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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB/A

|                                             |  |                                                                                                     
|-------------------------------------------- |  | ----------------------------------------------------------------------------------------------------
|x                                            |  | Amendment No. 1 to Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
|                                            
|For the quarterly period ended June 30, 2002
|                                            
|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)


Issuers 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 12, 2002
|                              |  |                               
|Common Stock, $.001 Par Value |  | 1,132,643 shares              

Transitional Small Business Disclosure Format:   
YES   o   
NO   x

The following items are amended:

|        |  |         |  |                                                                                      
|------- |  | ------- |  | -------------------------------------------------------------------------------------
|Part I. |  | Item 1. |  | Financial Statements                                                                 
|        |  | Item 2. |  | Managements Discussion and Analysis of Financial Condition and Results of Operations





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TABLE OF CONTENTS



|                                                     |  |  |  |  |  |  |  | 
|---------------------------------------------------- |  |  |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                       
|Condensed Consolidated Balance Sheets               
|Condensed Consolidated Statements of Income         
|Condensed Consolidated Statements of Cash Flows     
|Notes to Condensed Consolidated Financial Statements
|RESULTS OF OPERATIONS                               
|REVIEW OF FINANCIAL CONDITION                       
|Part II OTHER INFORMATION                           
|SIGNATURES                                          
|CERTIFICATIONS                                      
|EXHIBIT INDEX                                       
|Section 906 Certification of the CEO & CFO          



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EXPLANATORY NOTE

This Amendment No. 1 to the Georgia-Carolina Bancshares, Inc. Form 10-QSB for
the quarter ended June 30, 2002 is being filed solely for the purpose of (i)
adjusting the basic and diluted net income per share numbers in the
consolidated statements of income for the three and six month periods ended
June 30, 2001 and (ii) amending Managements Discussion and Analysis of
Financial Condition and Results of Operations to reflect the issuance of
additional shares in connection with the 6-for-5 stock split which occurred on
December 1, 2001.





