EXHIBIT 13.1


                          GENERATIONS BANCSHARES, INC.


                        CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2003

                 (WITH INDEPENDENT ACCOUNTANTS' REPORT THEREON)


<PAGE>
                          GENERATIONS BANCSHARES, INC.
                                 AND SUBSIDIARY

                          CONSOLIDATED FINANCIAL REPORT

                                DECEMBER 31, 2003


<PAGE>
                                TABLE OF CONTENTS
                                -----------------


                                                                            PAGE
                                                                            ----

INDEPENDENT AUDITOR'S REPORT . . . . . . . . . . . . . . . . . . . . . . . . . 1

FINANCIAL  STATEMENTS

     CONSOLIDATED BALANCE SHEETS . . . . . . . . . . . . . . . . . . . . . . . 2
     CONSOLIDATED STATEMENTS OF OPERATIONS . . . . . . . . . . . . . . . . . . 3
     CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS . . . . . . . . . . . . . . 4
     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) . . . . . . . . 5
     CONSOLIDATED STATEMENTS OF CASH FLOWS . . . . . . . . . . . . . . . . . . 6
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. . . . . . . . . . . . . . .7-22


<PAGE>
                          INDEPENDENT AUDITOR'S REPORT


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


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


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


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


                                                   /s/ Mauldin & Jenkins, LLC

Atlanta, Georgia
February 20, 2004


<PAGE>
<TABLE>
<CAPTION>
                                GENERATIONS BANCSHARES, INC.
                                       AND SUBSIDIARY

                                CONSOLIDATED BALANCE SHEETS
                                 DECEMBER 31, 2003 AND 2002

                            ASSETS                                   2003          2002
                           --------                             -------------  ------------
<S>                                                             <C>            <C>
Cash and due from banks                                           $ 1,103,325   $      978
Restricted cash                                                             -    7,823,000
Federal funds sold                                                  7,316,000            -
Securities available for sale, at fair value                        7,744,671            -

Loans , net of unearned loan fees                                  19,569,837            -
Less allowance for loan losses                                        271,000            -
                                                                -------------  ------------
          Loans, net                                               19,298,837            -

Premises and equipment                                              2,181,663        6,992
Other assets                                                          177,945      167,066
                                                                -------------  ------------

          TOTAL ASSETS                                            $37,822,441   $7,998,036
                                                                =============  ============

        LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
       ------------------------------------------------

Deposits
    Noninterest-bearing                                           $ 1,204,313   $        -
    Interest-bearing                                               29,301,392            -
                                                                -------------  ------------
           Total deposits                                          30,505,705            -
Subscribers' deposits                                                       -    7,823,000
Other borrowings                                                            -      744,859
Other liabilities                                                     154,920       32,929
                                                                -------------  ------------
          TOTAL LIABILITIES                                        30,660,625    8,600,788
                                                                -------------  ------------

Commitments and contingencies

Stockholders' equity
    Preferred stock, no par value, 2,000,000 shares authorized;
        no shares issued and outstanding
    Common stock, $1 par value, 10,000,000 shares authorized;
        913,834 and 1 shares issued and outstanding                   913,834            1
    Capital surplus                                                 8,053,558        4,012
    Accumulated deficit                                            (1,798,759)    (606,765)
    Accumulated other comprehensive loss                               (6,817)           -
                                                                -------------  ------------

          TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                      7,161,816     (602,752)
                                                                -------------  ------------

          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)    $37,822,441   $7,998,036
                                                                =============  ============

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
                                   GENERATIONS BANCSHARES, INC.
                                          AND SUBSIDIARY

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

                                                                              2003         2002
                                                                          ------------  ----------
<S>                                                                       <C>           <C>
INTEREST INCOME
    Loans, including fees                                                 $   787,591   $       -
    Taxable securities                                                         93,345           -
    Federal funds sold                                                         94,527           -
    Interest bearing deposits in banks                                         18,672           -
                                                                          ------------  ----------
          TOTAL INTEREST INCOME                                               994,135           -
                                                                          ------------  ----------

INTEREST EXPENSE
    Deposits                                                                  479,606           -
    Other borrowings                                                              421      16,844
                                                                          ------------  ----------
          TOTAL INTEREST EXPENSE                                              480,027      16,844
                                                                          ------------  ----------

          NET INTEREST INCOME (EXPENSE)                                       514,108     (16,844)
PROVISION FOR LOAN LOSSES                                                     271,000           -
                                                                          ------------  ----------
          NET INTEREST INCOME (EXPENSE) AFTER PROVISION FOR LOAN LOSSES       243,108     (16,844)
                                                                          ------------  ----------

OTHER INCOME
    Service charges on deposit accounts                                        22,231           -
    Other operating income                                                      8,314           -
                                                                          ------------  ----------
          TOTAL OTHER INCOME                                                   30,545           -
                                                                          ------------  ----------

OTHER EXPENSES
    Salaries and employee benefits                                            706,779     243,252
    Equipment and occupancy expenses                                          178,438      73,052
    Other operating expenses                                                  580,430      57,801
                                                                          ------------  ----------
          TOTAL OTHER EXPENSES                                              1,465,647     374,105
                                                                          ------------  ----------

