----

**SEASONS      BANCSHARES, INC.**

**AND      SUBSIDIARY**

**CONSOLIDATED      FINANCIAL REPORT**

**DECEMBER      31, 2005**

----

**SEASONS      BANCSHARES, INC.**

** AND      SUBSIDIARY**

**CONSOLIDATED      FINANCIAL REPORT **

**DECEMBER      31, 2005**

**TABLE      OF CONTENTS**

|                                                                       |   | **Page** |
|----------------------------------------------------------------------------|--------|----------|
|                                                                       |   |     |
| **REPORT                OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** |   | **1**    |
|                                                                       |   |     |
| **CONSOLIDATED                FINANCIAL STATEMENTS**                       |   |     |
|                                                                       |   |     |
| **Consolidated                balance sheets**                             |   | **2**    |
| **Consolidated                statements of operations**                   |   | **3**    |
| **Consolidated                statements of comprehensive loss**           |   | **4**    |
| **Consolidated                statements of stockholders' equity**         |   | **5**    |
| **Consolidated                statements of cash flows**                   |   | **6**    |
| **Notes                to consolidated financial statements**              |   | **7-24** |

----

**REPORT      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

**To      the Board of Directors**

**Seasons      Bancshares, Inc. and Subsidiary**

**Blairsville,      Georgia**

**Seasons      Bancshares, Inc. and subsidiary **

|   | /s/                MAULDIN & JENKINS, LLC |
|--------|-----------------------------------------------|

----

**SEASONS      BANCSHARES, INC. **

**AND      SUBSIDIARY**

**CONSOLIDATED      BALANCE SHEETS **

**DECEMBER      31,2005 AND 2004**

| **Assets**                                                                                                                                |   | **2005** |           | 2004   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|----------------|--------|--------|
|                                                                                                                                      |   |     |           |   |   |
| Cash                and due from banks                                                                                                    |   | **$**    | **1,185,008**  |   | $      | 1,656,205 |   |
| Interest-bearing                deposits in banks                                                                                         |   |     | **80,139**     |   |   | - |   |
| Federal                funds sold                                                                                                         |   |     | **464,000**    |   |   | 1,094,000 |   |
| Securities                available for sale, at fair value                                                                               |   |     | **6,176,439**  |   |   | 6,616,962 |   |
| Restricted                equity securities, at cost                                                                                      |   |     | **334,200**    |   |   | 75,700 |   |
| Loans                                                                                                                                     |   |     | **64,493,962** |   |   | 42,296,073 |   |
| Less                allowance for loan losses                                                                                             |   |     | **900,123**    |   |   | 538,665 |   |
| Loans,                net                                                                                                                 |   |     | **63,593,839** |   |   | 41,757,408 |   |
|                                                                                                                                      |   |     |           |   |   |   |   |
| Premises                and equipment                                                                                                     |   |     | **3,313,720**  |   |   | 3,047,361 |   |
| Other                assets                                                                                                               |   |     | **610,529**    |   |   | 323,210 |   |
|                                                                                                                                      |   |     |           |   |   |   |   |
| **Total                assets**                                                                                                           |   | **$**    | **75,757,874** |   | $      | 54,570,846 |   |
|                                                                                                                                      |   |     |           |   |   |   |   |
| **Liabilities                and Stockholders' Equity**                                                                                   |   |     |           |   |   |   |   |
|                                                                                                                                      |   |     |           |   |   |   |   |
| Liabilities:                                                                                                                              |   |     |           |   |   |   |   |
| Deposits:                                                                                                                                 |   |     |           |   |   |   |   |
| Noninterest-bearing                                                                                                                       |   | **$**    | **5,898,811**  |   | $      | 2,968,091 |   |
| Interest-bearing                                                                                                                          |   |     | **57,992,799** |   |   | 44,811,875 |   |
| Total                deposits                                                                                                             |   |     | **63,891,610** |   |   | 47,779,966 |   |
| Other                borrowings                                                                                                           |   |     | **4,400,000**  |   |   | - |   |
| Other                liabilities                                                                                                          |   |     | **325,653**    |   |   | 181,356 |   |
| **Total                liabilities**                                                                                                      |   |     | **68,617,263** |   |   | 47,961,322 |   |
|                                                                                                                                      |   |     |           |   |   |   |   |
| Commitments                and contingencies (Note 9)                                                                                     |   |     |           |   |   |   |   |
|                                                                                                                                      |   |     |           |   |   |   |   |
| 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; 973,471 and 913,834                shares issued and outstanding |   |     | **973,471**    |   |   | 913,834 |   |
| Capital                surplus                                                                                                            |   |     | **8,709,565**  |   |   | 8,053,558 |   |
| Accumulated                deficit                                                                                                        |   |     | **(2,458,324** | **)**  |   | (2,304,600 | ) |
| Accumulated                other comprehensive loss                                                                                       |   |     | **(84,101**    | **)**  |   | (53,268 | ) |
|                                                                                                                                      |   |     |           |   |   |   |   |
| **Total                stockholders' equity**                                                                                             |   |     | **7,140,611**  |   |   | 6,609,524 |   |
|                                                                                                                                      |   |     |           |   |   |   |   |
| **Total                liabilities and stockholders' equity**                                                                             |   | $        | **75,757,874** |   | $      | 54,570,846 |   |

