UNITED STATESSECURITIES AND EXCHANGE
COMMISSION Washington, D.C. 20549

# Form 10-K

(Mark One)

|[X] | Annual Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
|--- | ------------------------------------------------------------------------------

| | For the fiscal year ended December 31, 2003
| | -------------------------------------------

| | OR
| | --

| | Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934
| | ----------------------------------------------------------------------------------
| | For the transition period from __________ to ________                             

Commission file no.
00033021

GREER BANCSHARES INCORPORATED
(Name of Small Business Issuer in Its Charter)

|South Carolina                    |  | 57-1126200         
|--------------------------------- |  | -------------------
|(State or Other Jurisdiction      |  | (I.R.S. Employer   
|of Incorporation or Organization) |  | Identification No.)

|1111 W. Poinsett Street                  |  |           
|---------------------------------------- |  | ----------
|Greer, South Carolina                    |  | 29650     
|(Address of Principal Executive Offices) |  | (Zip Code)

(864) 877-2000Registrants Telephone Number, Including Area Code

Securities registered pursuant to Section 12(g) of the Act:  NoneCommon Stock, Par Value $5.00 per share 
Securities registered pursuant to Section 12(g) of the Act:   Common Stock

Indicate by check
whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 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 past 90 days.    Yes X   No

Indicate by check
if there is no disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
is not contained herein, and will be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check
whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).
Yes   No X

The aggregate market value of the
voting and non-voting common stock held by non-affiliates of the registrant (1,973,337
shares) as of March 22, 2004 was approximately $36,842,202. For the purpose of this
response, officers, directors and holders of 5% or more of the registrants common
stock are considered affiliates of the Registrant at that date.

The number of shares outstanding of
the registrants Common Stock as of March 22, 2004 was 2,428,406 shares of $5.00 par
value common stock.

DOCUMENTS INCORPORATED
BY REFERENCE

The Companys Annual Report to
Shareholders and its attachment for the year ended December 31, 2003 is incorporated by
reference in this Form 10-K in Part II, Items 5 through 8. The Companys Proxy
Statement for the Annual Meeting of Shareholders to be held on April 22, 2004 is
incorporated by reference in this Form 10-K in Part III, Items 10 through 14.

---

# TABLE OF CONTENTS

|Part I |  | Page
|------ |  | ----
|1.     |  |     
|2.     |  |     
|3.     |  |     
|4.     |  |     

|Part II |  | 
|------- |  | 
|5.      |  | 
|6.      |  | 
|7.      |  | 
|7a.     |  | 
|8.      |  | 
|9.      |  | 
|        |  | 
|9a.     |  | 

|Part III | 
|-------- | 
|10.      | 
|11.      | 
|12.      | 
|13       | 
|14.      | 

|Part IV | 
|------- | 
|15.     | 
|        | 
|        | 
|        | 
|        | 

2

---

# PART I

# Item 1. Description of
Business

This Report contains statements which
constitute forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and the Securities Exchange Act of 1934. These statements are based on many
assumptions and estimates and are not guarantees of future performance. Our actual results
may differ materially from those projected in any forward-looking statements, as they will
depend on many factors about which we are unsure, including many factors which are beyond
our control. The words may, would, could,
will, expect, anticipate, believe,
intend, plan, and estimate, as well as similar
expressions, are meant to identify such forward-looking statements. Potential risks and
uncertainties include, but are not limited to: significant increases in competitive
pressure in the banking and financial services industries; changes in the interest rate
environment which could reduce anticipated or actual margins; changes in political
conditions or the legislative or regulatory environment; general economic conditions,
either nationally or regionally and especially in primary service area, becoming less
favorable than expected resulting in, among other things, a deterioration in credit
quality; changes occurring in business conditions and inflation; changes in technology;
changes in monetary and tax policies; the level of allowance for loan loss; the rate of
delinquencies and amounts of charge-offs; the rates of loan growth; adverse changes in
asset quality and resulting credit risk-related losses and expenses; changes in the
securities markets; and other risks and uncertainties detailed from time to time in our
filings with the Securities and Exchange Commission.

# General

Greer Bancshares Incorporated was
formed in July 2001 as a one-bank holding company for Greer State Bank. All of the
outstanding common shares of the Bank were exchanged for common stock of the new holding
company at that time. The only current activity of the holding company is to hold its
investment in its banking subsidiary and it does not anticipate being traded on any
exchange. The Bank operates under a state charter and provides full banking services to
its clients. The Bank is subject to regulation by the Federal Deposit Insurance
Corporation and the South Carolina Board of Financial Institutions.

The Bank has been engaged in the
commercial banking business since its inception in January 1989 and has three banking
offices located in Greer, South Carolina. The Company is headquartered at 1111 W. Poinsett
Street, Greer, South Carolina 29650. The Banks first branch office was opened in
1992 in an existing bank building that was purchased and renovated to be used as a branch
office and operations center and is located at 601 North Main Street, Greer, South
Carolina 29650. The third branch office was built and opened in November 1998 and is
located at 871 South Buncombe Road, Greer, South Carolina 29650.

In 1997, the Bank began an
alternative investments function with the formation of Greer Financial
Services Corporation, which allows customers who want to earn a higher rate of return on
their money to invest in mutual funds, stock, annuities, etc. and is a wholly-owned
subsidiary of the Bank. Trust, international, or correspondent banking services are not
currently offered, nor contemplated at this time.

# Location and Service Area

The Companys banking subsidiary
was organized for the primary purpose of serving local banking needs in Greer and in the
small surrounding communities and has been primarily engaged in the business of attracting
deposits from the general public and using the deposits to make commercial, consumer, and
mortgage loans. In addition, deposits are also used to invest in acceptable investment
securities as defined by Bank policy.

Greer is located approximately 13
miles east of Greenville, South Carolina and approximately 15 miles west of Spartanburg,
South Carolina and has borders in both Greenville and Spartanburg counties of South
Carolina. The population of Greer was 16,843 according to 2000 census data, which was an
increase of 63.2% since the 1990 census.

3

---

# Deposits

The Company offers a full range of
banking services through its subsidiary, including checking, savings, brokered deposits
and other time deposits of various types, loans for business, real estate, personal use,
home improvements, automobiles, and a variety of other types of loans and services. In
addition, drive-up, safe deposit, and night depository facilities are offered. The Bank
solicits deposit accounts from individuals, businesses, associations and organizations and
governmental authorities.

