##### 



U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549


FORM 10-QSB


|  |  |                                                                                  
|- |  | ---------------------------------------------------------------------------------
|x |  | Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended
June 30, 2003

|  |  |                                                                                 
|- |  | --------------------------------------------------------------------------------
|o |  | Transition Report Pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period of
________________to ________________

Commission File Number 0-22891.

GEORGIA-CAROLINA BANCSHARES, INC.




(Exact name of small business issuer as specified in its charter)


|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Georgia                                                        |  | 58-2326075                             
|                                                               |  |                                        
|(State or other Jurisdiction of
Incorporation or Organization) |  | (I.R.S. Employer Identification Number)

2805 Wrightsboro Road, Augusta, Georgia 30909




(Address of Principal Executive
Offices)


Issuers Telephone Number (706) 736-2100



---

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Year)


Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

YES     x      NO
    o

State the number of shares outstanding of each of the issuers classes of
common equity, as of the latest practicable date.

|                              |  |                               
|----------------------------- |  | ------------------------------
|Class                         |  | Outstanding at August 13, 2003
|                              |  |                               
|Common Stock, $.001 Par Value |  | 1,315,693 shares              

Transitional
Small Business Disclosure Format: YES     o    NO   
x





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##### 



GEORGIA-CAROLINA BANCSHARES, INC.
Form 10-QSB

Index

|        |  |                                                                                       |  |                                                                                                                                                              |    |  |   | 
|------- |  | ------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------ | -- |  | - | 
|PART I  |  | FINANCIAL INFORMATION                                                                 |  |                                                                                                                                                              |    | 
|Item 1. |  | Financial Statements (Unaudited)                                                      |  |                                                                                                                                                              |    | 
|        |  |                                                                                       |  | Condensed Consolidated Balance Sheets as of June 30, 2003
and December 31, 2002                                                                              |    |  | 3 | 
|        |  |                                                                                       |  | Condensed Consolidated Statements of Income for the Three
Months Ended June 30, 2003 and 2002, and the Six Months
Ended June 30, 2003 and 2002               |    |  | 4 | 
|        |  |                                                                                       |  | Condensed Consolidated Statements of Comprehensive
Income for the Three Months Ended June 30, 2003 and 2002,
and the Six Months Ended June 30, 2003 and 2002 |    |  | 5 | 
|        |  |                                                                                       |  | Condensed Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 2003 and 2002                                                              |    |  | 6 | 
|        |  |                                                                                       |  | Notes to Condensed Consolidated Financial Statements                                                                                                         |    |  | 7 | 
|Item 2. |  | Managements Discussion and Analysis of Financial Condition and
Results of Operations |  |                                                                                                                                                              | 10 | 
|Item 3. |  | Controls and Procedures                                                               |  |                                                                                                                                                              | 14 | 
|PART II |  | OTHER INFORMATION                                                                     |  |                                                                                                                                                              |    | 
|Item 4. |  | Submission of Matters to a Vote of Security Holders                                   |  |                                                                                                                                                              | 15 | 
|Item 6. |  | Exhibits and Reports on Form 8-K                                                      |  |                                                                                                                                                              | 16 | 
|        |  |                                                                                       |  | SIGNATURES                                                                                                                                                   |    |  |   | 
|        |  |                                                                                       |  | EXHIBIT INDEX                                                                                                                                                |    |  |   | 

2



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##### 



Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

GEORGIA-CAROLINA BANCSHARES, INC.

Condensed Consolidated Balance Sheets
(Unaudited)(dollars in thousands)