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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,
|                                                    |                                                                                                                   |                                     |                                            |        | 2002     |         | 2001        
|                                                    |                                                                                                                   |                                     |                                            |        |          |         |             
|ASSETS                                              |                                                                                                                   |                                     |                                            |        |          |         |              |       
|Cash and due from banks                             |                                                                                                                   | $                                   | 8,332                                      |        |          | $       | 3,316        |       
|Federal funds sold                                  |                                                                                                                   |                                     |                                           |        |          |         | 402          |       
|Securities available-for-sale                       |                                                                                                                   |                                     | 22,513                                     |        |          |         | 21,115       |       
|Loans, net of allowance for loan losses             |                                                                                                                   |                                     | 126,300                                    |        |          |         | 113,039      |       
|Loans, held for sale                                |                                                                                                                   |                                     | 32,397                                     |        |          |         | 58,736       |       
|Bank premises and fixed assets                      |                                                                                                                   |                                     | 7,679                                      |        |          |         | 6,991        |       
|Accrued interest receivable                         |                                                                                                                   |                                     | 1,048                                      |        |          |         | 1,092        |       
|Foreclosed real estate, net of allowance            |                                                                                                                   |                                     | 383                                        |        |          |         | 383          |       
|Deferred tax asset, net                             |                                                                                                                   |                                     | 349                                        |        |          |         | 401          |       
|Other assets, including restricted assets           |                                                                                                                   |                                     | 2,490                                      |        |          |         | 390          |       
|                                                    |                                                                                                                   |                                     |                                            |        |          |         |              |       
|                                                    |                                                                                                                   |                                     | Total assets                               |        | $        | 201,491 |              |        | $      | 205,865 | 
|                                                    |                                                                                                                   |                                     |                                            |        |          |         |              |       
|LIABILITIES AND SHAREHOLDERS EQUITY                |                                                                                                                   |                                     |                                            |        |          |         |              |       
|Deposits:                                           |                                                                                                                   |                                     |                                            |        |          |         |              |       
|                                                    | Non-interest bearing                                                                                              |                                     | $                                          | 23,359 |          |         | $            | 21,973 |       
|                                                    | Interest-bearing:                                                                                                 |                                     |                                            |        |          |         |              |        |       
|                                                    |                                                                                                                   | NOW accounts                        |                                            |        | 15,030   |         |              |        | 11,426 |        
|                                                    |                                                                                                                   | Savings                             |                                            |        | 19,020   |         |              |        | 11,586 |        
|                                                    |                                                                                                                   | Money market accounts               |                                            |        | 12,681   |         |              |        | 12,818 |        
|                                                    |                                                                                                                   | Time deposits of $100,000, and over |                                            |        | 48,508   |         |              |        | 42,848 |        
|                                                    |                                                                                                                   | Other time deposits                 |                                            |        | 57,283   |         |              |        | 48,972 |        
|                                                    |                                                                                                                   |                                     |                                            |        |          |         |              |       
|                                                    |                                                                                                                   |                                     | Total deposits                             |        |          | 175,881 |              |        |        | 149,623 | 
|Other liabilities, borrowings and retail agreements |                                                                                                                   |                                     | 10,657                                     |        |          |         | 43,042       |       
|                                                    |                                                                                                                   |                                     |                                            |        |          |         |              |       
|                                                    |                                                                                                                   |                                     | Total liabilities                          |        |          | 186,538 |              |        |        | 192,665 | 
|                                                    |                                                                                                                   |                                     |                                            |        |          |         |              |       
|Shareholders equity:                               |                                                                                                                   |                                     |                                            |        |          |         |              |       
|                                                    | Preferred stock, par value $.001; 1,000,000 shares authorized;
none issued                                        |                                     |                                            |       |          |         |              |       |       
|                                                    | Common stock, par value $.001; 9,000,000 shares authorized;
1,131,890 and 1,127,214 shares
issued and outstanding |                                     |                                            | 1      |          |         |              | 1      |       
|                                                    | Additional paid-in-capital                                                                                        |                                     |                                            | 10,326 |          |         |              | 10,267 |       
|                                                    | Retained Earnings                                                                                                 |                                     |                                            | 4,347  |          |         |              | 2,766  |       
|                                                    | Accumulated other comprehensive income (loss)                                                                     |                                     |                                            | 279    |          |         |              | 166    |       
|                                                    |                                                                                                                   |                                     |                                            |        |          |         |              |       
|                                                    |                                                                                                                   |                                     | Total shareholders equity                 |        |          | 14,953  |              |        |        | 13,200  | 
|                                                    |                                                                                                                   |                                     |                                            |        |          |         |              |       
|                                                    |                                                                                                                   |                                     | Total liabilities and shareholders equity |        | $        | 201,491 |              |        | $      | 205,865 | 
|                                                    |                                                                                                                   |                                     |                                            |        |          |         |              |       