          LOSS BEFORE INCOME TAXES                                         (1,191,994)   (390,949)

INCOME TAXES                                                                        -           -
                                                                          ------------  ----------

          NET LOSS                                                        $(1,191,994)  $(390,949)
                                                                          ============  ==========

BASIC AND DILUTED LOSSES PER SHARE                                        $     (1.30)  $   (0.43)
                                                                          ============  ==========

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>
                                GENERATIONS BANCSHARES, INC.
                                       AND SUBSIDIARY

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

                                                                        2003         2002
                                                                    ------------  ----------
<S>                                                                 <C>           <C>
NET LOSS                                                            $(1,191,994)  $(390,949)
                                                                    ------------  ----------

OTHER COMPREHENSIVE LOSS:

        Unrealized holding losses on securities available for sale
            arising during period                                        (6,817)          -
                                                                    ------------  ----------

COMPREHENSIVE LOSS                                                  $(1,198,811)  $(390,949)
                                                                    ============  ==========

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>


                                        4
<PAGE>
<TABLE>
<CAPTION>
                                             GENERATIONS BANCSHARES, INC.
                                                    AND SUBSIDIARY

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

                                                                                     ACCUMULATED
                                                                                       OTHER              TOTAL
                                    COMMON STOCK         CAPITAL     ACCUMULATED    COMPREHENSIVE      STOCKHOLDERS'
                              -----------------------
                                SHARES     PAR VALUE     SURPLUS       DEFICIT          LOSS         EQUITY (DEFICIT)
                              -----------  ----------  -----------  -------------  ---------------  -----------------
<S>                           <C>          <C>         <C>          <C>            <C>              <C>
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)
    Net loss                            -           -           -     (1,191,994)               -         (1,191,994)
    Sale of common stock          913,833     913,833   8,224,497              -                -          9,138,330
    Stock issue costs                   -           -    (174,951)             -                -           (174,951)
    Other comprehensive loss            -           -           -              -           (6,817)            (6,817)
                              -----------  ----------  -----------  -------------  ---------------  -----------------
BALANCE, DECEMBER 31, 2003        913,834  $  913,834  $8,053,558   $ (1,798,759)  $       (6,817)  $      7,161,816
                              ===========  ==========  ===========  =============  ===============  =================


<FN>
SEE  NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS.
</TABLE>


                                        5
<PAGE>
<TABLE>
<CAPTION>
                              GENERATIONS BANCSHARES, INC.
                                     AND SUBSIDIARY

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

                                                                   2003          2002
                                                             ---------------  ----------
<S>                                                            <C>            <C>
OPERATING ACTIVITIES
    Net loss                                                   $ (1,191,994)  $(390,949)
    Adjustments to reconcile net loss to net cash
        used in operating activities:
        Depreciation and amortization                                13,520       1,217
        Provision for loan losses                                   271,000           -
        Increase in interest receivable                            (141,584)          -
        Increase in interest payable                                 72,567           -
        Net other operating activities                               23,984      24,331
                                                             ---------------  ----------

              Net cash used in operating activities                (952,507)   (365,401)
                                                             ---------------  ----------

INVESTING ACTIVITIES
    Purchases of securities available for sale                 (10,039,859)          -
    Proceeds from maturities of securities available for sale     2,288,371           -
    Net increase in federal funds sold                           (7,316,000)          -
    Net increase in loans                                       (19,569,837)          -
    Purchase of premises and equipment                           (2,188,191)       (587)
                                                             ---------------  ----------

            Net cash used in investing activities               (36,825,516)       (587)
                                                             ---------------  ----------

FINANCING ACTIVITIES
    Net increase in deposits                                     30,505,705           -
    Proceeds from sale of common stock                            9,138,330           -
    Stock issue costs                                               (18,806)   (156,145)
    Proceeds from other borrowings                                    4,500     525,859
    Repayment of other borrowings                                  (699,359)          -
    Repayment of organizer advances                                 (50,000)     (5,000)
                                                             ---------------  ----------

            Net cash provided by financing activities            38,880,370     364,714
                                                             ---------------  ----------

Net increase (decrease) in cash and due from banks                1,102,347      (1,274)

Cash and due from banks at beginning of year                            978       2,252
                                                             ---------------  ----------

Cash and due from banks at end of year                         $  1,103,325   $     978
                                                             ===============  ==========
SUPPLEMENTAL DISCLOSURE
    Cash paid during the year for:
        Interest                                               $    407,460   $  11,454

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>


                                        6
<PAGE>
                          GENERATIONS BANCSHARES, INC.
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

         NATURE  OF  BUSINESS

          Generations Bancshares, Inc. (the "Company") is a bank holding company
          whose  business  is  conducted  by  its  wholly-owned  subsidiary,
          Generations  Bank  (the "Bank"). The Bank is a commercial bank located
          in  Blairsville, Union County, Georgia. The Bank provides a full range
          of banking services in its primary market area of Union County and the
          surrounding  counties.  The  Bank  commenced its banking operations on
          January 27, 2003. Prior to the commencement of banking operations, the
          Company's activities consisted of organization activities and the sale
          of  stock.