# Lending Activities

General The Bank makes
and services both secured and unsecured loans to individuals and businesses in its market
area. The Bank strives for a balanced mix of consumer lending, commercial lending to small
and medium-sized businesses, and mortgage lending, both consumer and commercial. The
Banks portfolio consists of commercial, commercial real estate, real estate
construction, residential mortgage, consumer installment loans, other consumer loans, as
well as a small amount in lease financing and obligations of state and political
subdivisions. The lease financing is loans made to finance the leasing of equipment, and
the obligations of state and political subdivisions consists of loans made to a
municipality.

The Bank strives to diversify its
loan portfolio and limit loan concentrations to any borrower or industry. Management has
placed emphasis on the collateralization of loans with value-retaining assets and 93% of
the Banks loan portfolio is secured. As of December 31, 2003, 72% of the total loan
portfolio is secured by real estate.

Commercial Loans  The
commercial portion of the portfolio is diversified and includes loans secured by non-real
estate collateral to various types of small to mid-sized businesses. The emphasis is on
businesses with financial stability and local, well-known management located in Greer and
the surrounding communities. Collateral for commercial loans includes, but is not limited
to, inventory, equipment, vehicles, and accounts receivable. Commercial loans generally
have more risk than other types of loans made by the Bank since there are more factors
that can cause a default. The Bank must evaluate the quality of a companys
management, capitalization, and competition, as well as its profitability. The Bank
manages the risk by dealing with locally-owned and managed businesses and by often
requiring personal guarantees and collateral from owners and/or officers.

Commercial Real Estate Loans
 The commercial real estate loan portfolio consists largely of mortgage loans
secured by commercial properties located in the communities served by the Bank. A
significant portion of these loans were made to fund the acquisition of real estate and/or
buildings for commercial, industrial, office and retail use. Generally, the maximum
loan-to-value ratio applicable to improved commercial properties is 85%. The real estate
construction portion of the loan portfolio consists primarily of loans made to finance the
on-site construction of 1-4 family residences, commercial properties, and medical or
business offices. The maximum loan-to-value ratio applicable to commercial and 1-4 family
residential construction loans is 85%. There is not as much risk associated with
commercial real estate as with other commercial loans, but more risk than 1-to-4 family
residential mortgages. The Bank deals primarily with owner-occupied businesses, rather
than speculative lease space. Limiting the loan-to-value ratio is another way the risk is
managed.

Residential Real Estate Loans
 The 1-to-4 family residential real estate portfolio is predominantly comprised of
loans extended for owner-occupied residential properties. These loans are typically
secured by first mortgages on the properties financed, and generally do not exceed fifteen
years. These loans generally have a maximum loan-to-value ratio of 85% and the majority
has a fixed rate of interest. The Bank is currently not booking fixed rate residential
mortgages in-house, but is originating them (collecting an origination fee) and placing
them with an investor. The 1-to-4 family residential real estate category includes home
equity lines of credit which have an interest rate indexed to the prime lending rate. Home
equity lines generally have a maximum loan-to-value ratio of 89.9%. The loan-to-value
ratios on mortgages minimizes the risk on these loans.

4

---

Consumer Loans  The
consumer loan portfolio consists of both secured and unsecured loans to individuals for
household, family, and other personal expenditures such as automobile financing, home
improvements, and recreational and educational purposes. Consumer loans are typically
structured with fixed rates of interest and full amortization on principal and interest
within three to five years. The maximum loan-to-value ratio applicable to consumer loans
is generally 85%. This category of loans also includes revolving credit products such as
checking overdraft protection. Consumer loans are either unsecured or are secured with
various forms of collateral, other than real estate. The Bank minimizes risk by dealing
with local customers who have an existing banking relationship. Bank policy prohibits
unsecured debt consolidation loans.

Loan Risk Management 
The Bank has procedures and controls in place designed to analyze potential risks and to
support the growth of a profitable and high quality loan portfolio. A loan rating system
is used by the Bank to monitor the loan portfolio and to determine the adequacy of the
allowance for loan losses. The Bank invests in loans in Greer and the surrounding
communities, and this allows for easier monitoring of credit risks. The majority of the
loan portfolio consists of loans to consumers and loans to small and mid-sized businesses.
As of December 31, 2003, approximately 93% of the portfolio is secured. A bank consulting
firm is employed to perform a periodic review of selected credits to identify heightened
risks and monitor collateral position. Some of the factors that could contribute to
increased risk in the loan portfolio are changes in economic conditions in the Banks
market area, changes in interest rates, and reduced collateral values. There are no loans
to foreign countries in the loan portfolio. As of December 31, 2003, the legal lending
limit amount for the Bank to lend to any one borrower was approximately $2,875,000.

# Other Banking Services

Other banking services provided
include travelers checks, safe deposit boxes, direct deposit of payroll and social
security checks, as well as automatic drafts for various accounts. Automated Teller
Machine (ATM) services are provided by STAR ATM Network, which allows access through ATMs
nationwide. The Bank has two drive-up ATMs, located at its offices at 1111 W. Poinsett
Street and 871 S. Buncombe Road. The Bank offers Mastercard and Visa credit cards to
qualifying customers through a correspondent bank and has an automated telephone banking
system (TELEBANKER). The TELEBANKER system allows the Banks customers to access
information concerning their accounts, transfer funds, and make payments by telephone.

The Bank also offers an internet
online banking service. Its website is www.greerstatebank.com and the Bank believes
that the website is attractive, functional and user friendly. Bank customers who have
authorized access to the Banks website have the capability to make account
inquiries, view account histories, transfer funds from one account to the other and make
payments on outstanding loans. The Bank also offers bill payment services through its
website which allows the Banks customers to pay their bills online.

# Competition

The Bank competes with several major
banks which dominate the commercial banking industry in their service areas and in South
Carolina. In addition, the Bank competes with other community banks, savings institutions
and credit unions. In Greer, there are 16 competitor bank branches (none of which are
headquartered in Greer), one savings institution branch (headquartered in Greer), and one
credit union branch (headquartered in nearby Greenville, South Carolina). As of June 30,
2003, the Bank held approximately 25.09% of the FDIC insured deposits in the Greer market.

# Employees

As of December 31, 2003, the Bank
employed 72 employees, 57 of whom are full-time. The Company does not have any employees
other than its officers.