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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,        
|                                      |                                                  |                                                     |       |                    |       |                 
|                                      |                                                  |                                                     |       | 2002               |       | 2001             |       | 2002  |       | 2001
|                                      |                                                  |                                                     |       |                    |       |                  |       |       |       |     
|Interest income                       |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                      | Interest and fees on loans                       |                                                     | $     | 2,795              |       |                  | $     | 2,822 |       |      | $     | 5,715 |       |   | $     | 5,084 |      
|                                      | Interest on taxable securities                   |                                                     |       | 319                |       |                  |       | 240   |       |      |       | 628   |       |   |       | 472   |      
|                                      | Interest on nontaxable securities                |                                                     |       |                   |       |                  |       | 27    |       |      |       |      |       |   |       | 44    |      
|                                      | Interest on Federal funds sold                   |                                                     |       | 3                  |       |                  |       | 2     |       |      |       | 5     |       |   |       | 10    |      
|                                      |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                      |                                                  | Total interest income                               |       |                    | 3,117 |                  |       |       | 3,091 |      |       |       | 6,348 |   |       |       | 5,610 | 
|                                      |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|Interest expense                      |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                      | Interest on time deposits of $100,000 or more    |                                                     |       | 420                |       |                  |       | 447   |       |      |       | 811   |       |   |       | 787   |      
|                                      | Interest on other deposits                       |                                                     |       | 722                |       |                  |       | 854   |       |      |       | 1,481 |       |   |       | 1,663 |      
|                                      | Interest on funds purchased and other borrowings |                                                     |       | 54                 |       |                  |       | 410   |       |      |       | 221   |       |   |       | 697   |      
|                                      |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                      |                                                  | Total interest expense                              |       |                    | 1,196 |                  |       |       | 1,711 |      |       |       | 2,513 |   |       |       | 3,147 | 
|                                      |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                      |                                                  | Net interest income                                 |       |                    | 1,921 |                  |       |       | 1,380 |      |       |       | 3,835 |   |       |       | 2,463 | 
|Provision for loan losses             |                                                  |                                                     | 93    |                    |       |                  | 168   |       |       |      | 214   |       |       |   | 370   |      
|                                      |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                      |                                                  | Net interest income after provision for loan losses |       |                    | 1,828 |                  |       |       | 1,212 |      |       |       | 3,621 |   |       |       | 2,093 | 
|                                      |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|Noninterest income                    |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                      | Service charges on deposits                      |                                                     |       | 130                |       |                  |       | 114   |       |      |       | 256   |       |   |       | 220   |      
|                                      | Gain on sale of mortgage loans and other income  |                                                     |       | 2,151              |       |                  |       | 2,089 |       |      |       | 4,636 |       |   |       | 3,289 |      
|                                      |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                      |                                                  |                                                     | 2,281 |                    |       |                  | 2,203 |       |       |      | 4,892 |       |       |   | 3,509 |      
|                                      |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|Noninterest expense                   |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                      | Salaries and employee benefits                   |                                                     |       | 1,890              |       |                  |       | 1,792 |       |      |       | 3,792 |       |   |       | 3,197 |      
|                                      | Occupancy expenses                               |                                                     |       | 267                |       |                  |       | 232   |       |      |       | 499   |       |   |       | 444   |      
|                                      | Other expenses                                   |                                                     |       | 942                |       |                  |       | 605   |       |      |       | 1,644 |       |   |       | 1,094 |      
|                                      |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                      |                                                  |                                                     | 3,099 |                    |       |                  | 2,629 |       |       |      | 5,935 |       |       |   | 4,735 |      
|                                      |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|Income before income taxes            |                                                  |                                                     | 1,010 |                    |       |                  | 786   |       |       |      | 2,578 |       |       |   | 867   |      
|                                      |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|Income tax expense (benefit)          |                                                  |                                                     | 434   |                    |       |                  | 284   |       |       |      | 997   |       |       |   | 311   |      
|                                      |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                      |                                                  | Net income                                          |       | $                  | 576   |                  |       | $     | 502   |      |       | $     | 1,581 |   |       | $     | 556   | 
|                                      |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|Net income per share of common stock: |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                      | Basic                                            |                                                     | $     | 0.51               |       |                  | $     | 0.45  |       |      | $     | 1.40  |       |   | $     | 0.49  |      
|                                      |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|                                      | Diluted                                          |                                                     | $     | 0.47               |       |                  | $     | 0.42  |       |      | $     | 1.30  |       |   | $     | 0.47  |      
|                                      |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      
|Dividends per share of common stock   |                                                  | $                                                   |      |                    |       | $                |      |       |       | $    |      |       |       | $ |      |      
|                                      |                                                  |                                                     |       |                    |       |                  |       |       |       |      |       |       |       |   |       |      





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GEORGIA-CAROLINA BANCSHARES, INC.