         BASIS OF PRESENTATION AND ACCOUNTING ESTIMATES

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

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

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

         CASH, DUE FROM BANKS AND CASH FLOWS

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

         RESTRICTED  CASH

          As  of December 31, 2002, restricted cash and subscribers' deposits in
          the  accompanying  consolidated  balance  sheets consisted of proceeds
          from the Company's stock offering. The funds were held in escrow until
          the  minimum  amount  of capital had 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  stock  subscription  funds  were  released to the
          Company  by  the  escrow  agent  on  January  6,  2003.


                                        7
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

         SECURITIES

          All  securities  are  classified as available for sale and recorded at
          fair value with unrealized gains and losses excluded from earnings and
          reported  in  accumulated  other  comprehensive  loss.

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

         LOANS

          Loans  are  reported  at  their  outstanding  principal  balances less
          deferred  loan fees and the allowance for loan losses. Interest income
          is  accrued  on  the outstanding principal balance. Nonrefundable loan
          fees,  net of direct loan origination costs, are deferred with the net
          amount  recognized  into  interest  income  over the life of the loans
          using  a  method  which  approximates  a  level  yield.

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

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

         ALLOWANCE  FOR  LOAN  LOSSES

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


                                        8
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

         ALLOWANCE  FOR  LOAN  LOSSES  (CONTINUED)

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

         PREMISES  AND  EQUIPMENT

          Premises  and  equipment  are  stated  at  cost  less  accumulated
          depreciation.  Depreciation  is  computed  primarily  using  the
          straight-line  method  over  the estimated useful lives of the assets.
          The  range  of  estimated  useful lives for premises and equipment are
          generally  as  follows:

                        Land  improvements                   15 years
                        Buildings                       39 - 40 years
                        Furniture and equipment           3 - 7 years

         INCOME  TAXES

          Deferred  income  tax  assets and liabilities are determined using the
          balance sheet method. Under this method, the net deferred tax asset or
          liability  is  determined  based  on  the tax effects of the temporary
          differences  between  the  book  and  tax bases of the various balance
          sheet  assets and liabilities and gives current recognition to changes
          in  tax  rates  and  laws. A valuation allowance is recorded for those
          deferred  tax  items  for  which  it  is  more  likely  than  not that
          realization  will  not  occur  in  the  near  term.


         LOSSES  PER  SHARE

          Basic  and  diluted losses per share are computed by dividing net loss
          by  the weighted average number of shares of common stock outstanding.
          The  weighted  average number of shares outstanding for the year ended
          December  31,  2003  was  equal  to  the  number of shares sold in the
          Company's initial stock offering, or 913,834. Losses per share for the
          year  ended December 31, 2002 are also based upon the number of shares
          sold  in  the Company's initial stock offering. There were no dilutive
          common  stock  equivalents  as  of  December  31,  2003.  Common stock
          equivalents  consist  of  stock  options  and  stock  warrants.


                                        9
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

         STOCK-BASED  COMPENSATION

          At  December  31,  2003,  the Company has two stock-based compensation
          plans,  which are described more fully in Note 7. The Company accounts
          for  those  plans  under the recognition and measurement principles of
          APB  Opinion  No.  25,  Accounting  for Stock Issued to Employees, and
          related Interpretations. No stock-based compensation cost is reflected
          in net loss, as all options and warrants granted under those plans had
          an exercise price equal to the market value of the underlying stock on
          the  date of grant. The effect on net loss and losses per share if the
          Company  had  applied  the  fair  value recognition provisions of SFAS
          Statement  No.  123,  Accounting  for  Stock-Based  Compensation,  to
          stock-based  compensation  is  not presented as no options or warrants
          vested  during  the  years  ended  December  31,  2003  or  2002.

         COMPREHENSIVE  LOSS

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

         RECENT  ACCOUNTING  STANDARDS

          In  November  2002,  the  Financial  Accounting Standards Board (FASB)
          issued  Interpretation  No. 45, "Guarantor's Accounting and Disclosure
          Requirements  for  Guarantees,  Including  Indirect  Guarantees  of
          Indebtedness  of  Others,  an interpretation of FASB Statements No. 5,
          57,  and  107  and  a  rescission  of FASB Interpretation No. 34". The
          interpretation elaborates on the disclosures to be made by a guarantor
          in  its  interim and annual financial statements about its obligations
          under  guarantees  issued.  It  also  clarifies  that  a  guarantor is
          required  to  recognize,  at inception of a guarantee, a liability for
          the  fair  value  of the obligation undertaken in issuing a guarantee.
          The  initial  recognition  and  initial  measurement provisions of the
          interpretation  are  applicable to guarantees issued or modified after
          December  31,  2002. The disclosure requirements in the interpretation
          are  effective  for  financial statements of interim or annual periods
          ending after December 15, 2002. The adoption of the interpretation did
          not  have  a  material  effect on the Company's financial condition or
          results  of  operations.