|                                                    |                                                                                                                   |                                    |                   |                                            |        |          |         |              |        |         |         | 
|--------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------- | ---------------------------------- | ----------------- | ------------------------------------------ | ------ | -------- | ------- | ------------ | ------ | ------- | ------- | 
|                                                    |                                                                                                                   |                                    |                   |                                            |        | June 30, |         | December 31,
|                                                    |                                                                                                                   |                                    |                   |                                            |        |          |         |             
|                                                    |                                                                                                                   |                                    |                   |                                            |        | 2003     |         | 2002        
|                                                    |                                                                                                                   |                                    |                   |                                            |        |          |         |             
|ASSETS                                              |                                                                                                                   |                                    |                   |                                            |        |          |         |             
|Cash and due from banks                             |                                                                                                                   | $                                  | 9,260             |                                            |        | $        | 7,520   |             
|Federal funds sold                                  |                                                                                                                   |                                    |                  |                                            |        |          | 507     |             
|Securities available-for-sale                       |                                                                                                                   |                                    | 30,058            |                                            |        |          | 27,346  |             
|Loans, net of allowance for loan losses             |                                                                                                                   |                                    | 153,613           |                                            |        |          | 142,934 |             
|Loans, held for sale                                |                                                                                                                   |                                    | 99,795            |                                            |        |          | 67,927  |             
|Bank premises and fixed assets                      |                                                                                                                   |                                    | 7,225             |                                            |        |          | 7,171   |             
|Accrued interest receivable                         |                                                                                                                   |                                    | 1,214             |                                            |        |          | 1,245   |             
|Foreclosed real estate, net of allowance            |                                                                                                                   |                                    | 532               |                                            |        |          | 305     |             
|Deferred tax asset, net                             |                                                                                                                   |                                    | 351               |                                            |        |          | 449     |             
|Federal Home Loan Bank Stock                        |                                                                                                                   |                                    | 2,132             |                                            |        |          | 1,570   |             
|Other assets                                        |                                                                                                                   |                                    | 834               |                                            |        |          | 388     |             
|                                                    |                                                                                                                   |                                    |                   |                                            |        |          |         |             
|                                                    |                                                                                                                   |                                    | Total assets      |                                            | $      | 305,014  |         |              | $      | 257,362 |        
|                                                    |                                                                                                                   |                                    |                   |                                            |        |          |         |             
|LIABILITIES AND SHAREHOLDERS EQUITY                |                                                                                                                   |                                    |                   |                                            |        |          |         |             
|Deposits                                            |                                                                                                                   |                                    |                   |                                            |        |          |         |             
|                                                    | Non-interest bearing                                                                                              |                                    | $                 | 42,350                                     |        |          | $       | 22,512       |       
|                                                    | Interest-bearing:                                                                                                 |                                    |                   |                                            |        |          |         |              |       
|                                                    |                                                                                                                   | NOW accounts                       |                   |                                            | 30,943 |          |         |              | 22,703 |        
|                                                    |                                                                                                                   | Savings                            |                   |                                            | 47,100 |          |         |              | 30,763 |        
|                                                    |                                                                                                                   | Money market accounts              |                   |                                            | 11,632 |          |         |              | 11,665 |        
|                                                    |                                                                                                                   | Time deposits of $100,000 and over |                   |                                            | 38,885 |          |         |              | 48,709 |        
|                                                    |                                                                                                                   | Other time deposits                |                   |                                            | 62,846 |          |         |              | 65,267 |        
|                                                    |                                                                                                                   |                                    |                   |                                            |        |          |         |             
|                                                    |                                                                                                                   |                                    | Total deposits    |                                            |        | 233,756  |         |              |        | 201,619 |        
|Other liabilities, borrowings and retail agreements |                                                                                                                   |                                    | 51,983            |                                            |        |          | 38,848  |             
|                                                    |                                                                                                                   |                                    |                   |                                            |        |          |         |             
|                                                    |                                                                                                                   |                                    | Total liabilities |                                            |        | 285,739  |         |              |        | 240,467 |        
|                                                    |                                                                                                                   |                                    |                   |                                            |        |          |         |             
|Shareholders equity                                |                                                                                                                   |                                    |                   |                                            |        |          |         |             
|                                                    | Preferred stock, par value $.001; 1,000,000 shares authorized;
none issued                                        |                                    |                   |                                           |        |          |         |             |       
|                                                    | Common stock, par value $.001; 9,000,000 shares authorized;
1,310,975 and 1,307,790 shares issued and outstanding |                                    |                   | 1                                          |        |          |         | 1            |       
|                                                    | Additional paid-in-capital                                                                                        |                                    |                   | 13,364                                     |        |          |         | 13,294       |       
|                                                    | Retained Earnings                                                                                                 |                                    |                   | 5,437                                      |        |          |         | 3,196        |       
|                                                    | Accumulated other comprehensive income                                                                            |                                    |                   | 473                                        |        |          |         | 404          |       
|                                                    |                                                                                                                   |                                    |                   |                                            |        |          |         |             
|                                                    |                                                                                                                   |                                    |                   | Total shareholders equity                 |        |          | 19,275  |              |        |         | 16,895  | 
|                                                    |                                                                                                                   |                                    |                   |                                            |        |          |         |             
|                                                    |                                                                                                                   |                                    |                   | Total liabilities and shareholders equity |        | $        | 305,014 |              |        | $       | 257,362 | 
|                                                    |                                                                                                                   |                                    |                   |                                            |        |          |         |             

See Notes to Consolidated Financial Statements.

3



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##### 



GEORGIA-CAROLINA BANCSHARES, INC.

Condensed Consolidated Statements of Income
(Unaudited)(dollars in thousands, except per share amounts)

|                                     |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |       |       | 
|------------------------------------ | ------------------------------------------------ | --------------------------------------------------- | ----- | ------------------ | ----- | ---------------- | ----- | ----- | ----- | ---- | ----- | ----- | ----- | - | ----- | ----- | ----- | 
|                                     |                                                  |                                                     |       | Three Months Ended |       | Six Months Ended
|                                     |                                                  |                                                     |       | June 30,           |       | June 30,        
|                                     |                                                  |                                                     |       |                    |       |                 
|                                     |                                                  |                                                     |       | 2003               |       | 2002             |       | 2003  |       | 2002
|                                     |                                                  |                                                     |       |                    |       |                  |       |       |       |     
|Interest income                      |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                     | Interest and fees on loans                       |                                                     | $     | 3,566              |       |                  | $     | 2,795 |       |      | $     | 6,842 |       |   | $     | 5,715 |      
|                                     | Interest on taxable securities                   |                                                     |       | 296                |       |                  |       | 319   |       |      |       | 566   |       |   |       | 628   |      
|                                     | Interest on nontaxable securities                |                                                     |       | 12                 |       |                  |       |      |       |      |       | 22    |       |   |       |      |      
|                                     | Interest on Federal funds sold                   |                                                     |       | 1                  |       |                  |       | 3     |       |      |       | 3     |       |   |       | 5     |      
|                                     |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                     |                                                  | Total interest income                               |       |                    | 3,875 |                  |       |       | 3,117 |      |       |       | 7,433 |   |       |       | 6,348 | 
|                                     |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|Interest expense                     |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                     | Interest on time deposits of $100,000 or more    |                                                     |       | 277                |       |                  |       | 420   |       |      |       | 603   |       |   |       | 811   |      
|                                     | Interest on other deposits                       |                                                     |       | 891                |       |                  |       | 722   |       |      |       | 1,800 |       |   |       | 1,481 |      
|                                     | Interest on funds purchased and other borrowings |                                                     |       | 180                |       |                  |       | 54    |       |      |       | 263   |       |   |       | 221   |      
|                                     |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                     |                                                  | Total interest expense                              |       |                    | 1,348 |                  |       |       | 1,196 |      |       |       | 2,666 |   |       |       | 2,513 | 
|                                     |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                     |                                                  | Net interest income                                 |       |                    | 2,527 |                  |       |       | 1,921 |      |       |       | 4,767 |   |       |       | 3,835 | 
|Provision for loan losses            |                                                  |                                                     | 238   |                    |       |                  | 93    |       |       |      | 415   |       |       |   | 214   |      
|                                     |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                     |                                                  | Net interest income after provision for loan losses |       |                    | 2,289 |                  |       |       | 1,828 |      |       |       | 4,352 |   |       |       | 3,621 | 
|                                     |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|Noninterest income                   |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                     | Service charges on deposits                      |                                                     |       | 187                |       |                  |       | 130   |       |      |       | 334   |       |   |       | 256   |      
|                                     | Other income/loss                                |                                                     |       | 89                 |       |                  |       | 39    |       |      |       | 132   |       |   |       | 80    |      
|                                     | Gain on sale of mortgage loans                   |                                                     |       | 3,748              |       |                  |       | 2,112 |       |      |       | 6,760 |       |   |       | 4,556 |      
|                                     |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                     |                                                  |                                                     | 4,024 |                    |       |                  | 2,281 |       |       |      | 7,226 |       |       |   | 4,892 |      
|                                     |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|Noninterest expense                  |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                     | Salaries and employee benefits                   |                                                     |       | 2,914              |       |                  |       | 1,890 |       |      |       | 5,475 |       |   |       | 3,792 |      
|                                     | Occupancy expenses                               |                                                     |       | 288                |       |                  |       | 267   |       |      |       | 576   |       |   |       | 499   |      
|                                     | Other expenses                                   |                                                     |       | 893                |       |                  |       | 942   |       |      |       | 1,773 |       |   |       | 1,644 |      
|                                     |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                     |                                                  |                                                     | 4,095 |                    |       |                  | 3,099 |       |       |      | 7,824 |       |       |   | 5,935 |      
|                                     |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|Income before income taxes           |                                                  |                                                     | 2,218 |                    |       |                  | 1,010 |       |       |      | 3,754 |       |       |   | 2,578 |      
|                                     |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|Income tax expense                   |                                                  |                                                     | 929   |                    |       |                  | 434   |       |       |      | 1,514 |       |       |   | 997   |      
|                                     |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                     |                                                  | Net income                                          |       | $                  | 1,289 |                  |       | $     | 576   |      |       | $     | 2,240 |   |       | $     | 1,581 | 
|                                     |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|Net income per share of common stock |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                     | Basic                                            |                                                     | $     | 0.98               |       |                  | $     | 0.44  |       |      | $     | 1.71  |       |   | $     | 1.22  |      
|                                     |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                     | Diluted                                          |                                                     | $     | 0.91               |       |                  | $     | 0.41  |       |      | $     | 1.58  |       |   | $     | 1.13  |      
|                                     |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|Dividends per share of common stock  |                                                  | $                                                   |      |                    |       | $                |      |       |       | $    |      |       |       | $ |      |      
|                                     |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |       |      