Condensed Consolidated Statements of Cash Flows

(Unaudited)(dollars in thousands)


|                                                   |                                                                                             |                                            |                                                     |        |                           |        |       |         |       |         |  
|-------------------------------------------------- | ------------------------------------------------------------------------------------------- | ------------------------------------------ | --------------------------------------------------- | ------ | ------------------------- | ------ | ----- | ------- | ----- | ------- | -
|                                                   |                                                                                             |                                            |                                                     |        | Six Months Ended June 30,
|                                                   |                                                                                             |                                            |                                                     |        |                          
|                                                   |                                                                                             |                                            |                                                     |        | 2002                      |        | 2001 
|                                                   |                                                                                             |                                            |                                                     |        |                           |        |      
|Cash flows from operating activities               |                                                                                             |                                            |                                                     |        |                           |        |       |        
|                                                   | Net income                                                                                  |                                            | $                                                   | 1,581  |                           |        | $     | 556     |      
|                                                   | Adjustments to reconcile net income
to net cash provided by (used in)
operating activities: |                                            |                                                     |        |                           |        |       |         |      
|                                                   |                                                                                             | Depreciation and amortization              |                                                     |        | 217                       |        |       |         | 190   |        
|                                                   |                                                                                             | Provision for loan losses                  |                                                     |        | 214                       |        |       |         | 370   |        
|                                                   |                                                                                             | Deferred income tax                        |                                                     |        | (33                       | )      |       |         | (155  | )      
|                                                   |                                                                                             | Net change in other assets and liabilities |                                                     |        | (1,749                    | )      |       |         | 1,047 |        
|                                                   |                                                                                             |                                            |                                                     |        |                           |        |       |        
|                                                   |                                                                                             |                                            | Net cash provided by (used in)
operating activities |        |                           | 230    |       |         |       | 2,008   |  
|                                                   |                                                                                             |                                            |                                                     |        |                           |        |       |        
|Cash flows from investing activities               |                                                                                             |                                            |                                                     |        |                           |        |       |        
|                                                   | Decrease in federal funds sold                                                              |                                            |                                                     | 402    |                           |        |       |        |      
|                                                   | Loan originations and collections, net                                                      |                                            |                                                     | 12,864 |                           |        |       | (42,632 | )    
|                                                   | Net transactions, available-for-sale securities                                             |                                            |                                                     | (3,179 | )                         |        |       | (5,087  | )    
|                                                   | Net purchase of premises and equipment                                                      |                                            |                                                     | (905   | )                         |        |       | (692    | )    
|                                                   |                                                                                             |                                            |                                                     |        |                           |        |       |        
|                                                   |                                                                                             |                                            | Net cash provided by (used in)
investing activities |        |                           | 9,182  |       |         |       | (48,411 | )
|                                                   |                                                                                             |                                            |                                                     |        |                           |        |       |        
|Cash flows from financing activities               |                                                                                             |                                            |                                                     |        |                           |        |       |        
|                                                   | Net increase (decrease) in deposits and
funds purchased                                     |                                            |                                                     | (4,396 | )                         |        |       | 45,420  |      
|                                                   |                                                                                             |                                            |                                                     |        |                           |        |       |        
|                                                   |                                                                                             |                                            | Net cash provided by (used in)
financing activities |        |                           | (4,396 | )     |         |       | 45,420  |  
|                                                   |                                                                                             |                                            |                                                     |        |                           |        |       |        
|Net increase (decrease) in cash and due from
banks |                                                                                             |                                            | 5,016                                               |        |                           |        | (983  | )      
|Cash and due from banks at beginning of period     |                                                                                             |                                            | 3,316                                               |        |                           |        | 5,522 |        
|                                                   |                                                                                             |                                            |                                                     |        |                           |        |       |        
|Cash and due from banks at end of period           |                                                                                             | $                                          | 8,332                                               |        |                           | $      | 4,539 |        
|                                                   |                                                                                             |                                            |                                                     |        |                           |        |       |        





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GEORGIA-CAROLINA BANCSHARES, INC.