          In  December  2002, the FASB issued Statement No. 148, "Accounting for
          Stock-Based  Compensation - Transition and Disclosure, an amendment of
          FASB  Statement  No.  123".  The  Statement  amends Statement No. 123,
          "Accounting  for  Stock-Based  Compensation",  to  provide alternative
          methods  of transition for a voluntary change to the fair value method
          of  accounting for stock-based employee compensation. In addition, the
          statement  amends  the disclosure requirements of Statement No. 123 to
          require  prominent  disclosures  in  both annual and interim financial
          statements about the method of accounting for stock-based compensation
          and  the  effect  on  reported  results  of operations. The disclosure
          requirements  of  the  statement  are required for fiscal years ending
          after  December  15, 2002 and interim periods beginning after December
          15, 2002. The Company has not adopted Statement No. 123 for accounting
          for  stock-based  compensation  as  of  December  31,  2003.


                                       10
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

         RECENT  ACCOUNTING  STANDARDS  (CONTINUED)

          In January 2003, the FASB issued Interpretation No. 46, "Consolidation
          of  Variable  Interest Entities, an interpretation of ARB No. 51", and
          on  December  24,  2003,  the  FASB  issued FASB Interpretation No. 46
          (Revised December 2003), "Consolidation of Variable Interest Entities"
          which  replaced  FIN 46. The interpretation addresses consolidation by
          business  enterprises  of  variable  interest  entities.  A  variable
          interest  entity  is  defined  as  an  entity subject to consolidation
          according  to  the  provisions  of  the  interpretation.  The  revised
          interpretation  provided for special effective dates for entities that
          had  fully  or  partially  applied  the  original interpretation as of
          December  24,  2003.  Otherwise,  application of the interpretation is
          required  in  financial  statements  of  public  entities  that  have
          interests  in  special-purpose  entities,  or SPEs, for periods ending
          after  December  15,  2003. Application by public entities, other than
          small  business  issuers,  for  all  other  types of variable interest
          entities  (i.e.,  non-SPEs)  is  required  in financial statements for
          periods  ending  after  March  15, 2004. Application by small business
          issuers to variable interest entities other than SPEs and by nonpublic
          entities  to  all  types  of variable interest entities is required at
          various  dates  in  2004  and 2005. The interpretations have not had a
          material  effect  on  the  Company's financial condition or results of
          operations.

          In  May  2003,  the  FASB  issued  Statement  No. 150, "Accounting for
          Certain Financial Instruments with Characteristics of both Liabilities
          and  Equity".  The  statement  establishes standards for how an issuer
          classifies  and  measures  certain  financial  instruments  with
          characteristics of both liabilities and equity. The statement requires
          that  an  issuer  classify  a  financial instrument that is within its
          scope  as  a  liability.  Many  of  those  instruments were previously
          classified  as  equity.  The  statement  is  effective  for  financial
          instruments entered into or modified after May 31, 2003, and otherwise
          is  effective  at  the beginning of the first interim period beginning
          after  June  15,  2003,  except  for  mandatorily redeemable financial
          instruments  of  nonpublic entities. The adoption of the statement did
          not  have  a  material effect on the Company's financial conditions or
          results  of  operations.

NOTE 2.  SECURITIES

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

<TABLE>
<CAPTION>
                                           GROSS        GROSS
                            AMORTIZED   UNREALIZED    UNREALIZED      FAIR
                               COST        GAINS        LOSSES       VALUE
                            ----------  -----------  ------------  ----------
<S>                         <C>         <C>          <C>           <C>
DECEMBER 31, 2003:
U. S. GOVERNMENT AND
  AGENCY SECURITIES         $7,009,078  $     9,671  $   (12,059)  $7,006,690
MORTGAGE-BACKED SECURITIES     742,410            -       (4,429)     737,981
                            ----------  -----------  ------------  ----------
                            $7,751,488  $     9,671  $   (16,488)  $7,744,671
                            ==========  ===========  ============  ==========
</TABLE>

          Securities with a carrying value of $101,844 at December 31, 2003 were
          pledged  to  secure public deposits and for other purposes as required
          or  permitted  by  law.


                                       11
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2.  SECURITIES  (CONTINUED)

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

<TABLE>
<CAPTION>
                             AMORTIZED     FAIR
                               COST       VALUE
                            ----------  ----------
<S>                         <C>         <C>
Due from one to five years  $7,009,078  $7,006,690
Mortgage-backed securities     742,410     737,981
                            ----------  ----------
                            $7,751,488  $7,744,671
                            ==========  ==========
</TABLE>

          In 2003, the FASB Emerging Issues Task Force released Issue 03-01, The
          Meaning  of  Other-Than-Temporary  Impairment  and  Its Application to
          Certain  Investments.  The  issue  requires  disclosure  of  certain
          information about other than temporary impairments in the market value
          of  securities.  The market value of investment securities is based on
          quoted  market  values  and  is significantly affected by the interest
          rate  environment.  At December 31, 2003, all unrealized losses in the
          securities  portfolio were for debt securities. All securities with an
          unrealized  loss  at  December 31, 2003 have been in a continuous loss
          position  for  less  than  twelve  months. These unrealized losses are
          considered  temporary  because of acceptable investment grades on each
          security  and  the  repayment  sources  of  principal and interest are
          government  backed.

