,949)
    Imputed interest costs                       -           -     2,198          -       2,198
                                            ------  ----------  --------  ----------  ----------
BALANCE, DECEMBER 31, 2002                       1  $        1  $  4,012  $(606,765)  $(602,752)
                                            ======  ==========  ========  ==========  ==========
</TABLE>


SEE NOTES TO FINANCIAL STATEMENTS.


                                      F-5
<PAGE>
<TABLE>
<CAPTION>
                                               GENERATIONS BANCSHARES, INC.
                                               (A DEVELOPMENT STAGE COMPANY)

                                                  STATEMENTS OF CASH FLOWS
                                      YEAR ENDED DECEMBER 31, 2002 AND FOR THE PERIOD
                           FROM APRIL 16, 2001, DATE OF INCEPTION, TO DECEMBER 31, 2001 AND FOR
                          THE PERIOD FROM APRIL 16, 2001, DATE OF INCEPTION, TO DECEMBER 31, 2002

                                                                             Period from April 16,  Period from April 16,
                                                                                                        2001, date of
                                                           Year Ended      2001, date of inception ,      inception ,
                                                        December 31, 2002    to December 31, 2001    to December 31, 2002
                                                       -------------------------------------------------------------------
<S>                                                    <C>                  <C>                     <C>
OPERATING ACTIVITIES
    Net loss                                           $         (390,949)  $            (215,816)  $            (606,765)
    Adjustments to reconcile net loss to net cash
        used in operating activities:
        Depreciation                                                1,217                     586                   1,803
        Imputed interest costs                                      2,198                   1,805                   4,003
        Net other operating activities                             22,133                    (125)                 22,008
                                                       -------------------  ----------------------  ----------------------

            Net cash used in operating activities                (365,401)               (213,550)               (578,951)
                                                       -------------------  ----------------------  ----------------------

INVESTING ACTIVITIES
    Purchase of furniture and equipment                              (587)                 (8,208)                 (8,795)
                                                       -------------------  ----------------------  ----------------------

            Net cash used in investing activities                    (587)                 (8,208)                 (8,795)
                                                       -------------------  ----------------------  ----------------------

FINANCING ACTIVITIES
    Increase in line of credit                                    525,859                 169,000                 694,859
    Increase (decrease) in organizer advances                      (5,000)                 55,000                  50,000
    Proceeds from issuance of common stock                              -                      10                      10
    Deferred stock issue costs                                   (156,145)                      -                (156,145)
                                                       -------------------  ----------------------  ----------------------

            Net cash provided by financing activities             364,714                 224,010                 588,724
                                                       -------------------  ----------------------  ----------------------

Net increase (decrease) in cash                                    (1,274)                  2,252                     978

Cash at beginning of period                                         2,252                       -                       -
                                                       -------------------  ----------------------  ----------------------

Cash at end of year                                    $              978   $               2,252   $                 978
                                                       ===================  ======================  ======================

SUPPLEMENTAL DISCLOSURES
    Cash paid for:
      Interest                                         $           11,454   $               2,145   $              13,599

NONCASH TRANSACTION
    Stock subscription proceeds held in escrow         $        7,823,000   $                   -   $           7,823,000
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.


                                      F-6
<PAGE>
                          GENERATIONS BANCSHARES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS


NOTE 1.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
          POLICIES

          ORGANIZATION

            Generations Bancshares, Inc. (the "Company") was incorporated on
            October 1, 2001, to operate as a bank holding company pursuant to
            the Federal Bank Holding Company Act of 1956, as amended, and the
            Georgia Bank Holding Company Act. The Company intends to acquire
            100% of the issued and outstanding capital stock of Generations Bank
            (In Organization) (the "Bank"), a corporation being organized under
            the laws of the State of Georgia to conduct a general banking
            business in Blairsville, Georgia. The organizers filed applications
            for approval of the organization of the Bank with the Georgia
            Department of Banking and Finance ("DBF") and also with the Federal
            Deposit Insurance Corporation ("FDIC") for insurance of the Bank's
            deposits. In addition, the Company has filed applications with the
            Federal Reserve Bank of Atlanta (the "FRB") and the DBF to become a
            bank holding company. Upon obtaining approval, the Company will be a
            registered bank holding company subject to regulation by the FRB and
            DBF.