Notes to Condensed Consolidated Financial Statements

June 30, 2002
(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, 2002 and December 31, 2001 and for the
six months ended and three months ended June 30, 2002 and 2001 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, 2001.

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.

The preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities and
income and expense amounts. Actual results could differ from those estimates.

Note 2  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 has been
presented in the Statements of Income.

During the year ended December 31, 2001, the Company effected a 6-for-5 split
of the Companys common stock payable in the form a 20% stock dividend.
Accordingly, the 2001 earnings per share amounts have been restated to give
effect to this stock split.

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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, 2002
|                                      |                                                                  |   |                                       
|                                      |                                                                  |   |                                        |           |             |  | Weighted        |           |           |  |  
|                                      |                                                                  |   |                                        |           |             |  | Average Shares- |           | Per-Share
|                                      |                                                                  |   | Numerator                              |           | Denominator |  | Amount         
|                                      |                                                                  |   |                                        |           |             |  |                
|Net income                            |                                                                  | $ | 1,581,000                              |           |             |  |                 |           |           |  |   |     
|Basic EPS                             |                                                                  |   |                                        |           |             |  |                 |           |           |  |   |     
|                                      | Income available to common
shareholders                         |   |                                        | 1,581,000 |             |  |                 | 1,129,625 |           |  | $ | 1.40 | 
|Effect of dilutive securities
Options |                                                                  |   |                                        |           |             |  | 85,615          |           |           |  |   |     
|                                      |                                                                  |   |                                        |           |             |  |                 |           |           |  |   |     
|Diluted EPS                           |                                                                  |   |                                        |           |             |  |                 |           |           |  |   |     
|                                      | Income available to common
shareholders and assumed
conversions |   | $                                      | 1,581,000 |             |  |                 | 1,215,240 |           |  | $ | 1.30 | 
|                                      |                                                                  |   |                                        |           |             |  |                 |           |           |  |   |     

Note 3  Recent Developments

In June 2001, the Financial Accounting Standards Board issued two Statements of
Financial Accounting Standards, No. 141, Business Combinations (SFAS No. 141),
and No. 142, Goodwill and Other Intangible Assets (SFAS No. 142). SFAS No. 141
addresses financial accounting and reporting for business combinations and
supersedes APB Opinion No. 16, Business Combinations, and FASB Statement No.
38, Accounting for Preacquisition Contingencies of Purchased Enterprises. All
business combinations in the scope of SFAS No. 141 are to be accounted for
using one method, the purchase method. The provisions of SFAS No. 141 apply to
all business combinations initiated after June 30, 2001. Use of the
pooling-of-interests method for those business combinations is prohibited. The
provisions of SFAS No. 141 also apply to all business combinations accounted
for by the purchase method for which the date of acquisition is July 1, 2001,
or later.

SFAS No. 142 addresses financial accounting and reporting for acquired goodwill
and other intangible assets and supersedes APB Opinion No. 17, Intangible
Assets. It addresses how intangible assets that are acquired individually or
with a group of other assets (but not those acquired in a business combination)
should be accounted for in financial statements upon their acquisition. SFAS
No. 142 also addresses how goodwill and other intangible assets should be
accounted for after they have been initially recognized in the financial
statements. Under SFAS No. 142, goodwill and intangible assets that have
indefinite useful lives will not be amortized but rather will be tested at
least annually for impairment. Intangible assets that have finite useful lives
will continue to be amortized over their useful lives, but without the
constraint of the 40-year maximum life required by SFAS No. 142. The provisions
of SFAS No. 142 are required to be applied starting with fiscal years beginning
after December 15, 2001.

The Company adopted the provisions of SFAS No. 142 effective January 1, 2002.
The Company determined that the provisions of SFAS No. 142 did not have an
impact on the financial position of the Company and results of its operations
for the six months ended June 30, 2002.