NOTE 3.  LOANS

          The  composition  of  loans  as  of December 31, 2003 is summarized as
          follows:

<TABLE>
<CAPTION>
<S>                             <C>
Commercial                       $1,373,000
Real estate - commercial          5,494,000
Real estate - construction        2,356,000
Real estate - mortgage            9,285,000
Consumer installment and other    1,108,648
                                ------------
                                 19,616,648
Deferred loan fees                  (46,811)
Allowance for loan losses          (271,000)
                                ------------
Loans, net                      $19,298,837
                                ============
</TABLE>


                                       12
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3.  LOANS  (CONTINUED)

          Changes  in  the allowance for loan losses for the year ended December
          31,  2003  are  as  follows:

<TABLE>
<CAPTION>
<S>                                           <C>
Balance, beginning of year                    $      -
  Provision for loan losses                    271,000
  Loans charged off                             (5,000)
  Recoveries of loans previously charged off     5,000
                                              ---------
Balance, end of year                          $271,000
                                              =========
</TABLE>

          Management  has  identified no amounts of impaired loans as defined by
          SFAS  No. 114, Accounting by Creditors for Impairment of a Loan, as of
          and  for  the  year  ended  December  31, 2003. There were no loans on
          nonaccrual  status  as  of  December 31, 2003. Approximately $3,000 of
          loans were past due ninety days or more and still accruing interest as
          of  December  31,  2003.

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

<TABLE>
<CAPTION>
<S>                         <C>
Balance, beginning of year  $         -
  Advances                    2,832,724
  Repayments                   (294,058)
                            ------------
Balance, end of year        $ 2,538,666
                            ============
</TABLE>

NOTE 4.  PREMISES  AND  EQUIPMENT

          Premises and equipment is summarized as follows:

<TABLE>
<CAPTION>
                               DECEMBER 31,
                          ---------------------
                             2003        2002
                          -----------  --------
<S>                       <C>          <C>
Land improvements         $  192,774         -
Buildings                  1,513,654         -
Furniture and equipment      490,558     8,795
                          -----------  --------
                           2,196,986     8,795
Accumulated depreciation     (15,323)   (1,803)
                          -----------  --------
                          $2,181,663   $ 6,992
                          ===========  ========
</TABLE>

          During  2003,  the  Company  completed  and  occupied  its main office
          banking  facility.  As  of  December  31,  2003, the estimated cost of
          completion  was  approximately  $200,000.


                                       13
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4.  PREMISES  AND  EQUIPMENT

         LEASES

          The Company leases the land for its main office banking facility under
          a  noncancelable  operating  lease  agreement.  The term of the ground
          lease is 30 years. The base rental amount is $3,500 per month and will
          increase  annually  based  on the consumer price index. The Company is
          responsible for all utilities, property taxes and routine maintenance.

          The Company also leases various items of equipment under noncancelable
          operating  leases  with  initial  lease  terms  of  36 months with one
          24-month  renewal  option.

          Rental  expense  under  all  operating leases amounted to $104,978 and
          $69,126  for the years ended December 31, 2003 and 2002, respectively.

          Future  minimum  lease  payments on noncancelable operating leases are
          summarized  as  follows:

               2004                                         $142,882
               2005                                          142,882
               2006                                           75,627
               2007                                           42,000
               2008                                           42,000
               Thereafter                                  1,004,500
                                                          ----------
                                                          $1,449,891
                                                          ==========

NOTE 5.  DEPOSITS

          The  aggregate amount of time deposits in denominations of $100,000 or
          more at December 31, 2003 was $11,222,749. The scheduled maturities of
          time  deposits  at  December  31,  2003  are  as  follows:

               2004                                     $  9,667,122
               2005                                        5,460,414
               2006                                        3,156,360
               2007                                        2,688,345
               2008                                          899,340
                                                        ------------
                                                        $ 21,871,581
                                                        ============


                                       14
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6.  OTHER  BORROWINGS

          Other borrowings is summarized as follows:

<TABLE>
<CAPTION>
                                                                    DECEMBER 31,
                                                                  ---------------
                                                                  2003     2002
                                                                  -----  --------
<S>                                                               <C>    <C>
Line of credit in the amount of $700,000 due a commercial bank.
   Interest was due on the line of credit in the amount of prime
   less .50% or 3.75% at December 31, 2002.  The line was
   repaid with the proceeds from the common stock offering
   on January 7, 2003.                                            $   -  $694,859
Advances due to organizers.  The advances were noninterest-
   bearing; however, interest was imputed on the advances at
   a rate of prime less .50%.  The advances were repaid with
   the proceeds from the common stock offering on
   January 7, 2003.                                                   -    50,000
                                                                  -----  --------
                                                                  $   -  $744,859
                                                                  =====  ========
</TABLE>