See Notes to Consolidated Financial Statements.

4



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GEORGIA-CAROLINA BANCSHARES, INC.

Condensed Consolidated Statements of Comprehensive Income
(Unaudited)(dollars in thousands)

|                                                                                                                                                       |  |                    |       |                  |  |      |     |      |  |   |       |  |  |   |       | 
|------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------ | ----- | ---------------- |  | ---- | --- | ---- |  | - | ----- |  |  | - | ----- | 
|                                                                                                                                                       |  | Three Months Ended |       | Six Months Ended
|                                                                                                                                                       |  | June 30,           |       | June 30,        
|                                                                                                                                                       |  |                    |       |                 
|                                                                                                                                                       |  | 2003               |       | 2002             |  | 2003 |     | 2002
|                                                                                                                                                       |  |                    |       |                  |  |      |     |     
|Net income                                                                                                                                             |  | $                  | 1,289 |                  |  | $    | 576 |      |  | $ | 2,240 |  |  | $ | 1,581 | 
|Unrealized holding gains and (losses) arising
during period, less reclassifications adjustment
for gains and losses included in net income,
net of tax |  |                    | 9     |                  |  |      | 262 |      |  |   | 68    |  |  |   | 113   | 
|                                                                                                                                                       |  |                    |       |                  |  |      |     |      |  |   |       |  |  |   |       | 
|Comprehensive income                                                                                                                                   |  | $                  | 1,298 |                  |  | $    | 838 |      |  | $ | 2,308 |  |  | $ | 1,694 | 
|                                                                                                                                                       |  |                    |       |                  |  |      |     |      |  |   |       |  |  |   |       | 

See Notes to Consolidated Financial Statements.

5



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##### 



GEORGIA-CAROLINA BANCSHARES, INC.

Condensed Consolidated Statements of Cash Flows
(Unaudited)(dollars in thousands)