5

---

# SUPERVISION AND
REGULATION

Both the Company and the Bank are
subject to extensive state and federal banking laws and regulations which impose specific
requirements or restrictions on and provide for general regulatory oversight of virtually
all aspects of operations. These laws and regulations are generally intended to protect
depositors, not shareholders. The following summary is qualified by reference to the
statutory and regulatory provisions discussed. Changes in applicable laws or regulations
may have a material effect on our business and prospects. Beginning with the enactment of
the Financial Institution Report Recovery and Enforcement Act in 1989 and following with
the FDIC Improvement Act in 1991 and the Gramm-Leach-Bliley Act in 1999, numerous
additional regulatory requirements have been placed on the banking industry in the past
several years, and additional changes have been proposed. Our operations may be affected
by legislative changes and the policies of various regulatory authorities. We cannot
predict the effect that fiscal or monetary policies, economic control, or new federal or
state legislation may have on our business and earnings in the future.

The following discussion is not
intended to be a complete list of all the activities regulated by the banking laws or of
the impact of such laws and regulations on our operations. It is intended only to briefly
summarize some material provisions.

# USA Patriot Act of 2001

In October 2001, the USA Patriot Act
of 2001 was enacted in response to the terrorist attacks in New York, Pennsylvania and
Washington D.C. which occurred on September 11, 2001. The Patriot Act is intended to
strengthen U.S. law enforcements and the intelligence communities abilities to
work cohesively to combat terrorism on a variety of fronts. The potential impact of the
Patriot Act on financial institutions of all kinds is significant and wide ranging. The
Patriot Act contains sweeping anti-money laundering and financial transparency laws and
imposes various regulations, including standards for verifying client identification at
account opening, and rules to promote cooperation among financial institutions, regulators
and law enforcement entities in identifying parties that may be involved in terrorism or
money laundering.

# Check 21

On October 28, 2003, President Bush
signed into law the Check Clearing for the 21st Century Act, also known as Check 21. 
The new law, which is not effective until October 28, 2004, gives substitute
checks, such as a digital image of a check and copies made from that image, the same
legal standing as the original paper check. Some of the major provisions include:

| | o | Allows check truncation without making it mandatory;
| | - | ----------------------------------------------------

| | o | Demands that every financial institution communicate to accountholders in writing a
description of its substitute check processing program and their rights under the law;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Legalizes substitutions for and replacements of paper checks without agreement from consumers;
| | - | ----------------------------------------------------------------------------------------------

| | o | Keeps in place the previously mandated electronic collection and return of checks between
financial institutions only when individual agreements are in place;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Cautions that when accountholders request verification, financial institutions must
produce the original check (or a copy that accurately represents the original) and
demonstrate that the account debit was accurate and valid; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Requires recrediting of funds to an individuals account on the next business
day after a consumer proves the financial institution has erred.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------

This new legislation will likely have
a dramatic impact on bank capital spending as many financial institutions assess
whether technological or operational changes are necessary to stay competitive and take
advantage of the new opportunities presented by Check 21.

6

---

# Greer Bancshares
Incorporated

Because it owns the outstanding
capital stock of the Bank, the Company is a bank holding company under the federal Bank
Holding Company Act of 1956 and the South Carolina Banking and Branching Efficiency Act.

The Bank Holding Company Act.
Under the Bank Holding Company Act, the Company is subject to periodic examination by the
Federal Reserve and is required to file periodic reports of its operations and any
additional information that the Federal Reserve may require. Our activities at the bank
and holding company level are limited to:

| | o | banking and managing or controlling banks;
| | - | ------------------------------------------

| | o | furnishing services to or performing services for its subsidiaries; and
| | - | -----------------------------------------------------------------------

| | o | engaging in other activities that the Federal Reserve determines to be so closely related
to banking and managing or controlling banks as to be a proper incident thereto.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Investments, Control, and
Activities. With certain limited exceptions, the Bank Holding Company Act requires
every bank holding company to obtain the prior approval of the Federal Reserve before:

| | o | acquiring substantially all the assets of any bank;
| | - | ---------------------------------------------------

| | o | acquiring direct or indirect ownership or control of any voting shares of any bank if
after the acquisition it would own or control more than 5% of the voting shares of such
bank (unless it already owns or controls the majority of such shares); or
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | merging or consolidating with another bank holding company.
| | - | -----------------------------------------------------------

In addition, and subject to certain
exceptions, the Bank Holding Company Act and the Change in Bank Control Act, together with
regulations thereunder, require Federal Reserve approval prior to any person or company
acquiring control of a bank holding company. Control is conclusively presumed
to exist if an individual or company acquires 25% or more of any class of voting
securities of a bank holding company. Control is rebuttably presumed to exist if a person
acquires 10% or more, but less than 25%, of any class of voting securities and either the
company has registered securities under Section 12 of the Securities Exchange Act of 1934
or no other person owns a greater percentage of that class of voting securities
immediately after the transaction. The companys common stock is registered under the
Securities Exchange Act of 1934. The regulations provide a procedure for challenge of the
rebuttable control presumption.

Under the Bank Holding Company Act, a
bank holding company is generally prohibited from engaging in, or acquiring direct or
indirect control of more than 5% of the voting shares of any company engaged in nonbanking
activities unless the Federal Reserve Board, by order or regulation, has found those
activities to be so closely related to banking or managing or controlling banks as to be a
proper incident thereto. Some of the activities that the Federal Reserve Board has
determined by regulation to be proper incidents to the business of a bank holding company
include:

| | o | making or servicing loans and
certain types of leases;
| | - | ------------------------------------------------------

| | o | engaging in certain insurance and discount brokerage
activities;
| | - | ----------------------------------------------------------------

| | o | performing certain data processing services;
| | - | --------------------------------------------

| | o | acting in certain
circumstances as a fiduciary or investment or financial adviser;
| | - | ----------------------------------------------------------------------------------

| | o | owning savings
associations; and
| | - | --------------------------------

| | o | making investments in certain corporations or projects designed
primarily to promote community welfare.
| | - | -------------------------------------------------------------------------------------------------------

The Federal Reserve Board imposes
certain capital requirements on the Company under the Bank Holding Company Act, including
a minimum leverage ratio and a minimum ratio of qualifying capital to
risk-weighted assets. These requirements are described below under Capital
Regulations. Subject to its capital requirements and certain other restrictions, the
company is able to borrow money to make a capital contribution to the Bank, and these
loans may be repaid from dividends paid from the Bank to the Company. Our ability to pay
dividends is subject to regulatory restrictions as described below in Greer State
Bank  Dividends. The Company is also able to raise capital for contribution to
the Bank by issuing

7

---

securities without having to receive regulatory approval, subject to
compliance with federal and state securities laws.