**See      Notes to Consolidated Financial Statements.**

----

**SEASONS      BANCSHARES, INC. **

**AND      SUBSIDIARY**

**CONSOLIDATED      STATEMENTS OF OPERATIONS **

**YEARS      ENDED DECEMBER 31, 2005 AND 2004**

|                                                                   |   | **2005** |          | 2004   |   |
|------------------------------------------------------------------------|--------|----------|---------------|--------|--------|
|                                                                   |   |     |          |   |   |
| **Interest                income:**                                    |   |     |          |   |   |
| Loans,                including fees                                   |   | **$**    | **4,221,947** |   | $      | 2,331,236 |   |
| Taxable                securities                                      |   |     | **181,179**   |   |   | 177,111 |   |
| Federal                funds sold                                      |   |     | **5,782**     |   |   | 21,965 |   |
| Interest-bearing                deposits in banks                      |   |     | **4,459**     |   |   | - |   |
| **Total                interest income**                               |   |     | **4,413,367** |   |   | 2,530,312 |   |
|                                                                   |   |     |          |   |   |   |   |
| **Interest                expense:**                                   |   |     |          |   |   |   |   |
| Deposits                                                               |   |     | **1,626,792** |   |   | 888,806 |   |
| Other                borrowings                                        |   |     | **140,321**   |   |   | 5,249 |   |
| **Total                interest expense**                              |   |     | **1,767,113** |   |   | 894,055 |   |
|                                                                   |   |     |          |   |   |   |   |
| **Net                interest income**                                 |   |     | **2,646,254** |   |   | 1,636,257 |   |
| **Provision                for loan losses**                           |   |     | **396,000**   |   |   | 302,500 |   |
| **Net                interest income after provision for loan losses** |   |     | **2,250,254** |   |   | 1,333,757 |   |
|                                                                   |   |     |          |   |   |   |   |
| **Other                income:**                                       |   |     |          |   |   |   |   |
| Service                charges on deposit accounts                     |   |     | **141,392**   |   |   | 76,683 |   |
| Other                operating income                                  |   |     | **12,124**    |   |   | 17,767 |   |
| **Total                other income**                                  |   |     | **153,516**   |   |   | 94,450 |   |
|                                                                   |   |     |          |   |   |   |   |
| **Other                expenses:**                                     |   |     |          |   |   |   |   |
| Salaries                and employee benefits                          |   |     | **1,163,408** |   |   | 895,499 |   |
| Equipment                and occupancy expenses                        |   |     | **523,969**   |   |   | 436,542 |   |
| Other                operating expenses                                |   |     | **870,117**   |   |   | 602,007 |   |
| **Total                other expenses**                                |   |     | **2,557,494** |   |   | 1,934,048 |   |
|                                                                   |   |     |          |   |   |   |   |
| **Net                loss**                                            |   | **$**    | **(153,724**  | **)**  | $      | (505,841 | ) |
|                                                                   |   |     |          |   |   |   |   |
| **Basic                and diluted losses per share**                  |   | **$**    | **(0.17**     | **)**  | $      | (0.55 | ) |

**See      Notes      to Consolidated Financial Statements.**

----

**SEASONS      BANCSHARES, INC. **

**AND      SUBSIDIARY**

**CONSOLIDATED      STATEMENTS OF COMPREHENSIVE LOSS **

**YEARS      ENDED DECEMBER 31,2005 AND 2004**

|                                                                                                           |   | **2005** |         | 2004   |   |
|----------------------------------------------------------------------------------------------------------------|--------|----------|--------------|--------|--------|
|                                                                                                           |   |     |         |   |   |
| **Net                loss**                                                                                    |   | **$**    | **(153,724** | **)**  | $      | (505,841 | ) |
|                                                                                                           |   |     |         |   |   |   |   |
| **Other                comprehensive loss:**                                                                   |   |     |         |   |   |   |   |
|                                                                                                           |   |     |         |   |   |   |   |
| Unrealized                holding losses on securities available for sale arising during                period |   |     | **(30,833**  | **)**  |   | (46,451 | ) |
|                                                                                                           |   |     |         |   |   |   |   |
| **Comprehensive                loss**                                                                          |   | **$**    | **(184,557** | **)**  | $      | (552,292 | ) |

**See      Notes to Consolidated Financial Statements.**

----

**SEASONS      BANCSHARES, INC. **

**AND      SUBSIDIARY**

**CONSOLIDATED      STATEMENTS OF STOCKHOLDERS' EQUITY **

**YEARS      ENDED DECEMBER 31, 2005 AND 2004**

|                                          |   |                            |    |                         |   |            |   |              |      | **Accumulated**   |   |       |   |
|-----------------------------------------------|--------|---------------------------------|---------|------------------------------|--------|-----------------|--------|-------------------|-----------|-------------------|--------|------------|--------|
|                                          |   |                            |    |                         |   |            |   |              |      | **Other**         |   | **Total**  |   |
|                                          |   | **Common                Stock** |    | **Capital**                  |   | **Accumulated** |   | **Comprehensive** |      | **Stockholders'** |   |
|                                          |   | **Shares**                      |    | **Par                Value** |   | **Surplus**     |   | **Deficit**       |      | **Loss**          |   | **Equity** |   |
|                                          |   |                            |    |                         |   |            |   |              |      |              |   |       |   |
| **Balance,                December 31, 2003** |   |                            | 913,834 |                         | $      | 913,834         |   | $                 | 8,053,558 |              | $      | (1,798,759 | )      | $ | (6,817 | ) | $ | 7,161,816 |   |
| Net                loss                       |   |                            | **-**   |                         |   | **-**           |   |              | **-**     |              |   | (505,841   | )      |   | **-** |   |   | (505,841 | ) |
| Other                comprehensive loss       |   |                            | **-**   |                         |   | **-**           |   |              | **-**     |              |   | **-**      |   |   | (46,451 | ) |   | (46,451 | ) |
| **Balance,                December 31, 2004** |   |                            | 913,834 |                         |   | 913,834         |   |              | 8,053,558 |              |   | (2,304,600 | )      |   | (53,268 | ) |   | 6,609,524 |   |
| Net                loss                       |   |                            | **-**   |                         |   | **-**           |   |              | **-**     |              |   | (153,724   | )      |   | **-** |   |   | (153,724 | ) |
| Sale                of common stock           |   |                            | 59,637  |                         |   | 59,637          |   |              | 656,007   |              |   | **-**      |   |   | **-** |   |   | 715,644 |   |
| Other                comprehensive loss       |   |                            | **-**   |                         |   | **-**           |   |              | **-**     |              |   | **-**      |   |   | (30,833 | ) |   | (30,833 | ) |
| **Balance,                December 31, 2005** |   |                            | 973,471 |                         | $      | 973,471         |   | $                 | 8,709,565 |              | $      | (2,458,324 | )      | $ | (84,101 | ) | $ | 7,140,611 |   |