            The Company is a development stage enterprise as defined by
            Statement of Financial Accounting Standards No. 7, Accounting and
            Reporting by Development Stage Enterprises, as it devotes
            substantially all its efforts to establishing a new business.

            Activities since inception have consisted primarily of the Company's
            organizers engaging in organizational and preopening activities
            necessary to obtain regulatory approvals and to prepare to commence
            business as a financial institution. The Bank expects to commence
            operations on January 27, 2003.

          SIGNIFICANT ACCOUNTING POLICIES

            BASIS OF PRESENTATION

                  The financial statements have been prepared on the accrual
                  basis in accordance with accounting principles generally
                  accepted in the United States of America.

            ORGANIZATION AND STOCK OFFERING COSTS

                  Organization costs have been expensed as incurred in
                  accordance with generally accepted accounting principles.
                  Stock offering costs will be charged to capital surplus upon
                  completion of the Company's stock offering. Additional costs
                  are expected to be incurred for organization costs and stock
                  offering costs.


                                      F-7
<PAGE>
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
          POLICIES (CONTINUED)

          SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

            FURNITURE AND EQUIPMENT

               Furniture and equipment is stated at cost less accumulated
               depreciation. Depreciation is computed by the straight-line
               method over the estimated useful lives of the assets, which is
               principally 7 years.

            INCOME TAXES

               The Company will be subject to Federal and state income taxes
               when taxable income is generated. No income tax benefits have
               been accrued in the statement of operations due to offsetting
               valuation allowances against the related deferred tax assets.
               Deferred tax assets at December 31, 2002 and 2001 consist
               entirely of preopening and organization expenses. The total
               amount of the valuation allowance recorded against these deferred
               tax assets as of December 31, 2002 and 2001 is $225,757 and
               $80,768, respectively.

            STOCK COMPENSATION PLANS

               Statement of Financial Accounting Standards ("SFAS") No. 123,
               Accounting for Stock-Based Compensation, encourages all entities
               to adopt a fair value based method of accounting for employee
               stock compensation plans, whereby compensation cost is measured
               at the grant date based on the value of the award and is
               recognized over the service period, which is usually the vesting
               period. However, it also allows an entity to 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. The
               Company will employ the accounting methodology in Opinion No. 25
               for organizer stock warrants and the Company's stock option plan.

               All organizer stock warrants will be issued to organizers who are
               either directors or employees of the Company or its proposed
               subsidiary. Thus, under the definition of employee in FASB
               Interpretation No. 44, Accounting for Certain Transactions
               involving Stock-Based Compensation, organizer stock warrants will
               qualify for the accounting methodology in Opinion No. 25.

            LOSS PER SHARE

               One share of common stock was outstanding during the periods
               ended December 31, 2002 and 2001, therefore, basic losses per
               share is equal to net losses reported in the accompanying
               statement of operations.


                                      F-8
<PAGE>
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
          POLICIES  (CONTINUED)

          SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

            RECENT ACCOUNTING STANDARDS

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

NOTE 2.   LINE OF CREDIT

          To facilitate the formation of the Company and the Bank, the
          organizers have established a $700,000 line of credit with an
          independent bank for the purpose of paying organization and preopening
          expenses for the Company and the Bank and the expenses of the
          Company's common stock offering. The line of credit bears interest at
          the lender's prime rate less 0.50%, which was equal to 3.75% at
          December 31, 2002. Interest is payable monthly, and the principal is
          due at maturity on June 10, 2003. The outstanding principal balance at
          December 31, 2002 and 2001 was $694,859 and $169,000, respectively.
          The organizers personally guaranteed repayment of the line of credit.
          The line of credit was repaid on January 7, 2003 upon release of the
          Company's stock subscription proceeds from escrow.