Source of Strength;
Cross-Guarantee. In accordance with Federal Reserve Board policy, the Company is
expected to act as a source of financial strength to the Bank and to commit resources to
support the Bank in circumstances in which the Company might not otherwise do so. Under
the Bank Holding Company Act, the Federal Reserve Board may require a bank holding company
to terminate any activity or relinquish control of a nonbank subsidiary, other than a
nonbank subsidiary of a bank, upon the Federal Reserve Boards determination that
such activity or control constitutes a serious risk to the financial soundness or
stability of any subsidiary depository institution of the banks holding company.
Further, federal bank regulatory authorities have additional discretion to require a bank
holding company to divest itself of any bank or nonbank subsidiary if the agency
determines that divestiture may aid the depository institutions financial condition.

The Gramm-Leach-Bliley Act.
The Gramm-Leach-Bliley Act, previously known as the Financial Services Modernization Act
of 1999, was signed into law on November 12, 1999. Among other things, the Act repeals the
restrictions on banks affiliating with securities firms contained in sections 20 and 32 of
the Glass-Steagall Act. The Act also permits bank holding companies that become financial
holding companies to engage in a statutorily provided list of financial activities,
including insurance and securities underwriting and agency activities, merchant banking,
and insurance company portfolio investment activities. The Act also authorizes activities
that are complementary to financial activities.

The Act is intended, in part, to
grant to community banks certain powers as a matter of right that larger institutions have
accumulated on an ad hoc basis. Nevertheless, the Act may have the result of increasing
the amount of competition that we face from larger institutions and other types of
companies. In fact, it is not possible to predict the full effect that the Act will have
on us.

South Carolina State
Regulation. As a bank holding company registered under the South Carolina Banking and
Branching Efficiency Act, we are subject to limitations on sale or merger and to
regulation by the South Carolina Board of Financial Institutions. We must receive the
Boards approval prior to engaging in the acquisition of banking or nonbanking
institutions or assets, and we must file periodic reports with respect to our financial
condition and operations, management, and intercompany relationships between the Company
and its subsidiaries.

# Greer State Bank

The Bank operates as a South Carolina
state chartered bank and is subject to examination by the South Carolina Board of
Financial Institutions. Deposits in the bank are insured by the FDIC up to a maximum
amount, which is generally $100,000 per depositor subject to aggregation rules.

The South Carolina Board of Financial
Institutions and the FDIC regulate or monitor virtually all areas of the banks
operations, including:

| | o | security devices and procedures;
| | - | --------------------------------

| | o | adequacy of capitalization and loss reserves;
| | - | ---------------------------------------------

| | o | loans;
| | - | ------

| | o | investments;
| | - | ------------

| | o | borrowings;
| | - | -----------

| | o | deposits;
| | - | ---------

| | o | mergers;
| | - | --------

| | o | issuances of securities;
| | - | ------------------------

| | o | payment of dividends;
| | - | ---------------------

| | o | interest rates payable on deposits;
| | - | -----------------------------------

8

---

| | o | interest rates or fees chargeable on loans;
| | - | -------------------------------------------

| | o | establishment of branches;
| | - | --------------------------

| | o | corporate reorganizations;
| | - | --------------------------

| | o | maintenance of books and records; and
| | - | -------------------------------------

| | o | adequacy of staff training to carry on safe lending and deposit gathering practices.
| | - | ------------------------------------------------------------------------------------

The South Carolina Board of Financial
Institutions requires the Bank to maintain specified capital ratios and imposes
limitations on the Banks aggregate investment in real estate, bank premises, and
furniture and fixtures. The FDIC requires the Bank to prepare quarterly reports on the
Banks financial condition and to conduct an annual audit of its financial affairs in
compliance with its minimum standards and procedures.

Under the FDIC Improvement Act, all
insured institutions must undergo regular on site examinations by their appropriate
banking agency. The cost of examinations of insured depository institutions and any
affiliates may be assessed by the appropriate agency against each institution or affiliate
as it deems necessary or appropriate. Insured institutions are required to submit annual
reports to the FDIC, their federal regulatory agency, and their state supervisor when
applicable. The FDIC Improvement Act directs the FDIC to develop a method for insured
depository institutions to provide supplemental disclosure of the estimated fair market
value of assets and liabilities, to the extent feasible and practicable, in any balance
sheet, financial statement, report of condition or any other report of any insured
depository institution. The FDIC Improvement Act also requires the federal banking
regulatory agencies to prescribe, by regulation, standards for all insured depository
institutions and depository institution holding companies relating, among other things, to
the following:

| | o | internal controls;
| | - | ------------------

| | o | information systems and audit systems;
| | - | --------------------------------------

| | o | loan documentation;
| | - | -------------------

| | o | credit underwriting;
| | - | --------------------

| | o | interest rate risk exposure; and
| | - | --------------------------------

| | o | asset quality.
| | - | --------------

Deposit Insurance. The FDIC
has adopted a risk-based assessment system for determining an insured depository
institutions insurance assessment rate. The system that takes into account the risks
attributable to different categories and concentrations of assets and liabilities. An
institution is placed into one of three capital categories: (1) well capitalized; (2)
adequately capitalized; or (3) undercapitalized. The FDIC also assigns an institution to
one of three supervisory subgroups, based on the FDICs determination of the
institutions financial condition and the risk posed to the deposit insurance funds.
Assessments range from 0 to 27 cents per $100 of deposits, depending on the
institutions capital group and supervisory subgroup. In addition, the FDIC imposes
assessments to help pay off the $780 million in annual interest payments on the $8 billion
Financing Corporation (FICO) bonds issued in the late 1980s as part of the government
rescue of the thrift industry. New changes have been proposed recently regarding these
assessments, including an increase in the amount of the FDIC insurance, but at this time
it is not possible to predict whether the changes will be implemented or what their effect
would be. Generally, we expect that increases in deposit insurance premiums or changes in
risk classification will increase the banks cost of funds, and we may not be able to
pass these costs on to our customers. Although we pay a quarterly FICO assessment, the
FDIC assessment rate on our bank deposits currently is zero, but may change in the future.
The FDIC may increase or decrease the assessment rate schedule on a semiannual basis. An
increase in the BIF assessment rate could have a material adverse effect on our earnings,
depending on the amount of the increase.

The FDIC may terminate its insurance
of deposits if it finds that the institution has engaged in unsafe and unsound practices,
is in an unsafe or unsound condition to continue operations, or has violated any
applicable law, regulation, rule, order, or condition imposed by the FDIC.