**See      Notes to Consolidated Financial Statements.**

----

**SEASONS      BANCSHARES, INC. **

**AND      SUBSIDIARY**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS **

**YEARS      ENDED DECEMBER 31, 2005 AND 2004**

|                                                                                                                    |   | **2005** |            | 2004   |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|----------|-----------------|--------|--------|
| **OPERATING                ACTIVITIES**                                                                                 |   |     |            |   |   |
| Net                loss                                                                                                 |   | $        | **(153,724**    | **)**  | $      | (505,841 | ) |
| Adjustments                to reconcile net loss to net cash provided by (used in) operating                activities: |   |     |            |   |   |   |   |
| Depreciation                and amortization                                                                            |   |     | **200,214**     |   |   | 138,289 |   |
| Provision                for loan losses                                                                                |   |     | **396,000**     |   |   | 302,500 |   |
| Increase                in interest receivable                                                                          |   |     | **(206,122**    | **)**  |   | (129,893 | ) |
| Increase                in interest payable                                                                             |   |     | **127,266**     |   |   | 17,523 |   |
| Net                other operating activities                                                                           |   |     | **(64,166**     | **)**  |   | (6,459 | ) |
|                                                                                                                    |   |     |            |   |   |   |   |
| Net                cash provided by (used in) operating activities                                                      |   |     | **299,468**     |   |   | (183,881 | ) |
|                                                                                                                    |   |     |            |   |   |   |   |
| **INVESTING                ACTIVITIES**                                                                                 |   |     |            |   |   |   |   |
| Purchases                of securities available for sale                                                               |   |     | **(1,000,000**  | **)**  |   | (1,396,271 | ) |
| Net                increase in interest-bearing deposits in banks                                                       |   |     | **(80,139**     | **)**  |   | - |   |
| Proceeds                from maturities of securities available for sale                                                |   |     | **1,409,690**   |   |   | 2,477,529 |   |
| Net                decrease in federal funds sold                                                                       |   |     | **630,000**     |   |   | 6,222,000 |   |
| Purchases                of restricted equity securities                                                                |   |     | **(258,500**    | **)**  |   | (75,700 | ) |
| Net                increase in loans                                                                                    |   |     | **(22,232,431** | **)**  |   | (22,761,071 | ) |
| Net                purchase of premises and equipment                                                                   |   |     | **(466,573**    | **)**  |   | (1,003,987 | ) |
|                                                                                                                    |   |     |            |   |   |   |   |
| Net                cash used in investing activities                                                                    |   |     | **(21,997,953** | **)**  |   | (16,537,500 | ) |
|                                                                                                                    |   |     |            |   |   |   |   |
| **FINANCING                ACTIVITIES**                                                                                 |   |     |            |   |   |   |   |
| Net                increase in deposits                                                                                 |   |     | **16,111,644**  |   |   | 17,274,261 |   |
| Proceeds                from sale of common stock                                                                       |   |     | **715,644**     |   |   | - |   |
| Net                increase in other borrowings                                                                         |   |     | **4,400,000**   |   |   | - |   |
|                                                                                                                    |   |     |            |   |   |   |   |
| Net                cash provided by financing activities                                                                |   |     | **21,227,288**  |   |   | 17,274,261 |   |
|                                                                                                                    |   |     |            |   |   |   |   |
| Net                increase (decrease) in cash and due from banks                                                       |   |     | **(471,197**    | **)**  |   | 552,880 |   |
|                                                                                                                    |   |     |            |   |   |   |   |
| Cash                and due from banks at beginning of year                                                             |   |     | **1,656,205**   |   |   | 1,103,325 |   |
|                                                                                                                    |   |     |            |   |   |   |   |
| Cash                and due from banks at end of year                                                                   |   | **$**    | **1,185,008**   |   | $      | 1,656,205 |   |
|                                                                                                                    |   |     |            |   |   |   |   |
| **SUPPLEMENTAL                DISCLOSURE**                                                                              |   |     |            |   |   |   |   |
| Cash                paid during the year for:                                                                           |   |     |            |   |   |   |   |
| Interest                                                                                                                |   | $        | **1,639,847**   |   | $      | 876,532 |   |
|                                                                                                                    |   |     |            |   |   |   |   |
| **NONCASH                TRANSACTIONS**                                                                                 |   |     |            |   |   |   |   |
| Other                real estate acquired in settlement of loans                                                        |   | $        | -               |   | $      | (107,190 | ) |
| Sales                of other real estate financed by Seasons Bank                                                      |   | $        | -               |   | $      | 107,190 |   |

**See      Notes to Consolidated Financial Statements.**

----

**SEASONS      BANCSHARES, INC.**

**AND      SUBSIDIARY**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **NOTE                1.** | **SUMMARY                OF SIGNIFICANT ACCOUNTING                POLICIES** |
|----------------------------|------------------------------------------------------------------------------|

**Nature      of Business**

**Basis      of Presentation and Accounting Estimates**

**Cash,      Due From Banks and Cash Flows**

**Securities**

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **NOTE                1.** | **SUMMARY                OF SIGNIFICANT ACCOUNTING POLICIES                (Continued)** |
|----------------------------|------------------------------------------------------------------------------------------|

**Loans**

**Allowance      for Loan Losses**

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **NOTE                1.** | **SUMMARY                OF SIGNIFICANT ACCOUNTING POLICIES                (Continued)** |
|----------------------------|------------------------------------------------------------------------------------------|

**Premises      and Equipment**

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

**Income      Taxes**

**Losses      Per Share**

**Stock-Based      Compensation**

*Accounting      for Stock Issued to Employees, *
*Accounting      for Stock-Based Compensation, *

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **NOTE                1.** | **SUMMARY                OF SIGNIFICANT ACCOUNTING POLICIES                (Continued)** |
|----------------------------|------------------------------------------------------------------------------------------|

**Stock-Based      Compensation (Continued)**

|                                                                                                                                          |   | **Years                Ended****December                31,** |         |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------|--------------|
|                                                                                                                                          |   | **2005**                                                      |         | 2004 |   |
|                                                                                                                                          |   |                                                          |         |   |   |
| Net                loss, as reported                                                                                                          |   | **$**                                                         | **(153,724** | **)** | $ | (505,841 | ) |
| Deduct:                Total stock-based employee compensation expense                determined under fair value based method for all awards |   |                                                          | **(296,022** | **)** |   | (332,120 | ) |
| Pro                forma net loss                                                                                                             |   | $                                                             | **(449,746** | **)** | $ | (837,961 | ) |
| Losses                per share:                                                                                                              |   |                                                          |         |   |   |   |   |
| Basic                - as reported                                                                                                            |   | $                                                             | **(0.17**    | **)** | $ | (0.55 | ) |
| Basic                - pro forma                                                                                                              |   | $                                                             | **(0.49**    | **)** | $ | (0.92 | ) |
| Diluted                - as reported                                                                                                          |   | $                                                             | **(0.17**    | **)** | $ | (0.55 | ) |
| Diluted                - pro forma                                                                                                            |   | $                                                             | **(0.49**    | **)** | $ | (0.92 | ) |