5



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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 $576,000 for the second quarter of 2002, compared
to $502,000 for the second quarter of 2001. Basic earnings per share were
$0.51 for the second quarter of 2002 compared to $0.45 per share for the second
quarter of 2001. Total consolidated assets at June, 30, 2002 were
$201,491,000, a decrease of $4,374,000 (2.1%) from December 31, 2001 total
consolidated assets of $205,865,000, and an increase of $37,179,000 (22.6%)
from June 30, 2001 total consolidated assets of $164,312,000.

The Companys growth in assets from June 30, 2001 to June 30, 2002 is primarily
the result of continued loan demand funded by increased customer deposits
obtained by the Bank. 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, 2002 compared to the six months ended June 30, 2001.

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, 2002 compared to the three and six month periods ended June 30, 2001.
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.

The Companys return on average assets was 1.55% (annualized) for the six
months ended June 30, 2002, compared to 0.79% (annualized) for the six months
ended June 30, 2001. The Companys return on average equity for the six months
ended June 30, 2002 was 22.46% (annualized) compared to 9.58% (annualized) for
the six months ended June 30, 2001.

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 $1,921,000 for the quarter ended June 30, 2002, an
increase of $541,000 (39.2%) over net interest income of $1,380,000 for the
quarter ended June 30, 2001. This increase was 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 $181,210,000 at June 30, 2002 compared to
$192,890,000 at December 31, 2001, a decrease of $11,680,000 (6.1%) and
$151,528,000 at June 30, 2001, an increase of $29,682,000 (19.6%). Loans,
including loans held for sale, are the highest yielding component of
interest-earning assets. Total loans, net of loan loss reserve, were
$158,697,000 at June 30, 2002 compared to $131,844,000 at June 30, 2001, an
increase of $26,853,000 (20.4%). Total loans decreased $13,078,000 (7.6%) from
December 31, 2001 to June 30, 2002. The increase in deposit liability funds
continues to be primarily attributable to the Companys continuing expansion in
the Augusta, Georgia and Columbia County, Georgia market areas. The increase
in loans also continues to be primarily attributable to this expansion.

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Loans held for sale by the Bank are primarily funded by the Bank through
deposits and short-term borrowings. Substantially all loans originated by the
Banks mortgage lending operation are sold in the secondary market following
origination.

At June 30, 2002, loans represented 87.6% of interest-earning assets compared
to 89.1% at December 31, 2001, and 87.0% at June 30, 2001. Investments in
securities increased $1,398,000 (6.6%) from December 31, 2001, and increased
$2,829,000 (14.4%) from June 30, 2001. Interest-bearing deposits at June 30,
2002 were $152,522,000. This represents an increase of $24,872,000 (19.5%)
from the December 31, 2001 balance of $127,650,000, and an increase of
$51,655,000 (51.2%) from the June 30, 2001 balance of $100,867,000. The Banks
warehouse line-of-credit was $3,642,000 at June 30, 2002, a decrease of
$29,913,000 (89.1%) from the December 31, 2001 balance of $33,555,000 and a
decrease of $14,704,000 (80.1%) from the June 30, 2001 balance of $18,346,000.
The Banks balance of Federal funds purchased was $1,697,000 at June 30, 2002,
a decrease of $2,167,000 from the Banks June 30, 2001 balance of $3,864,000.
There were no Federal funds purchased at December 31, 2001. The Banks retail
repurchase agreements were $2,356,000 at June 30, 2002, an increase of $68,000
(3.0%) from the December 31, 2001 balance of $2,288,000 and a decrease of
$3,644,000 (60.7%) from the June 30, 2001 balance of $6,000,000.