|                                                   |                                                                                             |                                                                 |                                                     |         |                           |         |       |         |        |         |  
|-------------------------------------------------- | ------------------------------------------------------------------------------------------- | --------------------------------------------------------------- | --------------------------------------------------- | ------- | ------------------------- | ------- | ----- | ------- | ------ | ------- | -
|                                                   |                                                                                             |                                                                 |                                                     |         | Six Months Ended June 30,
|                                                   |                                                                                             |                                                                 |                                                     |         |                          
|                                                   |                                                                                             |                                                                 |                                                     |         | 2003                      |         | 2002 
|                                                   |                                                                                             |                                                                 |                                                     |         |                           |         |      
|Cash flows from operating activities               |                                                                                             |                                                                 |                                                     |         |                           |         |       |        
|                                                   | Net income                                                                                  |                                                                 | $                                                   | 2,240   |                           |         | $     | 1,581   |       
|                                                   | Adjustments to reconcile net income
to net cash provided by (used in)
operating activities: |                                                                 |                                                     |         |                           |         |       |         |       
|                                                   |                                                                                             | Depreciation and amortization                                   |                                                     |         | 244                       |         |       |         | 217    |        
|                                                   |                                                                                             | Provision for loan losses                                       |                                                     |         | 415                       |         |       |         | 214    |        
|                                                   |                                                                                             | Net origination, proceeds and
gain on loans originated for sale |                                                     |         | (31,868                   | )       |       |         | 26,339 |        
|                                                   |                                                                                             | Stock compensation                                              |                                                     |         | 72                        |         |       |         | 59     |        
|                                                   |                                                                                             | Deferred income tax                                             |                                                     |         | 56                        |         |       |         | (33    | )      
|                                                   |                                                                                             | Net change in other assets and liabilities                      |                                                     |         | (451                      | )       |       |         | (1,808 | )      
|                                                   |                                                                                             |                                                                 |                                                     |         |                           |         |       |         |       
|                                                   |                                                                                             |                                                                 | Net cash provided by (used in)
operating activities |         |                           | (29,292 | )     |         |        | 26,569  |  
|                                                   |                                                                                             |                                                                 |                                                     |         |                           |         |       |         |       
|Cash flows from investing activities               |                                                                                             |                                                                 |                                                     |         |                           |         |       |        
|                                                   | Decrease in federal funds sold                                                              |                                                                 |                                                     | 507     |                           |         |       | 402     |       
|                                                   | Loan originations and collections, net                                                      |                                                                 |                                                     | (11,403 | )                         |         |       | (13,475 | )     
|                                                   | Purchases of available-for-sale and other securities                                        |                                                                 |                                                     | (9,761  | )                         |         |       | (5,675  | )     
|                                                   | Proceeds from maturities, sales, and calls of
available-for-sale securities                 |                                                                 |                                                     | 6,597   |                           |         |       | 2,496   |       
|                                                   | Proceeds from sale of foreclosed real estate                                                |                                                                 |                                                     | 79      |                           |         |       |        |       
|                                                   | Net additions to premises and equipment                                                     |                                                                 |                                                     | (298    | )                         |         |       | (905    | )     
|                                                   |                                                                                             |                                                                 |                                                     |         |                           |         |       |         |       
|                                                   |                                                                                             |                                                                 | Net cash provided by (used in)
investing activities |         |                           | (14,279 | )     |         |        | (17,157 | )
|                                                   |                                                                                             |                                                                 |                                                     |         |                           |         |       |         |       
|Cash flows from financing activities               |                                                                                             |                                                                 |                                                     |         |                           |         |       |        
|                                                   | Net increase (decrease) in deposits and
funds purchased                                     |                                                                 |                                                     | 45,311  |                           |         |       | (4,396  | )     
|                                                   |                                                                                             |                                                                 |                                                     |         |                           |         |       |         |       
|                                                   |                                                                                             |                                                                 | Net cash provided by (used in)
financing activities |         |                           | 45,311  |       |         |        | (4,396  | )
|                                                   |                                                                                             |                                                                 |                                                     |         |                           |         |       |         |       
|Net increase (decrease) in cash and due from
banks |                                                                                             |                                                                 | 1,740                                               |         |                           |         | 5,016 |        
|Cash and due from banks at beginning of period     |                                                                                             |                                                                 | 7,520                                               |         |                           |         | 3,316 |        
|                                                   |                                                                                             |                                                                 |                                                     |         |                           |         |       |         |       
|Cash and due from banks at end of period           |                                                                                             | $                                                               | 9,260                                               |         |                           | $       | 8,332 |        
|                                                   |                                                                                             |                                                                 |                                                     |         |                           |         |       |         |       

See Notes to Consolidated Financial Statements.

6



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GEORGIA-CAROLINA BANCSHARES, INC.

Notes to Condensed Consolidated Financial Statements
June 30, 2003
(Unaudited)

Note 1  Basis of presentation

The accompanying condensed consolidated financial statements include the
accounts of Georgia-Carolina Bancshares, Inc. (the Company) and its wholly
owned subsidiary, First Bank of Georgia (the Bank). Significant intercompany
transactions and accounts are eliminated in consolidation.

The financial statements as of June 30, 2003 and for the six months and three
months ended June 30, 2003 and 2002 are unaudited and have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles
generally accepted in the United States have been condensed or omitted pursuant
to such rules and regulations. These condensed consolidated financial
statements should be read in conjunction with the audited financial statements
and notes thereto included in the Companys Annual Report on Form 10-KSB for
the year ended December 31, 2002.

The financial information included herein reflects all adjustments (consisting
of normal recurring adjustments) which are, in the opinion of management,
necessary to a fair presentation of the financial position and results of
operations for interim periods.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.

The determination of the adequacy of the allowance for loan losses is based on
estimates that are particularly susceptible to significant changes in the
economic environment and market conditions. In connection with the
determination of the estimated losses on loans, management may obtain
independent appraisals for significant collateral. While management uses
available information to recognize losses on loans, further reductions in the
carrying amounts of loans may be necessary based on changes in local economic
conditions. In addition, regulatory agencies, as an integral part of their
examination process, periodically review the estimated losses on loans. Such
agencies may require the Bank to recognize additional losses based on their
judgments about information available to them at the time of their examination.
Because of these factors, it is reasonably possible that the estimated losses
on loans may change materially in the near term. However, the amount of the
change that is reasonably possible cannot be estimated.

7



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##### 



Note 2  Stock-based compensation

The Company accounts for stock-based compensation utilizing the intrinsic value
method. Presented below is certain actual financial information of the Company
with comparative pro forma information determined as if the Company had
accounted for the stock-based compensation for the periods presented utilizing
the fair-value method (in thousands, except per share amounts).