**Comprehensive      Loss**

**Recent      Accounting Standards**

*Accounting      for Stock-Based Compensation, *
*Accounting      for Stock Issued to Employees, *

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **NOTE                  1.** | **SUMMARY                    OF SIGNIFICANT ACCOUNTING POLICIES                    (Continued)** |
|------------------------------|--------------------------------------------------------------------------------------------------|

**Recent      Accounting Standards (Continued)**

| **NOTE                2.** | **SECURITIES** |
|----------------------------|----------------|

|                                                         |   | **Amortized****Cost** |          | **Gross****Unrealized****Gains** |    | **Gross****Unrealized****Losses** |   | **Fair                    Value** |        |
|--------------------------------------------------------------|--------|-----------------------|---------------|----------------------------------|---------|-----------------------------------|--------|-----------------------------------|-------------|
| **December                    31, 2005:**                    |   |                  |          |                             |    |                              |   |                              |        |
| **U.S.                    Government and agency securities** |   | $                     | **4,999,961** |                             | $  | -                                 |   | $                                 | **(39,180** | **)** | **$** | **4,960,781** |   |
| **Mortgage-backed                    securities**            |   |                  | **1,260,579** |                             |    | -                                 |   |                              | **(44,921** | **)** |   | **1,215,658** |   |
| **Total                    debt securities**                 |   | $                     | **6,260,540** |                             | $       | -                                 |   | $                                 | **(84,101** | **)** | $ | **6,176,439** |   |
|                                                         |   |                  |          |                             |    |                              |   |                              |        |   |   |   |   |
| December                    31, 2004:                        |   |                  |          |                             |    |                              |   |                              |        |   |   |   |   |
| U.S.                    Government and agency securities     |   | $                     | 5,003,617     |                             | $  | -                                 |   | $                                 | (43,133     | ) | $ | 4,960,484 |   |
| Mortgage-backed                    securities                |   |                  | 1,666,613     |                             |    | 5,343                             |   |                              | (15,478     | ) |   | 1,656,478 |   |
| Total                    debt securities                     |   | $                     | 6,670,230     |                             | $       | 5,343                             |   | $                                 | (58,611     | ) | $ | 6,616,962 |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **NOTE                2.** | **SECURITIES                (Continued)** |
|----------------------------|-------------------------------------------|

|                                      |   |                          |      |                      |   |
|-------------------------------------------|--------|-------------------------------|-----------|---------------------------|--------|
|                                      |   | Amortized                Cost |      | Fair                Value |   |
|                                      |   |                          |      |                      |   |
| Less                than one year         |   | $                             | 3,999,961 |                      | $      | 3,963,906 |   |
| Due                from one to five years |   |                          | 1,000,000 |                      |   | 996,875 |   |
| Mortgage-backed                securities |   |                          | 1,260,579 |                      |   | 1,215,658 |   |
|                                      |   | $                             | 6,260,540 |                      | $      | 6,176,439 |   |

*The      Meaning of Other-Than-Temporary *
*Impairment      and Its Application to Certain Investments. *

|                                                          |   | **Less                Then Tw****elve                Months** |       | **Over                Twelve Months** |   |
|---------------------------------------------------------------|--------|---------------------------------------------------------------|------------|---------------------------------------|--------|
|                                                          |   | **Gross****Unrealized****Losses**                             |       | **Fair                Value**         |   | **Gross****Unrealized****Losses** |   | **Fair                Value** |   |
| **December                31, 2005:**                         |   |                                                          |       |                                  |   |   |   |   |   |
| **U.S.                Government and agencies**               |   | **$**                                                         | **(3,125** | **)**                                 | **$**  | **496,875** |   | **$** | **(36,055** | **)** | **$** | **3,963,906** |   |
| **Mortgage-backed                securities**                 |   |                                                          | **(2,066** | **)**                                 |   | **238,430** |   |   | **(42,855** | **)** |   | **977,228** |   |
| **Total                temporarily impaired debt securities** |   | **$**                                                         | **(5,191** | **)**                                 | **$**  | **735,305** |   | **$** | **(78,910** | **)** | **$** | **4,941,134** |   |
|                                                          |   |                                                          |       |                                  |   |   |   |   |   |   |   |   |   |
| December              31, 2004:                               |   |                                                          |       |                                  |   |   |   |   |   |   |   |   |   |
| U.S.                Government and agencies                   |   | $                                                             | (43,133    | )                                     | $      | 4,960,484 |   | $  | - |   | $ | - |   |
| Mortgage-backed                securities                     |   |                                                          | (12,051    | )                                     |   | 910,222 |   |   | (3,427 | ) |   | 430,912 |   |
| Total                temporarily impaired debt securities     |   | $                                                             | (55,184    | )                                     | $      | 5,870,706 |   | $ | (3,427 | ) | $ | 430,912 |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **NOTE                3.** | **LOANS** |
|----------------------------|-----------|

|                                          |   | **Decemb****er                31,** |           |
|-----------------------------------------------|--------|-------------------------------------|----------------|
|                                          |   | **2005**                            |           | 2004 |   |
|                                          |   |                                |           |   |   |
| Commercial                                    |   | **$**                               | **4,703,000**  |   | $ | 10,197,000 |   |
| Real                estate - commercial       |   |                                | **29,156,000** |   |   | 10,927,000 |   |
| Real                estate - construction     |   |                                | **14,999,000** |   |   | 9,297,000 |   |
| Real                estate - mortgage         |   |                                | **13,293,000** |   |   | 10,238,000 |   |
| Consumer                installment and other |   |                                | **2,420,458**  |   |   | 1,703,532 |   |
|                                          |   |                                | **64,571,458** |   |   | 42,362,532 |   |
| Deferred                loan fees             |   |                                | **(77,496**    | **)** |   | (66,459 | ) |
| Allowance                for loan losses      |   |                                | **(900,123**   | **)** |   | (538,665 | ) |
| Loans,                net                     |   | $                                   | **63,593,839** |   | $ | 41,757,408 |   |