Interest Income

Interest income for the three months ended June 30, 2002 was $3,117,000, an
increase of $26,000 (0.8%) from $3,091,000 for the three months ended June 30,
2001. The increase in interest income primarily resulted from an increase in
interest earned on securities, offset by a slight decrease in interest and fees
on loans. The increase in interest income earned on securities resulted from
the Banks increased investment in securities. Interest income and fees on
loans was $2,795,000 for the three months ended June 30, 2002, a decrease of
$27,000 (0.1%) from $2,822,000 for the three months ended June 30, 2001. This
decrease in interest income and fees from loans is a result of declining
competitive interest rates on loans. The Bank has maintained a comparable level
of interest income and fees on loans for the three months ended June 30, 2002
compared to the three months ended June 30, 2001 in a declining rate
environment primarily as a result of the Banks increasing investment in loans.
The Banks opportunity to increase the investment in loans continues to be
primarily attributable to the expansion into the Augusta and Columbia County
market areas. In addition, the Banks mortgage lending operation is
contributing to the growth in the investment in loans.

Interest Expense

Interest expense for the three months ended June 30, 2002 was $1,196,000, a
decrease of $515,000 (30.1%) from $1,711,000 for the three months ended June
30, 2001. While the Bank has experienced a significant increase in
interest-bearing deposits from June 30, 2001 to June 30, 2002, interest expense
on these deposits has decreased due to the lower rate environment in which
these funds were obtained.

Noninterest Income

Noninterest income for the three months ended June 30, 2002 was $2,281,000, an
increase of $78,000 (3.5%) from $2,203,000 for the three months ended June 30,
2001. Service charges on deposit accounts were $130,000 for the three months
ended June 30, 2002, an increase of $16,000 (14.0%) from $114,000 for the three
months ended June 30, 2001. Gain on sale of mortgage loans originated and sold
by the Banks mortgage division was $2,111,000 for the three months ended June
30, 2002, an increase of $22,000 (1.1%) from $2,089,000 for the three months
ended June 30, 2001. Substantially all loans originated by the division are
sold in the secondary market with servicing released.

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Noninterest Expense

Noninterest expense for the three months ended June 30, 2002 was $3,099,000, an
increase of $470,000 (17.9%) from $2,629,000 for the three months ended June
30, 2001. Salary and employee benefit costs were $1,890,000 for the three
months ended June 30, 2002, an increase of $98,000 (5.5%) from $1,792,000 for
the three months ended June 30, 2001. This increase is the result of the Bank
hiring additional personnel to operate the Furys Ferry office in Columbia
County and the reestablishment of mortgage operations in Savannah. Occupancy
expenses and other expenses for the three months ended June 30, 2002 also
increased from the three months ended June 30, 2001 primarily as a result of
the expanded and reestablished locations and other costs that are incurred to
support these operations.

Income Taxes

The Company recorded income tax expense of $434,000 for the three months ended
June 30, 2002, resulting from the net income before taxes of $1,010,000 for the
quarter.




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 $813,000 at June 30, 2002, compared to $685,000 at
December 31, 2001 and $715,000 at June 30, 2001. The composition of
non-performing assets for each date is shown below.

|                                 |  |          |         |              |  |          |         |  |  |   |         | 
|-------------------------------- |  | -------- | ------- | ------------ |  | -------- | ------- |  |  | - | ------- | 
|                                 |  | June 30, |         | December 31, |  | June 30,
|                                 |  | 2002     |         | 2001         |  | 2001    
|                                 |  |          |         |              |  |         
|Non-accrual loans                |  | $        | 425,000 |              |  | $        | 302,000 |  |  | $ | 217,000 | 
|OREO, net of valuation allowance |  |          | 383,000 |              |  |          | 383,000 |  |  |   | 498,000 | 
|Repossessed collateral           |  |          | 5,000   |              |  |          |        |  |  |   |        | 
|                                 |  |          |         |              |  |          |         |  |  |   |         | 
|                                 |  | $        | 813,000 |              |  | $        | 685,000 |  |  | $ | 715,000 | 
|                                 |  |          |         |              |  |          |         |  |  |   |         | 

The ratio of non-performing assets to total loans and other real estate was
0.51% at June 30, 2002, 0.39% at December 31, 2001, and 0.53% at June 30, 2001.