NOTE 7.  EMPLOYEE  AND  DIRECTOR  BENEFITS

         STOCK  OPTIONS

          The  Company  adopted a stock option plan during 2003 which grants key
          employees  options  to purchase shares of common stock of the Company.
          Option prices and terms are determined by a committee appointed by the
          Board  of  Directors. The plan provides for a total of 137,075 options
          to  purchase common shares of the Company. Other pertinent information
          related  to  the  options  for  the year ended December 31, 2003 is as
          follows:

<TABLE>
<CAPTION>
                                                   WEIGHTED-
                                                    AVERAGE
                                                   EXERCISE
                                          NUMBER    PRICE
                                        ----------  --------
<S>                                     <C>         <C>
Options outstanding, beginning of year           -  $      -
   Granted                                  55,846     10.00
   Exercised                                     -         -
                                        ----------
Options outstanding, end of year            55,846     10.00
                                        ==========

Exercisable, end of year                         -
                                        ==========

Weighted-average fair value of options
   granted during the year                          $   3.61

Weighted-average remaining
   contractual life in years                             9.5
</TABLE>


                                       15
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7.  EMPLOYEE  AND  DIRECTOR  BENEFITS  (CONTINUED)

         STOCK  WARRANTS

          In  recognition  of  the efforts and financial risks undertaken by the
          Company's  organizers,  the  Company  granted  each  organizer  an
          opportunity  to  purchase  a  number of shares of the Company's common
          stock.  The  warrants  vest over a three year period from the date the
          Company  first issued its common stock and are exercisable in whole or
          in part during the ten year period following that date, at an exercise
          price  equal  to  $10 per share. The warrants are nontransferable, but
          shares  issued  pursuant  to  the  exercise  of  warrants  will  be
          transferable,  subject  to compliance with applicable securities laws.
          The  Company  first  issued its common stock on January 6, 2003. Other
          pertinent  information  related  to  the  warrants  for the year ended
          December  31,  2003  is  as  follows:

<TABLE>
<CAPTION>
                                                   WEIGHTED-
                                                    AVERAGE
                                                   EXERCISE
                                           NUMBER    PRICE
                                         ----------  -------
<S>                                      <C>         <C>
Warrants outstanding, beginning of year           -  $     -
   Granted                                  220,156    10.00
   Exercised                                      -        -
                                         ----------
Warrants outstanding, end of year           220,156    10.00
                                         ==========

Exercisable, end of year                          -
                                         ==========
Weighted-average fair value of warrants
   granted during the year                           $  3.61

Weighted-average remaining
   contractual life in years                             9.0
</TABLE>

          The  fair  value  of  each  stock  option  and  stock warrant grant is
          estimated  on the date of grant using the Black-Scholes option-pricing
          model  with  the  following  weighted-average assumptions for the year
          ended  December  31,  2003:

             Dividend yield                                        0%
             Expected life                                   10 years
             Expected volatility                                   0%
             Risk-free interest rate                            4.55%

         PROFIT  SHARING  PLAN

          The Company sponsors a Simple IRA Profit Sharing Plan available to all
          eligible  employees,  subject  to  certain  minimum  age  and  service
          requirements.  There  were no contributions charged to expense for the
          years  ended  December  31,  2003  or  2002.


                                       16
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8.  INCOME  TAXES

          Income taxes consists of the following:

<TABLE>
<CAPTION>
                                    YEARS ENDED DECEMBER 31,
                                 -----------------------------
                                     2003            2002
                                 -------------  --------------
<S>                              <C>            <C>
  Current                        $   (460,312)  $     (37,476)
  Deferred                              8,850        (103,992)
  Change in valuation allowance       451,462         141,468
                                 -------------  --------------
        Income taxes             $          -   $           -
                                 =============  ==============
</TABLE>

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

<TABLE>
<CAPTION>
                                                     YEARS ENDED DECEMBER 31,
                                                   -----------------------------
                                                       2003            2002
                                                   -------------  --------------
<S>                                                <C>            <C>
Income tax (benefit) at federal statutory rate     $   (405,278)  $    (132,923)
  State tax (benefit)                                   (46,665)        (15,305)
  Other                                                     481           6,760
  Change in valuation allowance                         451,462         141,468
                                                   -------------  --------------
Income taxes                                       $          -   $           -
                                                   =============  ==============
</TABLE>

          The components of deferred income taxes are as follows:

<TABLE>
<CAPTION>
                                           DECEMBER 31,
                                      ----------------------
                                         2003        2002
                                      ----------  ----------
<S>                                   <C>         <C>
Deferred income tax assets:
  Loan loss reserves                  $  32,224   $       -
  Preopening and organization expenses  139,107     183,495
  Net operating loss carryforward       506,227      45,915
  Securities available for sale           2,590           -
  Deferred fees                          17,664           -
  Contributions                           2,022           -
                                      ----------  ----------
                                        699,834     229,410

Valuation allowance                    (683,020)   (228,968)
                                      ----------  ----------
                                         16,814         442
                                      ----------  ----------

Deferred income tax liabilities:
  Depreciation                           16,814         442
                                      ----------  ----------
                                         16,814         442
                                      ----------  ----------

Net deferred income taxes             $       -   $       -
                                      ==========  ==========
</TABLE>

          At  December  31,  2003,  the Company has available net operating loss
          carryforwards  of  approximately  $1,339,000  for  federal  income tax
          purposes.  If unused, the carryforwards will expire beginning in 2023.