|                                                                                                |          |  |          |  |          |   |          |     |          |  |  |  |  |  |  |  |  |   |     |     |  |  |  |  |  |  |  |  |  |   |       |      |  |  |  |  |  |   |       |      | 
|----------------------------------------------------------------------------------------------- | -------- |  | -------- |  | -------- | - | -------- | --- | -------- |  |  |  |  |  |  |  |  | - | --- | --- |  |  |  |  |  |  |  |  |  | - | ----- | ---- |  |  |  |  |  | - | ----- | ---- | 
|                                                                                                |          |  | Three    |  | Three    |   | Six      |     | Six     
|                                                                                                |          |  | Months   |  | Months   |   | Months   |     | Months  
|                                                                                                |          |  | Ended    |  | Ended    |   | Ended    |     | Ended   
|                                                                                                |          |  | June 30, |  | June 30, |   | June 30, |     | June 30,
|                                                                                                |          |  | 2003     |  | 2002     |   | 2003     |     | 2002    
|                                                                                                |          |  |          |  |          |   |          |     |         
|Net income as reported                                                                          |          |  |          |  |          | $ | 1,289    |     |          |  |  |  |  |  |  |  |  | $ | 576 |     |  |  |  |  |  |  |  |  |  | $ | 2,240 |      |  |  |  |  |  | $ | 1,581 |     
|Earnings per share as reported                                                                  |          |  |          |  |          |   |          |     |          |  |  |  |  |  |  |  |  |   |     |     |  |  |  |  |  |  |  |  |  |   |       |      |  |  |  |  |  |   |       |     
|                                                                                                | Basic:   |  |          |  |          |   | $        | .98 |          |  |  |  |  |  |  |  |  |   | $   | .44 |  |  |  |  |  |  |  |  |  |   | $     | 1.71 |  |  |  |  |  |   | $     | 1.22 | 
|                                                                                                | Diluted: |  |          |  |          |   | $        | .91 |          |  |  |  |  |  |  |  |  |   | $   | .41 |  |  |  |  |  |  |  |  |  |   | $     | 1.58 |  |  |  |  |  |   | $     | 1.13 | 
|Stock-based employee compensation cost
included in net income as reported                       |          |  |          |  |          | $ |         |     |          |  |  |  |  |  |  |  |  | $ |    |     |  |  |  |  |  |  |  |  |  | $ |      |      |  |  |  |  |  | $ |      |     
|Stock-based employee compensation cost
based on fair-value method                               |          |  |          |  |          | $ | 24       |     |          |  |  |  |  |  |  |  |  | $ | 27  |     |  |  |  |  |  |  |  |  |  | $ | 51    |      |  |  |  |  |  | $ | 74    |     
|Pro forma net income including stock-based
compensation cost based on fair-value
method         |          |  |          |  |          | $ | 1,265    |     |          |  |  |  |  |  |  |  |  | $ | 549 |     |  |  |  |  |  |  |  |  |  | $ | 2,189 |      |  |  |  |  |  | $ | 1,507 |     
|Pro forma earnings per share including
stock-based compensation cost based on
fair-value method |          |  |          |  |          |   |          |     |          |  |  |  |  |  |  |  |  |   |     |     |  |  |  |  |  |  |  |  |  |   |       |      |  |  |  |  |  |   |       |     
|                                                                                                | Basic:   |  |          |  |          |   | $        | .96 |          |  |  |  |  |  |  |  |  |   | $   | .42 |  |  |  |  |  |  |  |  |  |   | $     | 1.67 |  |  |  |  |  |   | $     | 1.15 | 
|                                                                                                | Diluted: |  |          |  |          |   | $        | .88 |          |  |  |  |  |  |  |  |  |   | $   | .39 |  |  |  |  |  |  |  |  |  |   | $     | 1.53 |  |  |  |  |  |   | $     | 1.07 | 

Note 3  Earnings per share

Earnings per share are calculated on the basis of the weighted average number
of shares outstanding. As the Company has granted stock options to certain
officers and others with the Company, diluted earnings per share have been
presented in the Statements of Income.

In the fourth quarter of 2002, the Company paid a 15% stock dividend. The June
30, 2002 earnings per share amounts presented in the Statements of Income have
been restated from previously reported amounts to reflect the additional shares
issued in this dividend.

8



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##### 



The following reconciles the numerators and denominators of the basic and
diluted earnings per share computations:

|                              |                                                                  |   |                                        |           |             |  |                 |           |           |  |   |      | 
|----------------------------- | ---------------------------------------------------------------- | - | -------------------------------------- | --------- | ----------- |  | --------------- | --------- | --------- |  | - | ---- | 
|                              |                                                                  |   | For the Six Months Ended June 30, 2003
|                              |                                                                  |   |                                       
|                              |                                                                  |   |                                        |           |             |  | Weighted        |           |           |  |  
|                              |                                                                  |   |                                        |           |             |  | Average Shares- |           | Per-Share
|                              |                                                                  |   | Numerator                              |           | Denominator |  | Amount         
|                              |                                                                  |   |                                        |           |             |  |                
|Net income                    |                                                                  | $ | 2,240,000                              |           |             |  |                 |           |           |  |   |     
|Basic EPS                     |                                                                  |   |                                        |           |             |  |                 |           |           |  |   |     
|                              | Income available to common
shareholders                         |   |                                        | 2,240,000 |             |  |                 | 1,309,070 |           |  | $ | 1.71 | 
|Effect of dilutive securities |                                                                  |   |                                        |           |             |  |                 |           |           |  |   |     
|                              | Options                                                          |   |                                        |           |             |  |                 | 112,477   |           |  |   |      | 
|                              |                                                                  |   |                                        |           |             |  |                 |           |           |  |   |      | 
|Diluted EPS                   |                                                                  |   |                                        |           |             |  |                 |           |           |  |   |     
|                              | Income available to common
shareholders and assumed
conversions |   | $                                      | 2,240,000 |             |  |                 | 1,421,547 |           |  | $ | 1.58 | 
|                              |                                                                  |   |                                        |           |             |  |                 |           |           |  |   |      | 

9



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##### 



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

RESULTS OF OPERATIONS

Overview

The Companys net income was $1,289,000 for the second quarter of 2003,
compared to $576,000 for the second quarter of 2002. The Companys net income
for the six months ended June 30, 2003 was $2,240,000, compared to $1,581,000
for the six months ended June 30, 2002. Basic earnings per share were $0.98
for the second quarter of 2003 compared to $0.44 for the second quarter of
2002. Basic earnings per share were $1.71 for the six months ended June 30,
2003, compared to $1.22 for the six months ended June 30, 2002. Total
consolidated assets at June 30, 2003 were $305,014,000, an increase of
$47,652,000 (18.5%) from December 31, 2002 total consolidated assets of
$257,362,000, and an increase of $103,523,000 (51.4%) from June 30, 2002 total
consolidated assets of $201,491,000.

The Companys growth in assets from June 30, 2002 and December 31, 2002 to June
30, 2003 is substantially the result of increased customer deposits obtained
and used by the Bank primarily as an investment in loans. This increase in
deposits and loans is the result of the Banks continued growth in the Augusta,
Georgia market area. This growth in loans also resulted in increased interest
income for the six months ended June 30, 2003 compared to the six months ended
June 30, 2002.

The Bank also had an increase in the gain on sale of mortgage loans originated
by the Banks mortgage division for both the three and six month periods ended
June 30, 2003 compared to the three and six month periods ended June 30, 2002.
This increase in the gain on sale of mortgage loans was the result of the
Banks continued focus on the development of this division and an interest rate
environment conducive to growth in mortgage originations and refinancing
transactions. See Noninterest Income below. In addition, during the first
quarter of 2003, the Banks mortgage division opened a satellite office in
Orlando, Florida.