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

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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
and delinquency trends, the amount of actual losses charged to the reserve in a
given period, and 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 $93,000 during the quarter ended June 30, 2002. The ratio of
allowance for loan losses to total loans was 1.48% at June 30, 2002. At
December 31, 2001 the ratio was 1.26% and at June 30, 2001 the ratio was 1.14%.
Excluding the balance of loans held for sale by the Bank, the ratio of
allowance for loan losses to loans was 1.85% at June 30, 2002, 1.89% at
December 31, 2001 and 1.62% at June 30, 2001. 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.

The Banks liquidity remains adequate to meet operating and loan funding
requirements. The Banks liquidity ratio at June 30, 2002 was 30.1%,
compared to 22.8% at December 31, 2001.

Management is committed to maintaining capital at a level sufficient to protect
depositors, provide for reasonable growth, and fully comply with all regulatory
requirements. Federal banking regulations establish certain capital adequacy
standards required to be maintained by banks. 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, 2002, the
Banks Tier I capital was 10.49% and total risk-based capital was 11.75%,
compared to 9.06% and 10.32% at December 31, 2001, respectively. At June 30,
2002, the Banks leverage ratio was 7.96% compared to 7.54% at December 31,
2001.

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
best judgment and beliefs and may include assumptions made by, and information
currently available to, management pursuant to safe harbor provisions of the
Private Securities Litigation Reform Act of 1995.

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; inaccuracy 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.

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Part II
OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K



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



| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Exhibit 99.1. Certification Pursuant to Section 906 of Sarbanes-Oxley
Act of 2002.



| | (b) |  | Reports on Form 8-K. No reports on Form 8-K were filed
during the quarter ended June 30, 2002.
| | --- |  | ----------------------------------------------------------------------------------------------

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SIGNATURES

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

|                                  |  |                                                            |  |                  | 
|--------------------------------- |  | ---------------------------------------------------------- |  | ---------------- | 
|Georgia-Carolina Bancshares, Inc. |  |                                                           
|                                  |  |                                                            |  |                 
|By:                               |  | /s/ Patrick G. Blanchard                                   |  | October 25, 2002
|                                  |  |                                                            |  |                 
|                                  |  | Patrick G. Blanchard
President and Chief Executive Officer |  | Date            




CERTIFICATIONS

I, Patrick G. Blanchard, certify that:

1.     I have reviewed the Quarterly Report on Form 10-QSB of Georgia-Carolina
Bancshares, Inc., as amended;

2.     Based on my knowledge, the quarterly report, as amended, does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by the quarterly report;

3.     Based on my knowledge, the financial statements, and other financial
information included in the quarterly report, as amended, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in the quarterly
report;

|                       |  |                                                           
|---------------------- |  | ----------------------------------------------------------
|Date: October 25, 2002 |  |                                                           
|                       |  |                                                           
|                       |  | /s/ Patrick G. Blanchard                                  
|                       |  |                                                           
|                       |  | Patrick G. Blanchard
President and Chief Executive Officer

I, James M. Thomas, certify that:

1.     I have reviewed the Quarterly Report on Form 10-QSB of Georgia-Carolina
Bancshares, Inc., as amended;

2.     Based on my knowledge, the quarterly report, as amended, does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by the quarterly report;

3.     Based on my knowledge, the financial statements, and other financial
information included in the quarterly report, as amended, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in the quarterly
report;

|                       |  |                                        
|---------------------- |  | ---------------------------------------
|Date: October 25, 2002 |  |                                        
|                       |  |                                        
|                       |  | /s/ James M. Thomas                    
|                       |  |                                        
|                       |  | James M. Thomas
Chief Financial Officer

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EXHIBIT INDEX

|            |  |                                                                        
|----------- |  | -----------------------------------------------------------------------
|Exhibit No. |  | Description of Exhibit                                                 
|            |  |                                                                        
|99.1        |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002