Transactions With Affiliates and
Insiders.The Bank is subject to the provisions of Section 23A of the Federal Reserve
Act, which places limits on the amount of loans or extensions of credit to, or investments
in, or certain other transactions with, affiliates and on the amount of advances to third
parties collateralized

9

---

by the securities or obligations of affiliates. The aggregate of
all covered transactions is limited in amount, as to any one affiliate, to 10% of the
Banks capital and surplus and, as to all affiliates combined, to 20% of the
Banks capital and surplus. Furthermore, within the foregoing limitations as to
amount, each covered transaction must meet specified collateral requirements. Compliance
is also required with certain provisions designed to avoid the taking of low quality
assets.

The Bank is also subject to the
provisions of Section 23B of the Federal Reserve Act which, among other things, prohibits
an institution from engaging in certain transactions with certain affiliates unless the
transactions are on terms substantially the same, or at least as favorable to such
institution or its subsidiaries, as those prevailing at the time for comparable
transactions with nonaffiliated companies. The Bank is subject to certain restrictions on
extensions of credit to executive officers, directors, certain principal shareholders, and
their related interests. Such extensions of credit (i) must be made on substantially the
same terms, including interest rates and collateral, as those prevailing at the time for
comparable transactions with third parties and (ii) must not involve more than the normal
risk of repayment or present other unfavorable features.

The Federal Reserve Board has
recently issued Regulation W, which codifies prior regulations under Sections 23A and 23B
of the Federal Reserve Act and interpretative guidance with respect to affiliate
transactions. Regulation W incorporates the exemption from the affiliate transaction rules
but expands the exemption to cover the purchase of any type of loan or extension of credit
from an affiliate. In addition, under Regulation W:

| | o | a bank and its subsidiaries may not purchase a low-quality asset from an affiliate;
| | - | -----------------------------------------------------------------------------------

| | o | covered transactions and other specified transactions between a bank or its subsidiaries
and an affiliate must be on terms and conditions that are consistent with safe and sound
banking practices; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | with some exceptions, each loan or extension of credit by a bank to an affiliate must be
secured by collateral with a market value ranging from 100% to 130%, depending on the type
of collateral, of the amount of the loan or extension of credit.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Regulation W generally excludes all
non-bank and non-savings association subsidiaries of banks from treatment as affiliates,
except to the extent that the Federal Reserve Board decides to treat these subsidiaries as
affiliates. Concurrently with the adoption of Regulation W, the Federal Reserve Board has
proposed a regulation which would further limit the amount of loans that could be
purchased by a bank from an affiliate to not more than 100% of the banks capital and
surplus. This regulation has not yet been adopted.

Dividends.    
          The Bank is subject to regulatory restrictions on the payment of dividends,
          including a prohibition of payment of dividends from its capital. All dividends
          must be paid out of the undivided profits then on hand, after deducting
          expenses, including losses and bad debts. The Bank is authorized to pay cash
          dividends up to 100% of net income in any calendar year without obtaining the
          prior approval of the South Carolina Board of Financial Institutions provided
          that the Bank received a composite rating of one or two at the last federal or
          state regulatory examination. The Bank must obtain approval from the South
          Carolina Board of Financial Institutions prior to the payment of any other cash
          dividends. In addition, under the FDIC Improvement Act, the Bank may not pay a
          dividend if, after paying the dividend, the Bank would be undercapitalized. See
          Capital Regulations below.

Branching.    
          Under current South Carolina law, we may open bank branch offices throughout
          South Carolina with the prior approval of the South Carolina Board of Financial
          Institutions. In addition, with prior regulatory approval, the Bank may acquire
          existing banking operations in South Carolina. Furthermore, federal legislation
          has recently been passed which permits interstate branching. The new law permits
          out-of-state acquisitions by bank holding companies, interstate branching by
          banks if allowed by state law, interstate merging by banks, and de novo
          branching by banks if allowed by state law.

Community Reinvestment Act.
The Community Reinvestment Act requires that, in connection with examinations of financial
institutions within their respective jurisdictions, a financial institutions primary
federal regulator (this is the FDIC for our bank) shall evaluate the record of each
financial institution in meeting the credit needs of its local community, including low
and moderate income neighborhoods.

10

---

These factors are also considered in evaluating  mergers,  acquisitions,  and  applications to open a branch or
facility. Failure to adequately meet these criteria could impose additional requirements
and limitations on the bank. Under the Gramm-Leach-Bliley Act, banks with
aggregate assets of not more than $250 million will be subject to a Community
Reinvestment Act examination only once every 60 months if the bank receives an
outstanding rating, once every 48 months if it receives a satisfactory rating,
and as needed if the rating is less than satisfactory. Additionally, under the
Gramm-Leach-Bliley Act, banks are required to publicly disclose the terms of
various Community Reinvestment Act-related agreements.

The Gramm-Leach-Bliley Act.
Under the Gramm-Leach-Bliley Act, subject to certain conditions imposed by their
respective banking regulators, national and state-chartered banks are permitted to form
financial subsidiaries that may conduct financial or incidental activities,
thereby permitting bank subsidiaries to engage in certain activities that previously were
impermissible. The Gramm-Leach-Bliley Act imposes several safeguards and restrictions on
financial subsidiaries, including that the parent banks equity investment in the
financial subsidiary be deducted from the banks assets and tangible equity for
purposes of calculating the banks capital adequacy. In addition, the
Gramm-Leach-Bliley Act imposes new restrictions on transactions between a bank and its
financial subsidiaries similar to restrictions applicable to transactions between banks
and nonbank affiliates.

The Gramm-Leach-Bliley Act also
contains provisions regarding consumer privacy. These provisions require financial
institutions to disclose their policy for collecting and protecting confidential
information. Customers generally may prevent financial institutions from sharing personal
financial information with nonaffiliated third parties except for third parties that
market an institutions own products and services. Additionally, financial
institutions generally may not disclose consumer account numbers to any nonaffiliated
third party for use in telemarketing, direct mail marketing, or other marketing to the
consumer.