                                       17
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9.  COMMITMENTS  AND  CONTINGENCIES

         LOAN  COMMITMENTS

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

          The  Company's  exposure to credit loss in the event of nonperformance
          by  the  other  party  to  the financial instrument for commitments to
          extend  credit  and  standby  letters  of credit is represented by the
          contractual  amount  of  those  instruments. The Company uses the same
          credit  policies in making commitments as it does for on-balance-sheet
          instruments. A summary of the Company's commitments as of December 31,
          2003  is  as  follows:

               Commitments to extend credit                   $  4,558,000
               Performance letters of credit                        55,000
                                                              ------------
                                                              $  4,613,000
                                                              ============

          Commitments  to  extend credit are agreements to lend to a customer as
          long  as  there  is  no  violation of any condition established in the
          contract. Since many of the commitments are expected to expire without
          being  drawn  upon,  the  total  commitment amounts do not necessarily
          represent  future  cash  requirements.

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

          At  December  31,  2003  and  2002, the carrying amount of liabilities
          related to the Company's obligation to perform under financial standby
          letters of credit was insignificant. The Company has not been required
          to perform on any financial standby letters of credit, and the Company
          has not incurred any losses on financial standby letters of credit for
          the  years  ended  December  31,  2003  and  2002.

         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 10.  CONCENTRATIONS  OF  CREDIT

          The  Company originates primarily commercial, residential and consumer
          loans  to  customers  in  Union  County  and surrounding counties. The
          ability  of  the  majority  of  the Company's customers to honor their
          contractual  loan  obligations  is  dependent  on the economy in these
          areas. Eighty-seven percent of the Company's loan portfolio is secured
          by  real  estate,  of  which  a substantial portion is secured by real
          estate  in  the  Company's  market  area.

          The  Company,  as a matter of policy, does not generally extend credit
          to  any single borrower or group of related borrowers in excess of 25%
          of  the  lesser  of  statutory  capital  or  net assets as defined, or
          approximately  $1,600,000.


                                       18
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11.  REGULATORY  MATTERS

          The Bank is subject to certain restrictions on the amount of dividends
          that  may  be  declared without prior regulatory approval. At December
          31,  2003, no dividends could be declared without regulatory approval.

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

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

          As of December 31, 2003, the most recent notification from the Federal
          Deposit Insurance Corporation categorized the Bank as well capitalized
          under  the  regulatory  framework  for prompt corrective action. To be
          categorized  as well capitalized, the Bank must maintain minimum Total
          risk-based,  Tier I risk-based and Tier I leverage ratios as set forth
          in  the  following table. There are no conditions or events since that
          notification  that  management  believes  have  changed  the  Bank's
          category.

<TABLE>
<CAPTION>
                                                                                TO BE WELL
                                                              FOR CAPITAL   CAPITALIZED UNDER
                                                               ADEQUACY     PROMPT CORRECTIVE
                                               ACTUAL          PURPOSES     ACTION PROVISIONS
                                           ---------------  ---------------  ----------------
                                           AMOUNT   RATIO   AMOUNT   RATIO   AMOUNT   RATIO
                                           -------  ------  -------  ------  -------  -------
                                                          (DOLLARS IN THOUSANDS)
                                           --------------------------------------------------
<S>                                        <C>      <C>     <C>      <C>     <C>      <C>
DECEMBER 31, 2003:
  TOTAL CAPITAL TO RISK WEIGHTED ASSETS    $ 6,742  27.41%  $ 1,968      8%  $ 2,460     10%
  TIER I CAPITAL TO RISK WEIGHTED ASSETS   $ 6,471  26.31%  $   984      4%  $ 1,476      6%
  TIER I CAPITAL TO AVERAGE ASSETS         $ 6,471  17.35%  $ 1,492      4%  $ 1,865      5%
</TABLE>

NOTE 12.  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. FASB Statement No. 107, Disclosures about Fair Values
          of  Financial  Instruments, excludes certain financial instruments and
          all  nonfinancial  instruments  from  its  disclosure  requirements.
          Accordingly,  the  aggregate  fair  value  amounts  presented  may not
          necessarily  represent  the  underlying  fair  value  of  the Company.


                                       19
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12.  FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS  (CONTINUED)

          The  following  methods  and  assumptions  were used by the Company in
          estimating  fair  value  disclosures  for  financial  instruments.

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

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

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

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

          OTHER  BORROWINGS:  For other borrowings, the carrying amount of other
          borrowings  approximates  their  fair  value.

          ACCRUED INTEREST: The carrying amounts of accrued interest approximate
          their  fair  values.