The Companys return on average assets was 1.59% (annualized) for the six
months ended June 30, 2003, compared to 1.55% (annualized) for the six months
ended June 30, 2002. The Companys return on average equity for the six months
ended June 30, 2003 was 24.77% (annualized) compared to 22.46% (annualized) for
the six months ended June 30, 2002.

Further discussion of significant items affecting net income are discussed in
detail below.

Net Interest Income

Net interest income is the difference between the interest and fees earned on
loans, securities, and other interest-earning assets (interest income) and the
interest paid on deposits and borrowed funds (interest expense). Higher net
interest income is a result of the relationship between the interest-earning
assets and interest-bearing liabilities.

Net interest income was $2,527,000 for the quarter ended June 30, 2003, an
increase of $606,000 (31.6%) over net interest income of $1,921,000 for the
quarter ended June 30, 2002. Net interest income was $4,767,000 for six months
ended June 30, 2003, an increase of $932,000 (24.3%) over net interest income
of $3,835,000 for the six months ended June 30, 2002. These increases were
primarily the result of investing increased deposit liability funds and other
borrowed funds in loans and a decrease in the interest rates paid by the Bank
on deposit liability funds and other borrowed funds as competitive interest
rates continued to decline. Interest-earning assets were $283,466,000 at June
30, 2003 compared to $238,207,000 at December 31, 2002 and $181,210,000 at June
30, 2002, an increase of $45,259,000 (19.0%) and $102,256,000 (56.4%),
respectively. Loans, including loans held for sale, are the highest yielding
component of interest-earning assets. Total loans, net of the allowance for
loan losses, were

10



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##### 



$253,408,000 at June 30, 2003 compared to $210,861,000 at December 31, 2002,
and $158,697,000 at June 30, 2002, an increase of $42,547,000 (20.2%) and
$94,711,000 (59.7%), respectively. The increase in deposit liability funds
continues to be primarily attributable to the Companys continuing growth in
the Augusta, Georgia and Columbia County, Georgia market areas. The increase
in loans also continues to be primarily attributable to this growth.

Loans held for sale by the Bank are primarily funded by the Bank through
customer deposits, short-term borrowings, and lines-of-credit. Substantially
all loans originated by the Banks mortgage lending operation are sold in the
secondary market following origination. At June 30, 2003, loans represented
89.4% of interest-earning assets compared to 88.5% at December 31, 2002, and
87.6% at June 30, 2002. Investments in securities at June 30, 2003 were
$30,058,000, an increase of $2,712,000 (9.9%) from $27,346,000 at December 31,
2002. Interest-bearing deposits at June 30, 2003 were $191,406,000. This
represents an increase of $12,299,000 (6.9%) from the December 31, 2002 balance
of $179,107,000, and an increase of $38,884,000 (25.5%) from the June 30, 2002
balance of $152,522,000. The Banks warehouse lines-of-credit were $42,647,000
at June 30, 2003, an increase of $9,126,000 (27.2%) from the December 31, 2002
balance of $33,521,000 and an increase of $39,005,000 (1,071.0%) from the June
30, 2002 balance of $3,642,000. The Banks balance of Federal funds purchased
was $3,629,000 at June 30, 2003, an increase of $1,932,000 (113.8%) from the
Banks June 30, 2002 balance of $1,697,000. There were no Federal funds
purchased at December 31, 2002. The Banks retail repurchase agreements were
$2,629,000 at June 30, 2003, an increase of $425,000 (19.3%) from the December
31, 2002 balance of $2,204,000 and an increase of $273,000 (11.6%) from the
June 30, 2002 balance of $2,356,000.

Interest Income

Interest income for the three months ended June 30, 2003 was $3,875,000, an
increase of $758,000 (24.3%) from $3,117,000 for the three months ended June
30, 2002. Interest income for the six months ended June 30, 2003 was
$7,433,000, an increase of $1,085,000 (17.1%) from interest income of
$6,348,000 for the six months ended June 30, 2002. The increase in interest
income primarily resulted from an increase in interest and fees on loans. The
increase in interest and fees on loans resulted from the Banks increased
investment in the loan portfolio. Interest income and fees on loans was
$3,566,000 for the three months ended June 30, 2003, an increase of $771,000
(27.6%) from $2,795,000 for the three months ended June 30, 2002. The Bank has
maintained an increasing level of interest income and fees on loans for the
three months ended June 30, 2003 when compared to the three months ended June
30, 2002 in a declining rate environment primarily as a result of increasing
the Banks investment in loans. The Banks opportunity to increase the
investment in loans continues to be primarily attributable to the Banks growth
in the Augusta and Columbia County market areas. In addition, the Banks
mortgage lending operation has contributed to the growth in the investment in
loans.

Interest Expense

Interest expense for the three months ended June 30, 2003 was $1,348,000, an
increase of $152,000 (12.7%) from $1,196,000 for the three months ended June
30, 2002. Interest expense for the six months ended June 30, 2003 was
$2,666,000, an increase of $153,000 (6.1%) from $2,513,000 for the six months
ended June 30, 2002. While the Bank has experienced a significant increase in
interest-bearing deposits from June 30, 2002 to June 30, 2003, the interest
rates paid on these deposits have decreased due to the general lower rate
environment in which these funds were obtained.

Noninterest Income

Noninterest income for the three months ended June 30, 2003 was $4,024,000, an
increase of $1,743,000 (76.4%) from $2,281,000 for the three months ended June
30, 2002. Noninterest income for the six months ended June 30, 2003 was
$7,226,000, an increase of $2,334,000 (47.7%) from $4,892,000 for the six
months ended June 30, 2002. Service charges on deposit accounts were $187,000
for the three months ended June 30, 2003, an increase of $57,000 (43.9%) from
$130,000 for the three months ended

11



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##### 



June 30, 2002. Gain on sale of mortgage loans originated and sold by the
Banks mortgage division was $3,748,000 for the three months ended June 30,
2003, an increase of $1,636,000 (77.5%) from $2,112,000 for the three months
ended June 30, 2002. Gain on sale of mortgage loans originated and sold by the
Banks mortgage division was $6,760,000 for the six months ended June 30, 2003,
an increase of $2,204,000 (48.4%) from $4,556,000 for the six months ended June
30, 2002. Substantially all loans originated by the division are sold in the
secondary market with servicing released.