Other Regulations. Interest
and other charges collected or contracted for by the Bank are subject to state usury laws
and federal laws concerning interest rates. The Banks loan operations are also
subject to federal laws applicable to credit transactions, such as:

| | o | the federal Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers;
| | - | ----------------------------------------------------------------------------------------------

| | o | the Home Mortgage Disclosure Act of 1975, requiring financial institutions to provide
information to enable the public and public officials to determine whether a financial
institution is fulfilling its obligation to help meet the housing needs of the community
it serves;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | the Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed
or other prohibited factors in extending credit;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------

| | o | the Fair Credit Reporting Act of
1978, governing the use and provision of information to credit reporting agencies;
| | - | -------------------------------------------------------------------------------------------------------------------

| | o | the
Fair Debt Collection Act, governing the manner in which consumer debts may be collected by
collection agencies; and
| | - | -----------------------------------------------------------------------------------------------------------------------

| | o | the rules and regulations of the various federal agencies
charged with the responsibility of implementing such federal laws.
| | - | ----------------------------------------------------------------------------------------------------------------------------

The deposit operations of the Bank
also are subject to:

| | o | the Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of
consumer financial records and prescribes procedures for complying with administrative
subpoenas of financial records; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | the Electronic Funds Transfer Act and Regulation E issued by the Federal Reserve Board to
implement that act, which governs automatic deposits to and withdrawals from deposit
accounts and customers rights and liabilities arising from the use of automated
teller machines and other electronic banking services.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Capital Regulations. The
federal bank regulatory authorities have adopted risk-based capital guidelines for banks
and bank holding companies that are designed to make regulatory capital requirements more
sensitive to differences in risk profiles among banks and bank holding companies and
account for off-balance sheet items. The guidelines are minimums, and the federal
regulators have noted that banks and

11

---

bank holding companies
contemplating significant expansion programs should not allow expansion to diminish their
capital ratios and should maintain ratios in excess of the minimums. We have not received
any notice indicating that either the company or the bank is subject to higher capital
requirements. The current guidelines require all bank holding companies and
federally-regulated banks to maintain a minimum risk-based total capital ratio equal to
8%, of which at least 4% must be Tier 1 capital. Tier 1 capital includes common
shareholders equity, qualifying perpetual preferred stock, and minority interests in
equity accounts of consolidated subsidiaries, but excludes goodwill and most other
intangibles and excludes the allowance for loan and lease losses. Tier 2 capital includes
the excess of any preferred stock not included in Tier 1 capital, mandatory convertible
securities, hybrid capital instruments, subordinated debt and intermediate term-preferred
stock, and general reserves for loan and lease losses up to 1.25% of risk-weighted assets.

Under these guidelines, banks
and bank holding companies assets are given risk-weights of 0%, 20%, 50%, or 100%.
In addition, certain off-balance sheet items are given credit conversion factors to
convert them to asset equivalent amounts to which an appropriate risk-weight applies.
These computations result in the total risk-weighted assets. Most loans are assigned to
the 100% risk category, except for first mortgage loans fully secured by residential
property and, under certain circumstances, residential construction loans, both of which
carry a 50% rating. Most investment securities are assigned to the 20% category, except
for municipal or state revenue bonds, which have a 50% rating, and direct obligations of
or obligations guaranteed by the United States Treasury or United States Government
agencies, which have a 0% rating.

The federal bank regulatory
authorities have also implemented a leverage ratio, which is equal to Tier 1 capital as a
percentage of average total assets less intangibles, to be used as a supplement to the
risk-based guidelines. The principal objective of the leverage ratio is to place a
constraint on the maximum degree to which a bank holding company may leverage its equity
capital base. The minimum required leverage ratio for top-rated institutions is 3%, but
most institutions are required to maintain an additional cushion of at least 100 to 200
basis points.

The FDIC Improvement Act established
a new capital-based regulatory scheme designed to promote early intervention for troubled
banks which requires the FDIC to choose the least expensive resolution of bank failures.
The new capital-based regulatory framework contains five categories of compliance with
regulatory capital requirements, including well capitalized, adequately
capitalized, undercapitalized, significantly
undercapitalized, and critically undercapitalized. To qualify as a
well capitalized institution, a bank must have a leverage ratio of no less
than 5%, a Tier 1 risk-based ratio of no less than 6%, and a total risk-based capital
ratio of no less than 10%, and the bank must not be under any order or directive from the
appropriate regulatory agency to meet and maintain a specific capital level. Currently, we
qualify as well capitalized.

Under the FDIC Improvement Act
regulations, the applicable agency can treat an institution as if it were in the next
lower category if the agency determines (after notice and an opportunity for hearing) that
the institution is in an unsafe or unsound condition or is engaging in an unsafe or
unsound practice. The degree of regulatory scrutiny of a financial institution increases,
and the permissible activities of the institution decreases, as it moves downward through
the capital categories. Institutions that fall into one of the three undercapitalized
categories may be required to do some or all of the following:

| | o | submit a capital restoration plan;
| | - | ----------------------------------

| | o | raise additional capital;
| | - | -------------------------

| | o | restrict their growth, deposit
interest rates, and other activities;
| | - | --------------------------------------------------------------------

| | o | improve their management;
| | - | -------------------------

| | o | eliminate management
fees; or
| | - | -----------------------------

| | o | divest themselves of all or a part of their operations.
| | - | -------------------------------------------------------

A bank that is not well
capitalized is also subject to certain limitations relating to so-called
brokered deposits. Bank holding companies controlling financial institutions
can be called upon to boost the institutions capital and to partially guarantee the
institutions performance under their capital restoration plans.

12

---

These capital guidelines can affect
us in several ways. If we grow at a rapid pace, our capital may be depleted too quickly,
and a capital infusion from the holding company may be necessary which could impact our
ability to pay dividends. Our capital levels currently are adequate; however, rapid
growth, poor loan portfolio performance, poor earnings performance, or a combination of
these factors could change our capital position in a relatively short period of time.

Failure to meet these capital
requirements would mean that a bank would be required to develop and file a plan with its
primary federal banking regulator describing the means and a schedule for achieving the
minimum capital requirements. In addition, such a bank would generally not receive
regulatory approval of any application that requires the consideration of capital
adequacy, such as a branch or merger application, unless the bank could demonstrate a
reasonable plan to meet the capital requirement within a reasonable period of time.

Enforcement Powers. The
Financial Institution Report Recovery and Enforcement Act expanded and increased civil and
criminal penalties available for use by the federal regulatory agencies against depository
institutions and certain institution-affiliated parties.
Institution-affiliated parties primarily include management, employees, and agents of a
financial institution, as well as independent contractors and consultants such as
attorneys and accountants and others who participate in the conduct of the financial
institutions affairs. These practices can include the failure of an institution to
timely file required reports or the filing of false or misleading information or the
submission of inaccurate reports. Civil penalties may be as high as $1,000,000 a day for
such violations. Criminal penalties for some financial institution crimes have been
increased to 20 years. In addition, regulators are provided with greater flexibility to
commence enforcement actions against institutions and institution-affiliated parties.
Possible enforcement actions include the termination of deposit insurance. Furthermore,
banking agencies power to issue cease-and-desist orders were expanded. Such orders
may, among other things, require affirmative action to correct any harm resulting from a
violation or practice, including restitution, reimbursement, indemnification or guarantees
against loss. A financial institution may also be ordered to restrict its growth, dispose
of certain assets, rescind agreements or contracts, or take other actions as determined by
the ordering agency to be appropriate.