|                                                      |   | **December                31,** |        |
|-----------------------------------------------------------|--------|---------------------------------|-------------|
|                                                      |   | **2005**                        |        | 2004 |   |
|                                                      |   |                            |        |   |   |
| Balance,                beginning of year                 |   | **$**                           | **538,665** |   | $ | 271,000 |   |
| Provision                for loan losses                  |   |                            | **396,000** |   |   | 302,500 |   |
| Loans                charged off                          |   |                            | **(37,646** | **)** |   | (34,835 | ) |
| Recoveries                of loans previously charged off |   |                            | **3,104**   |   |   | - |   |
| Balance,                end of year                       |   | **$**                           | **900,123** |   | $ | 538,665 |   |

|                                                                       |   | **December                31,** |        |
|----------------------------------------------------------------------------|--------|---------------------------------|-------------|
|                                                                       |   | **2005**                        |        | 2004 |   |
|                                                                       |   |                            |        |   |   |
| Impaired                loans without a valuation allowance                |   | **$**                           | **17,133**  |   | $ | 22,119 |   |
| Impaired                loans with a valuation allowance                   |   |                            | **-**       |   |   | - |   |
| Total                impaired loans                                        |   | **$**                           | **17,133**  |   | $ | 22,119 |   |
| Valuation                allowance related to impaired loans               |   | $                               | -           |   | $ | - |   |
| Total                nonaccrual loans                                      |   | **$**                           | **17,133**  |   | $ | 22,119 |   |
| Total                loans past due ninety days or more and still accruing |   | **$**                           | **195,808** |   | $ | 20,050 |   |

|                                                                        |   | **For                the Year Ended December 31,** |       |
|-----------------------------------------------------------------------------|--------|----------------------------------------------------|------------|
|                                                                        |   |                                               | **2005**   |   |   | 2004 |   |
|                                                                        |   |                                               |       |   |   |   |   |
| Average                investment in impaired loans                         |   | $                                                  | **32,780** |   | $ | 54,416 |   |
| Interest                income recognized on impaired loans                 |   | $                                             | -          |   | $ | - |   |
| Interest                income recognized on a cash basis on impaired loans |   | $                                             | -          |   | $ | - |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **NOTE                  3.** | **LOANS                    (Continued)** |
|------------------------------|------------------------------------------|

| Balance,                beginning of year |   | $      | 3,659,236  |   |
|-------------------------------------------|--------|--------|------------|--------|
| Advances                                  |   |   | 1,444,026  |   |
| Repayments                                |   |   | (2,213,221 | )      |
| Balance,                end of year       |   | $      | 2,890,041  |   |

| **NOTE                4.** | **PREMISES                AND EQUIPMENT** |
|----------------------------|-------------------------------------------|

|                                    |   | **Decem****ber                31,** |          |
|-----------------------------------------|--------|-------------------------------------|---------------|
|                                    |   | **2005**                            |          | 2004 |   |
|                                    |   |                                |          |   |   |
| Land                improvements        |   | **$**                               | **631,412**   |   | $ | 527,290 |   |
| Buildings                               |   |                                | **2,108,866** |   |   | 1,966,073 |   |
| Furniture                and equipment  |   |                                | **912,687**   |   |   | 657,113 |   |
| Construction                in process  |   |                                | **-**         |   |   | 50,497 |   |
|                                    |   |                                | **3,652,965** |   |   | 3,200,973 |   |
| Accumulated                depreciation |   |                                | **(339,245**  | **)** |   | (153,612 | ) |
|                                    |   | **$**                               | **3,313,720** |   | $ | 3,047,361 |   |

**Leases**

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **NOTE                  4.** | **PREMISES                    AND EQUIPMENT                    (Continued)** |
|------------------------------|------------------------------------------------------------------------------|

**Leases      (Continued)**

| 2006       |   | $      | 139,172   |   |
|------------|--------|--------|-----------|--------|
| 2007       |   |   | 137,522   |   |
| 2008       |   |   | 90,781    |   |
| 2009       |   |   | 44,040    |   |
| 2010       |   |   | 44,040    |   |
| Thereafter |   |   | 965,210   |   |
|       |   | $      | 1,420,765 |   |

| **NOTE                5.** | **DEPOSITS** |
|----------------------------|--------------|

| 2006   |   | $      | 29,945,245 |   |
|--------|--------|--------|------------|--------|
| 2007   |   |   | 9,410,602  |   |
| 2008   |   |   | 848,050    |   |
| 2009   |   |   | 52,648     |   |
| 2010   |   |   | 56,833     |   |
|   |   | $      | 40,313,378 |   |

| **NOTE                6.** | **OTHER                BORROWINGS** |
|----------------------------|-------------------------------------|

|                                                                                                                                                                                                                                          |   | **Decemb****er                  31,** |          |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|---------------|
|                                                                                                                                                                                                                                          |   | **2005**                              |          | 2004 |   |
|                                                                                                                                                                                                                                          |   |                                  |          |   |   |
| Federal                  Home Loan Bank advance with interest due monthly                  at a daily variable interest rate (4.44% at December 31, 2005).                  Principal                  is due at maturity on August 23, 2006. |   | **$**                                 | **4,400,000** |   | $ |       |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **NOTE                7.** | **EMPLOYEE                AND DIRECTOR BENEFITS** |
|----------------------------|---------------------------------------------------|

**Stock      Options**

|                                                                          |   | **2005**   |        | 2004                                                   |   |
|-------------------------------------------------------------------------------|--------|------------|-------------|--------------------------------------------------------|--------|
|                                                                          |   | **Number** |        | **Weighted-****Average                Exercise Price** |   | Number |   | Weighted-                Average                Exercise                Price |   |
|                                                                          |   |       |        |                                                   |   |   |   |   |   |
| Options                outstanding, beginning of year                         |   |       | **55,846**  |                                                   | **$**  | **10.00** |   |   | 55,846 |   | $ | 10.00 |   |
| Granted                                                                       |   |       | **38,000**  |                                                   |   | **11.32** |   |   | - |   |   | . |   |
| Exercised                                                                     |   |       | **-**       |                                                   |   | **-** |   |   | - |   |   | - |   |
| Forfeited                                                                     |   |       | **(20,000** | **)**                                                  |   | **10.00** |   |   | - |   |   | - |   |
| Options                outstanding, end of year                               |   |       | **73,846**  |                                                   | **$**  | **10.68** |   |   | 55,846 |   | $ | 10.00 |   |
|                                                                          |   |       |        |                                                   |   |   |   |   |   |   |   |   |   |
| Exercisable,                end of year                                       |   |       | **27,230**  |                                                   | **$**  | **10.00** |   |   | 18,615 |   | $ | 10.00 |   |
|                                                                          |   |       |        |                                                   |   |   |   |   |   |   |   |   |   |
| Weighted-average                fair value of options granted during the year |   |       |        |                                                   | $      | **3.83** |   |   |   |   | $ | - |   |
|                                                                          |   |       |        |                                                   |   |   |   |   |   |   |   |   |   |
| Weighted-average                remaining contractual life in years           |   |       |        |                                                   |   | **8.4** |   |   |   |   |   | 8.5 |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| NO**TE                7.** | **EMPLOYEE                AND DIRECTOR BENEFITS                (Continued)** |
|----------------------------|------------------------------------------------------------------------------|