Noninterest Expense

Noninterest expense for the three months ended June 30, 2003 was $4,095,000, an
increase of $996,000 (32.1%) from $3,099,000 for the three months ended June
30, 2002. Noninterest expense for the six months ended June 30, 2003 was
$7,824,000, an increase of $1,889,000 (31.8%) from $5,935,000 for the six
months ended June 30, 2002. Salary and employee benefit costs were $2,914,000
for the three months ended June 30, 2003, an increase of $1,024,000 (54.2%)
from $1,890,000 for the three months ended June 30, 2002. Salary and employee
benefit costs were $5,475,000 for the six months ended June 30, 2003, an
increase of $1,683,000 (44.4%) from $3,792,000 for the six months ended June
30, 2002. These increases are the result of the Banks hiring of additional
personnel to operate the Furys Ferry office in Columbia County and the
reestablishment of mortgage operations in Savannah, and continued growth in the
Banks and mortgage divisions continuing operations. Occupancy expenses and
other expenses for the six months ended June 30, 2003 also increased from the
six months ended June 30, 2002 primarily as a result of the continued
establishment and growth of the Bank with costs to support the operations.

Income Taxes

The Company recorded income tax expense of $929,000 for the three months ended
June 30, 2003, resulting from the net income before taxes of $2,218,000 for the
quarter. The Company recorded income tax expense of $1,514,000 for
the six months ended June 30, 2003, resulting from the net
income before taxes of $3,754,000 for this period.

REVIEW OF FINANCIAL CONDITION

Overview

Management continuously monitors the financial condition of the Bank in order
to protect depositors, increase retained earnings and protect current and
future earnings. Further discussion of significant items affecting the Banks
financial condition are discussed in detail below.

Asset Quality

A major key to long-term earnings growth is the maintenance of a high-quality
loan portfolio. The Banks directive in this regard is carried out through its
policies and procedures for extending credit to the Banks customers. The goal
and result of these policies and procedures is to provide a sound basis for new
credit extensions and an early recognition of problem assets to allow the most
flexibility in their timely disposition.

Non-performing assets were $1,603,000 at June 30, 2003, compared to $910,000 at
December 31, 2002 and $813,000 at June 30, 2002. The composition of
non-performing assets for each date is shown below.

|                                 |  |          |           |              |  |          |         |  |  |   |         | 
|-------------------------------- |  | -------- | --------- | ------------ |  | -------- | ------- |  |  | - | ------- | 
|                                 |  | June 30, |           | December 31, |  | June 30,
|                                 |  | 2003     |           | 2002         |  | 2002    
|                                 |  |          |           |              |  |         
|Non-accrual loans                |  | $        | 1,050,000 |              |  | $        | 597,000 |  |  | $ | 425,000 | 
|OREO, net of valuation allowance |  |          | 532,000   |              |  |          | 305,000 |  |  |   | 383,000 | 
|Repossessed collateral           |  |          | 21,000    |              |  |          | 8,000   |  |  |   | 5,000   | 
|                                 |  |          |           |              |  |          |         |  |  |   |         | 
|                                 |  | $        | 1,603,000 |              |  | $        | 910,000 |  |  | $ | 813,000 | 
|                                 |  |          |           |              |  |          |         |  |  |   |         | 

12



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The ratio of non-performing assets to total loans and other real estate was
0.62% at June 30, 2003, 0.43% at December 31, 2002, and 0.51% at June 30, 2002.

Reduction and disposition of non-performing assets is a management priority.

Additions to the allowance for loan losses are made periodically to maintain
the allowance at an appropriate level based upon managements analysis of
potential risk in the loan portfolio. The amount of the loan loss allowance
and related provision is determined by an evaluation of the level of loans
outstanding, the level of non-performing loans, historical loan loss
experience, delinquency trends, the amount of actual losses charged to the
reserve in a given period, and an assessment of present and anticipated
economic conditions. From the previously described analysis, management
determined that the allowance for loan losses should be increased through a
provision for loan losses of $238,000 during the quarter ended June 30, 2003.
The ratio of allowance for loan losses to total loans was 1.07% at June 30,
2003, 1.14% at December 31, 2002, and 1.48% at June 30, 2002. Excluding the
balance of loans held for sale by the Bank, the ratio of allowance for loan
losses to loans was 1.75% at June 30, 2003, 1.68% at December 31, 2002, and
1.85% at June 30, 2002. Management considers the current allowance for loan
losses appropriate based upon its analysis of the potential risk in the
portfolio, although there can be no assurance that the assumptions underlying
such analysis will continue to be correct.

Liquidity and Capital Resources

Liquidity is the ability of an organization to meet its financial commitments
and obligations on a timely basis. These commitments and obligations include
credit needs of customers, withdrawals by depositors, and payment of operating
expenses and dividends. The Bank does not anticipate any events which would
require liquidity beyond that which is available through deposit growth,
federal funds balances, warehouse lines and other funding sources or investment
portfolio maturities. The Bank actively manages the levels, types and
maturities of earning assets in relation to the sources available to fund
current and future needs to ensure that adequate funding will be available at
all times.

Management believes that the Banks liquidity remains adequate to meet
operating and loan funding requirements. The Banks liquidity ratio at June
30, 2003 was 45.2%, compared to 39.6% at December 31, 2002, and 30.1% at June
30, 2002.

Management is committed to maintaining capital at a level sufficient to protect
depositors, provide for reasonable growth, and fully comply with all regulatory
requirements. Managements strategy to achieve this goal is to retain
sufficient earnings while providing a reasonable return on equity. Federal
banking regulations establish certain capital adequacy standards that banks are
required to maintain. These regulations set minimum requirements for
risk-based capital of 4% for core capital (Tier I), 8% for total risk-based
capital and 4% for the leverage ratio. At June 30, 2003, the Banks Tier I
capital was 9.79% and total risk-based capital was 11.04%, compared to 9.15%
and 10.39% at year-end December 31, 2002, respectively. At June 30, 2003, the
Banks leverage ratio was 6.87% compared to 7.17% at December 31, 2002.