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

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

<TABLE>
<CAPTION>
                                                DECEMBER 31,
                               --------------------------------------------
                                          2003                 2002
                               ------------------------  ------------------
                                CARRYING       FAIR     Carrying    Fair
                                 AMOUNT        VALUE      Amount    Value
                               -----------  -----------  --------  --------
<S>                            <C>          <C>          <C>       <C>
Financial assets:
  Cash, due from banks,
    and federal funds sold     $ 8,419,325  $ 8,419,325  $    978  $    978
  Securities                     7,744,671    7,744,671         -         -
  Loans                         19,298,837   19,976,436         -         -
  Accrued interest receivable      141,584      141,584         -         -

Financial liabilities:
  Deposits                      30,505,705   30,694,280         -         -
  Other borrowings                       -            -   744,859   744,859
  Accrued interest payable          72,567       72,567         -         -
</TABLE>


                                       20
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13.  SUPPLEMENTAL  FINANCIAL  DATA

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

<TABLE>
<CAPTION>
                                                      YEARS ENDED DECEMBER 31,
                                                    ---------------------------
                                                        2003          2002
                                                    ------------  -------------
<S>                                                 <C>           <C>
OTHER EXPENSES:
   Advertising, promotion and business development  $    127,710  $       6,390
   Printing and office supplies                           63,457         31,424
   Data processing                                        63,461              -
   Legal and professional                                124,606         15,905
   Telephone                                              36,137          4,336
</TABLE>

NOTE 14.  PARENT  COMPANY  FINANCIAL  INFORMATION

          The  following  information  presents  the condensed balance sheets of
          Generations  Bancshares, Inc. as of December 31, 2003 and 2002 and the
          condensed  statements  of operations and cash flows for the years then
          ended.

<TABLE>
<CAPTION>
                              CONDENSED BALANCE SHEET

                                                               2003        2002
                                                            ----------  -----------
<S>                                                         <C>         <C>
ASSETS
  Cash                                                      $  697,357  $      978
  Restricted cash                                                    -   7,823,000
  Investment in subsidiary                                   6,464,459           -
  Other assets                                                       -     174,058
                                                            ----------  -----------

      TOTAL ASSETS                                          $7,161,816  $7,998,036
                                                            ==========  ===========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
  Other borrowings                                          $        -  $  744,859
  Subscribers' deposits                                              -   7,823,000
  Other liabilities                                                  -      32,929
                                                            ----------  -----------
       Total liabilities                                             -   8,600,788
                                                            ----------  -----------

  STOCKHOLDERS' EQUITY (DEFICIT)                             7,161,816    (602,752)
                                                            ----------  -----------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)   $7,161,816  $7,998,036
                                                            ==========  ===========
</TABLE>


                                       21
<PAGE>
<TABLE>
<CAPTION>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14.  PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)

             CONDENSED STATEMENTS OF OPERATIONS

                                          2003         2002
                                      ------------  ----------
<S>                                   <C>           <C>
EXPENSES
  Interest                            $         -   $  16,844
  Other                                    16,032     374,105
                                      ------------  ----------
                                           16,032     390,949
                                      ------------  ----------


    LOSS BEFORE LOSSES OF SUBSIDIARY      (16,032)   (390,949)

LOSSES OF SUBSIDIARY                   (1,175,962)          -
                                      ------------  ----------

    NET LOSS                          $(1,191,994)  $(390,949)
                                      ============  ==========
</TABLE>

<TABLE>
<CAPTION>
                              CONDENSED STATEMENTS OF CASH FLOWS

                                                                    2003         2002
                                                                ------------  ----------
<S>                                                             <C>           <C>
OPERATING ACTIVITIES
  Net loss                                                      $(1,191,994)  $(390,949)
  Adjustments to reconcile net loss to net
    cash used in operating activities:
    Losses of subsidiary                                          1,175,962           -
    Net other operating activities                                  (25,548)     25,548
                                                                ------------  ----------

      NET CASH USED IN OPERATING ACTIVITIES                         (41,580)   (365,401)
                                                                ------------  ----------

INVESTING ACTIVITIES
  Investment in common stock of subsidiary                       (8,250,000)          -
  Transfer of preopening expenses to subsidiary                     602,762           -
  Transfer of premises, equipment and other assets to subsidiary     10,532           -
  Purchase of premises and equipment                                      -        (587)
                                                                ------------  ----------

      NET CASH USED IN INVESTING ACTIVITIES                      (7,636,706)       (587)
                                                                ------------  ----------

FINANCING ACTIVITIES
  Proceeds from sale of common stock                              9,138,330           -
  Stock offering costs                                              (18,806)   (156,145)
  Proceeds from other borrowings                                      4,500     525,859
  Repayment of other borrowings                                    (699,359)          -
  Repayment of organizer advances                                   (50,000)     (5,000)
                                                                ------------  ----------

      NET CASH PROVIDED BY FINANCING ACTIVITIES                   8,374,665     364,714
                                                                ------------  ----------

Net increase (decrease) in cash                                     696,379      (1,274)

Cash at beginning of year                                               978       2,252
                                                                ------------  ----------

Cash at end of year                                             $   697,357   $     978
                                                                ============  ==========
</TABLE>


                                       22
<PAGE>