**Stock      Warrants**

|                                                                           |   | **2005**   |        | 2004                                                   |        |
|--------------------------------------------------------------------------------|--------|------------|-------------|--------------------------------------------------------|-------------|
|                                                                           |   | **Number** |        | **Weighted-****Average                Exercise Price** |        | Number |   | Weighted-                Average                Exercise                Price |   |
|                                                                           |   |       |        |                                                   |        |   |   |   |   |
| Warrants                outstanding, beginning of year                         |   |       | **220,156** |                                                   | **$**       | **10.00** |   |   | 220,156 |   | $ | 10.00 |   |
| Granted                                                                        |   |       | **-**       |                                                   |        | **-** |   |   | - |   |   | - |   |
| Exercised                                                                      |   |       | **-**       |                                                   |        | **-** |   |   | - |   |   | - |   |
| Warrants                outstanding, end of year                               |   |       | **220,156** |                                                   | **$**       | **10.00** |   |   | 220,156 |   | $ | 10.00 |   |
|                                                                           |   |       |        |                                                   |        |   |   |   |   |   |   |   |   |
| Exercisable,                end of year                                        |   |       | **146,767** |                                                   | **$**       | **10.00** |   |   | 73,385 |   | $ | 10.00 |   |
|                                                                           |   |       |        |                                                   |        |   |   |   |   |   |   |   |   |
| Weighted-average                fair value of warrants granted during the year |   |       |        |                                                   | **$**  | -  |   |   |   |   | $ | - |   |
|                                                                           |   |       |        |                                                   |        |   |   |   |   |   |   |   |   |
| Weighted-average                remaining contractual life in years            |   |       |        |                                                   |        | **7.0** |   |   |   |   |   | 8.0 |   |

|                                                          |   | **Op****tions                and Warra****nts****Outstanding** |    | **Options                and Warrants Exercsisable**         |   |
|---------------------------------------------------------------|--------|----------------------------------------------------------------|---------|--------------------------------------------------------------|--------|
| **Range                of****Exercise                Prices** |   | **Number****Outstanding**                                      |    | **Weighted-****Average****Remaining****Contractual****Life** |   | **Weighted-****Average****Exercise****Price** |   | **Number****Exercisable** |   | **Weighted-****Average                Exercise Price** |   |
|                                                          |   |                                                           |    |                                                         |   |   |   |   |   |   |   |
| $10.00-$                12.00                                 |   |                                                           | 294,002 |                                                         |   | 7.3                years |   | $ | 10.17 |   |   | 173,997 |   | $ | 10.00 |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **NOTE                7.** | **EMPLOYEE                AND DIRECTOR BENEFITS                (Continued)** |
|----------------------------|------------------------------------------------------------------------------|

**Stock      Warrants (Continued)**

|                                   |   | **2005** |                        | 2004   |   |
|----------------------------------------|--------|----------|-----------------------------|--------|--------|
|                                   |   |     |                        |   |   |
| Dividend                yield          |   |     | **N/A**                     |   |   | N/A |   |
| Expected                life           |   |     | **10                years** |   |   | N/A |   |
| Expected                volatility     |   |     | **N/A**                     |   |   | N/A |   |
| Risk-free                interest rate |   |     | **4.24**                    | **%**  |   | N/A |   |

**Profit      Sharing Plan**

| **NOTE                8.** | **INCOME                TAXES** |
|----------------------------|---------------------------------|

|                                         |   | **Years                Ended****December                31,** |         |
|----------------------------------------------|--------|---------------------------------------------------------------|--------------|
|                                         |   | **2005**                                                      |         | 2004 |   |
|                                         |   |                                                          |         |   |   |
| Current                                      |   | **$**                                                         | **52,128**   |   | $ | (215,580 | ) |
| Deferred                                     |   |                                                          | **(109,736** | **)** |   | 21,581 |   |
| Change                in valuation allowance |   |                                                          | **57,608**   |   |   | 193,999 |   |
| Income                taxes                  |   | $                                                             | -            |   | $ | - |   |

|                                                          |   | **Years                Ended****December                31,** |        |
|---------------------------------------------------------------|--------|---------------------------------------------------------------|-------------|
|                                                          |   | **2005**                                                      |        | 2004 |   |
|                                                          |   |                                                          |        |   |   |
| Income                tax (benefit) at federal statutory rate |   | **$**                                                         | **(52,266** | **)** | $ | (171,986 | ) |
| State                tax (benefit)                            |   |                                                          | **(5,703**  | **)** |   | (22,509 | ) |
| Other                                                         |   |                                                          | **361**     |   |   | 496 |   |
| Change                in valuation allowance                  |   |                                                          | **57,608**  |   |   | 193,999 |   |
| Income                taxes                                   |   | $                                                        | -           |   | $ | - |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **NOTE                8.** | **INCOME                TAXES (Continued)** |
|----------------------------|---------------------------------------------|