Effect of Governmental Monetary
Policies. Our earnings are affected by domestic economic conditions and the monetary
and fiscal policies of the United States government and its agencies. The Federal Reserve
Banks monetary policies have had, and are likely to continue to have, an important
impact on the operating results of commercial banks through its power to implement
national monetary policy in order, among other things, to curb inflation or combat a
recession. The monetary policies of the Federal Reserve Board have major effects upon the
levels of bank loans, investments and deposits through its open market operations in
United States government securities and through its regulation of the discount rate on
borrowings of member banks and the reserve requirements against member bank deposits. It
is not possible to predict the nature or impact of future changes in monetary and fiscal
policies.

# Item 2. Description of
Property

As of December 31, 2003 the Bank had
three banking facilities. The corporate headquarters and main office is located on a
two-acre tract of land at the corner of West Poinsett Street and Pennsylvania Avenue, in
the city limits of Greer. The address is 1111 West Poinsett Street, Greer, South Carolina
29650. The building contains approximately 15,500 square feet. In the present facility,
there are four teller stations, two customer service offices, twelve additional private
offices, and three drive-in teller windows located on the first floor. The vault contains
555 safe deposit boxes. The second floor consists of ten private offices, the Board of
Directors room, a storage vault, a training facility, and a large work area which
houses eight modular work stations. A large basement was added to be used as a storage
area for supplies and other items. The basement contains a locked storage vault and locked
storage room. There are 101 parking spaces on the premises.

The operations functions (including
data processing) are located at 601 North Main Street, Greer, South Carolina 29650 where a
branch banking office is also located. The property was obtained from another financial
institution in 1992. The banking office consists of two private offices, two customer
service

13

---

desks, four teller stations, and two
drive-in teller windows. The cash vault contains 232 safe deposit boxes. The basement of
the North Main Street building is used as the bookkeeping area of the Bank. It consists of
10 modular workstations, two private offices and a large storage vault.

On November 2, 1998, the Bank opened
a full-service branch banking facility located on 2.27 acres at 871 South Buncombe Road,
Greer, South Carolina 29650. The banking facility consists of three private offices, one
customer service desk, three teller stations, two drive-in teller windows, four
drive-through lanes, and a drive-up ATM. The cash vault contains 138 safe deposit boxes.

All buildings and properties are
owned by the Bank without encumbrances and no property is currently leased.

# Item 3. Legal Proceedings

Neither the Company nor the Bank is a
party to, nor is any of their property the subject of, any material pending legal
proceedings incidental to the business of the Company or the Bank.

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

No matter was submitted to a vote of
security holders during the fourth quarter of the fiscal year covered by this report.

# PART II

# Item 5. Market for
Common Equity and Related Security Holders Matters

In response to this Item, the
information contained on page 18 of the attachment to the Companys Annual Report to
Shareholders for the year ended December 31, 2003 entitled Stock Information and Dividend
History is incorporated herein by reference.

# Item 6. Selected
Financial Data

In response to this Item, the
information contained on pages 2 through 3 of the attachment to the Companys Annual
Report to Shareholders for the year ended December 31, 2003 is incorporated herein by
reference.

# Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations

In response to this Item, the
information contained on pages 4 through 18 of the attachment to the Companys Annual
Report to Shareholders for the year ended December 31, 2003 is incorporated herein by
reference.

# Item 7a. Quantitative
and Qualitative Disclosures about Market Risk

In response to this Item, the
information contained on pages 7 through 8 of the attachment to the Companys Annual
Report to Shareholders for the year ended December 31, 2003 entitled Interest Rate
Sensitivity Analysis is incorporated herein by reference.

# Item 8. Financial
Statements and Supplementary Data

In response to this Item, the
information contained on pages 8 through 25 of the Companys Annual Report to
Shareholders for the year ended December 31, 2003 is incorporated herein by reference.

# Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

None

14

---

# Item 9a. Controls and
Procedures

As of the end of the period covered
by this report, we carried out an evaluation, under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of our disclosure controls and procedures as defined in
Exchange Act Rule 13a-15(e). Based upon that evaluation, our Chief Executive Officer and
Chief Financial Officer have concluded that our current disclosure controls and procedures
are effective as of December 31, 2003.

The design of any system of controls
and procedures is based in part upon certain assumptions about the likelihood of future
events. There can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions, regardless of how remote.

# PART III

# Item 10. Directors and
Executive Officers of the Registrant

In response to this Item, the
information contained on pages 4 through 5 and pages 11 through 12 of the Companys
Proxy Statement for the Annual Meeting of Shareholders to be held on April 22, 2004 is
incorporated herein by reference.

We have adopted a Code of Ethics that
applies to the Companys Directors and Senior Officers in accordance with the
Sarbanes-Oxley Corporate Responsibility Act of 2002 that includes our principal executive
officer and principal financial officer. The Code of Ethics is available without charge to
anyone upon written request. Shareholders should contact the Companys Chief
Financial Officer at the Company offices to obtain a copy.

# Item 11. Executive
Compensation

In response to this Item, the
information contained on pages 12 and 15 of the Companys Proxy Statement for the
Annual Meeting of Shareholders to be held on April 22, 2004 is incorporated herein by
reference.

# Item 12. Security
Ownership of Certain Beneficial Owners and Management

In response to this Item, the
information contained on page 10 of the Companys Proxy Statement for the Annual
Meeting of Shareholders to be held on April 22, 2004 is incorporated herein by reference.
In addition, information under the sub-heading Equity Compensation Plan
Information on page 16 of the Companys Proxy Statement for the Annual Meeting
of Shareholders to be held on April 22, 2004 is incorporated herein by reference.

# Item 13. Certain
Relationships and Related Transactions

In response to this Item, the
information contained on page 18 of the Companys Proxy Statement for the Annual
Meeting of Shareholders to be held on April 22, 2004 is incorporated herein by reference.

# Item 14. Principal
Accounting Fees and Services

In response to this Item, the
information contained on page 8 of the Companys Proxy Statement for the Annual
Meeting of Shareholders to be held on April 22, 2004 is incorporated herein by reference.