Cautionary Note Regarding Forward-Looking Statements

The Company may, from time to time, make written or oral forward-looking
statements, including statements contained in the Companys filings with the
Securities and Exchange Commission (the Commission) and its reports to
stockholders. Such forward-looking statements are made based on managements
beliefs as well as assumptions made by, and information currently available to,
management pursuant to safe harbor provisions of the Private Securities
Litigation Reform Act of 1995.

13



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##### 



The Companys actual results may differ materially from the results anticipated
in these forward-looking statements due to a variety of factors, including
governmental monetary and fiscal policies, deposit levels, loan demand,
loan collateral values, securities portfolio values and interest rate risk
management; the effects of competition in the banking business from other
commercial banks, savings and loan associations, mortgage banking firms,
consumer finance companies, credit unions, securities brokerage firms,
insurance companies, money market mutual funds and other financial institutions
operating in the Companys market area and elsewhere, including institutions
operating through the Internet; changes in government regulations relating to
the banking industry, including regulations relating to branching and
acquisitions; failure of assumptions underlying the establishment of reserves
for loan losses, including the value of collateral underlying delinquent loans,
and other factors. The Company cautions that such factors are not exclusive.
The Company does not undertake to update any forward-looking statements that
may be made from time to time by, or on behalf of, the Company.

Item 3. Controls and Procedures.

As of June 30, 2003, the Company carried out an evaluation, under the
supervision and with the participation of the Companys management, including
the Companys Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the Companys disclosure controls
and procedures pursuant to Exchange Act Rule 13a-15. Based upon that
evaluation, the Companys Chief Executive Officer and Chief Financial Officer
concluded that the Companys disclosure controls and procedures are effective
in timely alerting them to material information relating to the Company
required to be included in the Companys SEC filings. Disclosure controls and
procedures are controls and procedures that are designed to ensure that
information required to be disclosed in Company reports filed or submitted
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commissions rules
and forms.

There have been no significant changes in the Companys internal controls or in
other factors that could significantly affect internal controls subsequent to
the date the Chief Executive Officer and Chief Financial Officer carried out
their evaluation.

14



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##### 



Part II
OTHER INFORMATION

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

The 2003 Annual Meeting of Shareholders of the Company (the Annual Meeting)
was held on May 21, 2003. At the Annual Meeting, the following persons were
elected as directors to serve as Class III directors, for a term of three years
and until their successors are elected and qualified: Patrick G. Blanchard,
David W. Joesbury, Sr., John W. Lee, A. Montague Miller, Robert N. Wilson, Jr.
and Bennye M. Young.

The number of votes cast for and withheld in the election of each nominee for
director was as follows:

|                       |  |       |         |          |  |  |       | 
|---------------------- |  | ----- | ------- | -------- |  |  | ----- | 
|                       |  | Votes |         | Votes   
|                       |  | FOR   |         | WITHHELD
|                       |  |       |         |         
|Patrick G. Blanchard   |  |       | 952,552 |          |  |  | 3,178 | 
|David W. Joesbury, Sr. |  |       | 952,552 |          |  |  | 3,178 | 
|John W. Lee            |  |       | 952,552 |          |  |  | 3,178 | 
|A. Montague Miller     |  |       | 952,552 |          |  |  | 3,178 | 
|Robert N. Wilson, Jr.  |  |       | 952,552 |          |  |  | 3,178 | 
|Bennye M. Young        |  |       | 952,552 |          |  |  | 3,178 | 

No other matters were presented or voted for at the Annual Meeting.

The following persons did not stand for reelection to the Board at the 2003
Annual Meeting of Shareholders as their term of office continued after the
Annual Meeting: Phillip G. Farr, Samuel A. Fowler, Jr., Arthur J. Gay, Jr.,
Joseph D. Greene, Hugh L. Hamilton, Jr., William G. Hatcher, Larry DeMeyers, J.
Randal Hall, George O. Hughes, George H. Inman, James L. Lemley, M.D. and
Julian W. Osbon.

15



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##### 



Item 6. Exhibits and Reports on Form 8-K

| |     |          
| | --- | ---------
| | (a) | Exhibits.

| |               |                                                                                                              
| | ------------- | -------------------------------------------------------------------------------------------------------------
| | Exhibit  31.1 | Certification of President and Chief Executive Officer
Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
|
| | Exhibit  31.2 | Certification of Chief Financial Officer Pursuant to
Section 302 of Sarbanes-Oxley Act of 2002.              
|
| | Exhibit  32.1 | Certification Pursuant to Section 906 of Sarbanes-Oxley
Act of 2002.                                         

| |     |                                                                                                                                                                  
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | Reports on Form 8-K. The Company filed a Current Report on
Form 8-K on April 17, 2003 with respect to its financial results for
the quarter ended March 31, 2003.

16



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##### 



SIGNATURES

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

Georgia-Carolina Bancshares, Inc.

|    |  |                                                                                           |  |                
|--- |  | ----------------------------------------------------------------------------------------- |  | ---------------
|By: |  | /s/ Patrick G. Blanchard                                                                  |  | August 13, 2003
|    |  |                                                                                           |  | Date           
|    |  | Patrick G. Blanchard 
President and Chief Executive Officer
(principal executive officer) |  |                
|    |  |                                                                                           |  |                
|By: |  | /s/ James M. Thomas                                                                       |  | August 13, 2003
|    |  |                                                                                           |  | Date           
|    |  | James M. Thomas 
Chief Financial Officer
(principal financial and accounting officer)     |  |                

17



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##### 



EXHIBIT INDEX

|             |  |                                                                                                               |  |  |  | 
|------------ |  | ------------------------------------------------------------------------------------------------------------- |  |  |  | 
|Exhibit No.  |  | Description of Exhibit                                                                                        |  |  |  | 
|             |  |                                                                                                               |  |  |  | 
|Exhibit 31.1 |  | Certification of President and Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
|            
|Exhibit 31.2 |  | Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.              
|            
|Exhibit 32.1 |  | Certifications Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.                                        

18