|                                                |   | **December                31,** |          |
|-----------------------------------------------------|--------|---------------------------------|---------------|
|                                                |   | **2005**                        |          | 2004 |   |
| Deferred                income tax assets:          |   |                            |          |   |   |
| Loan                loss reserves                   |   | **$**                           | **268,477**   |   | $ | 126,548 |   |
| Preopening                and organization expenses |   |                            | **50,335**    |   |   | 94,721 |   |
| Net                operating loss carryforward      |   |                            | **669,679**   |   |   | 721,806 |   |
| Securities                available for sale        |   |                            | **31,958**    |   |   | 20,242 |   |
| Deferred                fees                        |   |                            | **29,244**    |   |   | 25,079 |   |
| Contributions                                       |   |                            | **3,858**     |   |   | 2,380 |   |
|                                                |   |                            | **1,053,551** |   |   | 990,776 |   |
|                                                |   |                            |          |   |   |   |   |
| Valuation                allowance                  |   |                            | **(963,994**  | **)** |   | (894,670 | ) |
|                                                |   |                            | **89,557**    |   |   | 96,106 |   |
|                                                |   |                            |          |   |   |   |   |
| Deferred                income tax liabilities:     |   |                            |          |   |   |   |   |
| Depreciation                                        |   |                            | **89,557**    |   |   | 96,106 |   |
|                                                |   |                            | **89,557**    |   |   | 96,106 |   |
|                                                |   |                            |          |   |   |   |   |
| Net                deferred income taxes            |   | $                          | -             |   | $ | - |   |

| **NOTE                9.** | **COMMITMENTS                AND CONTINGENCIES** |
|----------------------------|--------------------------------------------------|

**Loan      Commitments**

|                                         |   | **December                31,** |          |
|----------------------------------------------|--------|---------------------------------|---------------|
|                                         |   | **2005**                        |          | 2004 |   |
|                                         |   |                            |          |   |   |
| Commitments                to extend credit  |   | $                               | **7,517,000** |   | $ | 5,984,000 |   |
| Performance                letters of credit |   |                            | **111,000**   |   |   | 55,000 |   |
|                                         |   | $                               | **7,628,000** |   | $ | 6,039,000 |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **NOTE                9.** | **COMMITMENTS                AND CONTINGENCIES                (Continued)** |
|----------------------------|-----------------------------------------------------------------------------|

**Loan      Commitments (Continued)**

**Contingencies**

| **NOTE                10.** | **CONCENTRATIONS                OF CREDIT** |
|-----------------------------|---------------------------------------------|

| **NOTE                11.** | **REGULATORY                MATTERS** |
|-----------------------------|---------------------------------------|

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **NOTE                11.** | **REGULATORY                MATTERS (Continued)** |
|-----------------------------|---------------------------------------------------|

|                                                      |   | **Actu****al**                                    |      | **For                Ca****pital****Adequ****acy****Purpo****ses** |   | **To                Be Well****Capitalized****Under****Prompt                Cor****rective****Action                Pro****visions** |   |
|-----------------------------------------------------------|--------|---------------------------------------------------|-----------|--------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                      |   | **Amount**                                        |      | **Ratio**                                                          |   | **Amount**                                                                                                                            |   | **Ratio** |   | **Amount** |   | **Ratio** |   |
|                                                      |   | **(****Dollars                in Th****ousands)** |      |
|                                                      |   |                                              |      |                                                               |   |                                                                                                                                  |   |   |   |   |   |   |   |
| **December                31, 2005:**                     |   |                                              |      |                                                               |   |                                                                                                                                  |   |   |   |   |   |   |   |
| **Total                Capital to Risk Weighted Assets**  |   | **$**                                             | **7,804** |                                                               |   | **11.96**                                                                                                                             | **%**  | **$** | **5,220** |   |   | **8** | **%** | **$** | **6,525** |   |   | **10** | **%** |
| **Tier                I Capital to Risk Weighted Assets** |   | **$**                                             | **6,904** |                                                               |   | **10.58**                                                                                                                             | **%**  | **$** | **2,610** |   |   | **4** | **%** | **$** | **3,915** |   |   | **6** | **%** |
| **Tier                I Capital to Average Assets**       |   | **$**                                             | **6,904** |                                                               |   | **9.12**                                                                                                                              | **%**  | **$** | **3,027** |   |   | **4** | **%** | **$** | **3,784** |   |   | **5** | **%** |
|                                                      |   |                                              |      |                                                               |   |                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December                31, 2004:                         |   |                                              |      |                                                               |   |                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                Capital to Risk Weighted Assets      |   | $                                                 | 7,047     |                                                               |   | 16.13                                                                                                                                 | %      | $ | 3,496 |   |   | **8** | **%** | $ | 4,370 |   |   | 10 | % |
| Tier                I Capital to Risk Weighted Assets     |   | $                                                 | 6,508     |                                                               |   | 14.89                                                                                                                                 | %      | $ | 1,748 |   |   | **4** | **%** | $ | 2,622 |   |   | 6 | % |
| Tier                I Capital to Average Assets           |   | $                                                 | 6,508     |                                                               |   | 12.05                                                                                                                                 | %      | $ | 2,161 |   |   | **4** | **%** | $ | 2,701 |   |   | 5 | % |

| **NOTE                12** | **FAIR                VALUE OF FINANCIAL                INSTRUMENTS** |
|----------------------------|-----------------------------------------------------------------------|

*Disclosures      about Fair Values of Financial Instruments, *

**Cash,      Due From Banks, Interest-Bearing Deposits in Banks, and Federal Funds Sold:      **

**Securities:      **

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **NOTE                12.** | **FAIR                VALUE OF FINANCIAL INSTRUMENTS                (Continued)** |
|-----------------------------|-----------------------------------------------------------------------------------|