NOTE 3.   ORGANIZER ADVANCES

          The organizers advanced the Company $55,000 for the purpose of paying
          organization expenses for the Company and the Bank. The advances are
          non-interest bearing, however, interest is being imputed on the
          outstanding advances at a rate of prime less .50% until the offering
          is completed. Total imputed interest was $4,003 and $1,805 as of
          December 31, 2002 and 2001, respectively, and is included in the
          accompanying statement of operations. The organizer advances were
          repaid upon release of stock subscription proceeds from escrow.

NOTE 4.   COMMITMENTS AND CONTINGENCIES

          The Company is leasing the land for the proposed site of the Bank. The
          term of the ground lease will be for 30 years at an initial monthly
          rental of $3,500 that will increase annually with the Consumer Price
          Index.


                                      F-9
<PAGE>
                          NOTES TO FINANCIAL STATEMENTS

NOTE 4.   COMMITMENTS AND CONTINGENCIES (CONTINUED)

          In addition, upon commencement of operations, the Bank will lease
          substantially all of its furniture, fixtures and equipment from a
          third party for 36 month lease terms. The Bank will have the option of
          renewing the leases for an additional 24 months.

          For the years ended December 31, 2002 and 2001, the Company has
          expensed $69,126 and $10,800, respectively, in the accompanying
          statements of operations related to all leases. The Company accounts
          for all leases as operating leases.

          The Company has entered into employment agreements with its chief
          executive officer, president and chief financial officer for initial
          terms of three years. The agreements provide for a base salary,
          incentive compensation, incentive stock options and other perquisites
          commensurate with their employment.

          CONTINGENCIES

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

NOTE 5.   COMMON STOCK OFFERING

          The Company filed a Registration Statement with the Securities and
          Exchange Commission to register for sale a minimum of 770,000 and a
          maximum of 1,000,000 shares of the Company's $1 par value per share
          common stock at $10.00 per share. The registration statement became
          effective on June 27, 2002. The Company will capitalize the Bank with
          $8,250,000 to meet regulatory conditions for approval of the Bank's
          charter.

          Restricted cash and subscribers' deposits in the accompanying balance
          sheet consist of proceeds from the Company's stock offering. The funds
          are being held in escrow until the minimum amount of capital has been
          raised to receive regulatory approval of the Bank's charter. As of
          December 31, 2002, proceeds from the sale of 782,300 shares of common
          stock had been deposited with the escrow agent. The funds were
          released by the escrow agent to the Company on January 6, 2003.

          Each organizer will be granted one warrant to purchase common stock
          for each share subscribed to in the offering. However, in no event
          will the number of outstanding stock warrants exceed 250,000. The
          warrants will be exercisable over ten years and will be granted at $10
          per share. The warrants will vest in one-third annual increments
          beginning on the first anniversary of the date the Company first
          issues its common stock.

          Additionally, the Company will sponsor a stock option plan for the
          purpose of granting stock options to organizers, directors, officers
          and employees of the Company and the Bank. The Plan will grant
          incentive stock options and non-qualified stock options depending on
          the eligibility of the participant. The number of options in the plan
          will be equal to 15% of the number of shares sold in the stock
          offering and the term of the stock options will not exceed ten years
          from the date of grant. A Board appointed committee that will have the
          authority to grant stock option awards under the Plan will administer
          the plan and determine the terms of each award. In no event will a
          stock option be granted at a price less than fair market value on the
          date of grant.


                                      F-10
<PAGE>
                          NOTES TO FINANCIAL STATEMENTS


NOTE 6.   FAIR VALUE OF FINANCIAL INSTRUMENTS

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

          The Company's financial instruments as of December 31, 2002 consist of
          cash, the line of credit and organizer advances. The carrying amounts
          of these financial instruments approximate fair values.


                                      F-11
<PAGE>