15

---

# PART IV

# Item 15. Exhibits,
Financial Statement Schedules and Reports on Form 8-K

(a)    
          The following documents are filed as part of this report:

|3.1 | Articles of  Incorporation  of the Company  (incorporated
 by reference to Exhibit 3.3 of the  Registration  Statement on Form
         10-12G, File No. 000-33021).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.2 | Bylaws of the  Company  (incorporated  by  reference  to
Exhibit  3.4 of the  Registration  Statement  on Form  10-12G,  File
         No.000-33021).
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------

|4.1 | Provisions in the Companys Articles of Incorporation and Bylaws defining the rights
of holders of the Companys Common Stock (incorporated by reference to Exhibit 4.1 to
the Companys Registration Statement on Form 10-12G, File No.000-33021).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.2 | Form of Certificate of Common Stock (incorporated by
reference to Exhibit 4.2 to the
Companys Registration Statement on Form 10-12G, File No.000-33021).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|10.1 | Form of Director Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the
Companys Annual Report on Form 10-K for December 31, 2002, File No.000-33021).
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.2 | Form of Employee Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to the
Companys Annual Report on Form 10-K for December 31, 2002, File No.000-33021).
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.3 | Form of Executive Officer Deferred Compensation Plan (incorporated by reference to Exhibit
10.3 to the Companys Annual Report on Form 10-K for December 31, 2002, File
No.000-33021).
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.4 | Form of Director Deferred Compensation Plan (incorporated by reference to Exhibit 10.4 to
the Companys Annual Report on Form 10-K for December 31, 2002, File No.000-33021).
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|13 | Annual Report to Shareholders for the year ended December 31, 2003.
|-- | -------------------------------------------------------------------

|21.1 | Subsidiaries of the
Company.
|---- | ----------------------------

|24 | Power of Attorney (contained on the signature page hereof).
|-- | -----------------------------------------------------------

|31.1 | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|---- | -------------------------------------------------------------------------------------------------------

|31.2 | Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|---- | -------------------------------------------------------------------------------------------------------

|32 | Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002. This exhibit is not filed for purposes
of Section 18 of the Securities Exchange Act of 1934 but is instead furnished as provided
by applicable rules of the Securities and Exchange Commission.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# (b)    Reports on Form 8-K

The
following reports were filed on Form 8-K during the fourth quarter for the year ended
December 31, 2003:

The
company filed a Form 8-K on October 14, 2003 to announce earnings for the third quarter
ending September 30, 2003.

16

---

# SIGNATURES

In accordance with Section 13 of
15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

# GREER BANCSHARES
INCORPORATED

|By:  /s/ R. Dennis Hennett
R. Dennis HennettPresident and Chief Executive Officer | Date: March 25, 2004
|--------------------------------------------------------------------------------- | --------------------

KNOW ALL MEN BY THESE PRESENTS, that
each person whose signature appears below constitutes and appoints R. Dennis Hennett, his
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all capacities, to
sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto attorney-in-fact and agent full power and authority to
do and perform each and every act and thing requisite or necessary to be done in and about
the premises, as fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that attorney-in-fact and agent, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

In accordance with the Exchange Act,
this report has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

|By:  /s/ Gary M. Griffin
Gary M. Griffin, Director; Chairman | Date: March 25, 2004
|------------------------------------------------------------ | --------------------

|By:  /s/ Anthony C. Cannon
Anthony C. Cannon, Director | Date: March 25, 2004
|------------------------------------------------------ | --------------------

|By:  /s/ David M. Rogers
David M. Rogers, Director | Date: March 25, 2004
|-------------------------------------------------- | --------------------

|By:  /s/ Mark S. Ashmore
Mark S. Ashmore, Director | Date: March 25, 2004
|-------------------------------------------------- | --------------------

|By:  /s/ Walter M. Burch
Walter M. Burch, Director | Date: March 25, 2004
|-------------------------------------------------- | --------------------

|By:  /s/ R. Dennis Hennett
R. Dennis Hennett, President and Chief Executive Officer | Date: March 25, 2004
|----------------------------------------------------------------------------------- | --------------------

|By:  /s/ Harold K. James
Harold K. James, Director | Date: March 25, 2004
|-------------------------------------------------- | --------------------

|By:  Paul D. Lister
Paul D. Lister, Director | 
|-------------------------------------------- | 

|By:  Theron C. Smith,III
Theron C. Smith, III, Director | 
|------------------------------------------------------- | 

|By:  /s/ C. Don Wall
C. Don Wall, Director | Date: March 25, 2004
|------------------------------------------ | --------------------

|By:  /s/ J. Richard Medlock, Jr.
J. Richard Medlock, Jr., Chief Financial Officer (principal financial officer) | Date: March 25, 2004
|--------------------------------------------------------------------------------------------------------------- | --------------------

17

---

# Exhibit List:

|3.1 | Articles of  Incorporation  of the Company  (incorporated  by
 reference to Exhibit 3.3 of the  Registration  Statement on Form
10-12G, File No. 000-33021).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.2 | Bylaws of the  Company  (incorporated  by  reference
 to  Exhibit  3.4 of the  Registration  Statement  on Form  10-12G,  File
 No.000-33021).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------

|4.1 | Provisions in the Companys Articles of Incorporation and
Bylaws defining the rights of holders of the Companys Common Stock (incorporated by reference to Exhibit 4.1 to
the Companys Registration Statement on Form 10-12G, File No.000-33021).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.2 | Form of Certificate of
Common Stock (incorporated by reference to Exhibit 4.2 to the
Companys Registration Statement on Form 10-12G, File No.000-33021).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|10.5 | Form of Director Stock Incentive Plan
(incorporated by reference to Exhibit 10.1 to the Companys Annual Report on Form 10-K for
December 31, 2002, File No.000-33021).
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.6 | Form of Employee Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to the
Companys Annual Report on Form 10-K for December 31, 2002, File No.000-33021).
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.7 | Form of Executive Officer Deferred Compensation Plan (incorporated by reference to Exhibit
10.3 to the Companys Annual Report on Form 10-K for December 31, 2002, File
No.000-33021).
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.8 | Form of Director Deferred Compensation Plan (incorporated by reference to Exhibit 10.4 to
the Companys Annual Report on Form 10-K for December 31, 2002, File No.000-33021).
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|13 | Annual Report to Shareholders for the year
ended December 31, 2003.
|-- | -------------------------------------------------------------------

|21.1 | Subsidiaries of the
Company.
|---- | ----------------------------

|24 | Power of Attorney (contained on the signature page hereof).
|-- | -----------------------------------------------------------

|31.1 | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|---- | -------------------------------------------------------------------------------------------------------

|31.2 | Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|---- | -------------------------------------------------------------------------------------------------------

|32 | Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002. This exhibit is not filed for purposes
of Section 18 of the Securities Exchange Act of 1934 but is instead furnished as provided
by applicable rules of the Securities and Exchange Commission.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

18