**Loans:      **

**Deposits:      **

**Other      Borrowings: **

**Accrued      Interest: **

**Off-Balance      Sheet Instruments: **

|                                                                                                           |   | **Decemb****er                31,** |           |
|----------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|----------------|
|                                                                                                           |   | **2005**                            |           | 2004 |   |
|                                                                                                           |   | **Carrying                Amount**  |           | **Fair                Value** |   | Carrying                Amount |   | Fair                Value |   |
|                                                                                                           |   |                                |           |   |   |   |   |   |   |
| Financial                assets:                                                                               |   |                                |           |   |   |   |   |   |   |
| Cash,                due from banks, interest-bearing                deposits in banks, and federal funds sold |   | **$**                               | **1,729,147**  |   | **$** | **1,729,147** |   | $ | 2,750,205 |   | $ | 2,750,205 |   |
| Securities                available for sale                                                                   |   |                                | **6,176,439**  |   |   | **6,176,439** |   |   | 6,616,962 |   |   | 6,616,962 |   |
| Restricted                equity securities                                                                    |   |                                | **334,200**    |   |   | **334,200** |   |   | 75,700 |   |   | 75,700 |   |
| Loans,                net                                                                                      |   |                                | **63,593,839** |   |   | **64,338,208** |   |   | 41,757,408 |   |   | 42,144,941 |   |
| Accrued                interest receivable                                                                     |   |                                | **477,599**    |   |   | **477,599** |   |   | 271,477 |   |   | 271,477 |   |
|                                                                                                           |   |                                |           |   |   |   |   |   |   |   |   |   |   |
| Financial                liabilities:                                                                          |   |                                |           |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                                                       |   |                                | **63,891,610** |   |   | **63,473,736** |   |   | 47,779,966 |   |   | 48,073,811 |   |
| Other                borrowings                                                                                |   |                                | **4,400,000**  |   |   | **4,400,000** |   |   | - |   |   | - |   |
| Accrued                interest payable                                                                        |   |                                | **217,356**    |   |   | **217,356** |   |   | 90,090 |   |   | 90,090 |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **NOTE                13.** | **SUPPLEMENTAL                FINANCIAL DATA** |
|-----------------------------|------------------------------------------------|

|                                                           |   | **Years                Ended December 31,** |        |
|----------------------------------------------------------------|--------|---------------------------------------------|-------------|
|                                                           |   | **2005**                                    |        | 2004 |   |
|                                                           |   |                                        |        |   |   |
| **Other                expenses:**                             |   |                                        |        |   |   |
| Advertising,                promotion and business development |   | **$**                                       | **76,748**  |   | $ | 58,149 |   |
| Printing                and office supplies                    |   |                                        | **72,321**  |   |   | 57,228 |   |
| Data                processing                                 |   |                                        | **164,864** |   |   | 129,106 |   |
| Legal                and professional                          |   |                                        | **171,421** |   |   | 91,494 |   |
| Telephone                                                      |   |                                        | **44,223**  |   |   | 33,088 |   |
| Other                consulting services                       |   |                                        | **63,402**  |   |   | 29,389 |   |
| Visa                debit and credit card fees                 |   |                                        | **48,756**  |   |   | 71,202 |   |

| **NOTE                14.** | **PARENT                COMPANY FINANCIAL                INFORMATION** |
|-----------------------------|------------------------------------------------------------------------|

**CONDENSED      BALANCE SHEETS**

|                                    |   | **2005** |          | 2004   |   |
|-----------------------------------------|--------|----------|---------------|--------|--------|
| **Assets**                              |   |     |          |   |   |
| Cash                                    |   | **$**    | **254,189**   |   | $      | 155,046 |   |
| Investment                in subsidiary |   |     | **6,820,143** |   |   | 6,454,478 |   |
| Miscellaneous                assets     |   |     | **66,279**    |   |   | - |   |
| **Total                assets**         |   | **$**    | **7,140,611** |   | $      | 6,609,524 |   |
|                                    |   |     |          |   |   |   |   |
| **Stockholders'                equity** |   | **$**    | **7,140,611** |   | $      | 6,609,524 |   |

**CONDENSED      STATEMENTS OF OPERATIONS**

|                                                            |   | **2005** |         | 2004   |   |
|-----------------------------------------------------------------|--------|----------|--------------|--------|--------|
|                                                            |   |     |         |   |   |
| **Expenses,                other**                              |   | **$**    | **50,222**   |   | $      | 42,311 |   |
|                                                            |   |     |         |   |   |   |   |
| **Loss                before losses of subsidiary**             |   |     | **(50,222**  | **)**  |   | (42,311 | ) |
|                                                            |   |     |         |   |   |   |   |
| **Equity                in undistributed losses of subsidiary** |   |     | **(103,502** | **)**  |   | (463,530 | ) |
|                                                            |   |     |         |   |   |   |   |
| **Net                loss**                                     |   | **$**    | **(153,724** | **)**  | $      | (505,841 | ) |

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**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

| **NOTE                14.** | **PARENT                COMPANY FINANCIAL INFORMATION                (Continued)** |
|-----------------------------|------------------------------------------------------------------------------------|

**CONDENSED      STATEMENTS OF CASH FLOWS**

|                                                                                                      |   | **2005** |         | 2004   |   |
|-----------------------------------------------------------------------------------------------------------|--------|----------|--------------|--------|--------|
| **OPERATING                ACTIVITIES**                                                                   |   |     |         |   |   |
| Net                loss                                                                                   |   | **$**    | **(153,724** | **)**  | $      | (505,841 | ) |
| Adjustments                to reconcile net loss to net cash used in operating                activities: |   |     |         |   |   |   |   |
| Equity                in undistributed losses of subsidiary                                               |   |     | **103,502**  |   |   | 463,530 |   |
| Net                other operating activities                                                             |   |     | **(66,279**  | **)**  |   | - |   |
|                                                                                                      |   |     |         |   |   |   |   |
| **Net                cash used in operating activities**                                                  |   |     | **(116,501** | **)**  |   | (42,311 | ) |
|                                                                                                      |   |     |         |   |   |   |   |
| **INVESTING                ACTIVITIES**                                                                   |   |     |         |   |   |   |   |
| Investment                in common stock of subsidiary                                                   |   |     | **(500,000** | **)**  |   | (500,000 | ) |
|                                                                                                      |   |     |         |   |   |   |   |
| **Net                cash used in investing activities**                                                  |   |     | **(500,000** | **)**  |   | (500,000 | ) |
|                                                                                                      |   |     |         |   |   |   |   |
| **FINANCING                ACTIVITIES**                                                                   |   |     |         |   |   |   |   |
| Proceeds                from sale of common stock                                                         |   |     | **715,644**  |   |   | - |   |
|                                                                                                      |   |     |         |   |   |   |   |
| **Net                cash provided by financing activities**                                              |   |     | **715,644**  |   |   | - |   |
|                                                                                                      |   |     |         |   |   |   |   |
| Net                increase (decrease) in cash                                                            |   |     | **99,143**   |   |   | (542,311 | ) |
|                                                                                                      |   |     |         |   |   |   |   |
| Cash                at beginning of year                                                                  |   |     | **155,046**  |   |   | 697,357 |   |
|                                                                                                      |   |     |         |   |   |   |   |
| Cash                at end of year                                                                        |   | **$**    | **254,189**  |   | $      | 155,046 |   |

| **NOTE              15.** | **STOCK                OFFERING** |
|---------------------------|-----------------------------------|

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