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Securities and Exchange Commission
Washington, D.C. 20549

FORM 10-KSB

|                                            |  |                                                                                   
|------------------------------------------- |  | ----------------------------------------------------------------------------------
|x                                           |  | ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934    
|For the fiscal year ended December 31, 2002
|                                            |  |                                                                                   
|o                                           |  | TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to

COMMISSION FILE NUMBER 0-33221

NEWNAN COWETA BANCSHARES, INC.

(Name of Small Business Issuer in Its Charter)


|                         |  |                                     
|------------------------ |  | ------------------------------------
|Georgia                  |  | 58-2655471                          
|                         |  |                                     
|(State of Incorporation) |  | (I.R.S. Employer Identification No.)

145 MILLARD FARMER INDUSTRIAL BLVD.
NEWNAN, GEORGIA 30263
(Address of principal executive offices)(Zip Code)

(770) 683-6222
(Issuers telephone number)

Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
(Title of Class)

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

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure 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-KSB or any amendment to
this Form 10-KSB.   x

Revenues for the Registrants fiscal year ended December 31, 2002 total
$4,910,595.

The aggregate market value of the Registrants outstanding Common Stock held by
nonaffiliates of the Registrant on March 15, 2003 was approximately $6,356,280.
There were 900,000 shares of Common Stock outstanding as of March 15, 2003.

Transitional Small Business Disclosure Format (check one):
   
Yes   o   
No   x

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrants definitive Proxy Statement for the 2003
Annual Meeting of Shareholders are incorporated by reference into Part III of
this Report.





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TABLE OF CONTENTS



|                                             |                                                                                                                         |  |  |  |  |  |  | 
|-------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                                      
|                                             | ITEM 1. DESCRIPTION OF BUSINESS                                                                                        
|                                             | ITEM 2. DESCRIPTION OF PROPERTY                                                                                        
|                                             | ITEM 3. LEGAL PROCEEDINGS                                                                                              
|                                             | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                            
|PART II                                     
|                                             | ITEM 5. MARKET FOR THE COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                                                   
|                                             | ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION                                                      
|                                             | ITEM 7. FINANCIAL STATEMENTS                                                                                           
|                                             | ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                           
|PART III                                    
|                                             | ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
|                                             | ITEM 10. EXECUTIVE COMPENSATION                                                                                        
|                                             | ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                                                
|                                             | ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                                
|                                             | ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K                                                                        
|                                             | ITEM 14. CONTROLS AND PROCEDURES                                                                                       
|SIGNATURES                                  
|EX-21 SUBSIDIARIES OF THE REGISTRANT        
|EX-23 CONSENT OF MAULDIN & JENKINS, LLC     
|EX-99.1 SECTION 906 CERTIFICATION OF THE CEO
|EX-99.2 SECTION 906 CERTIFICATION OF THE CFO



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NEWNAN COWETA BANCSHARES, INC.
Annual Report on Form 10-KSB
For the Fiscal Year Ended December 31, 2002

Table of Contents

|         |  |                                                                                                                 |        |    |  | 
|-------- |  | --------------------------------------------------------------------------------------------------------------- | ------ | -- |  | 
|Item     |  |                                                                                                                 | Page  
|Number   |  |                                                                                                                 | Number
|         |  |                                                                                                                 |       
|Part I  
|1.       |  | Description of Business                                                                                         |        | 2  | 
|2.       |  | Description of Property                                                                                         |        | 13 | 
|3.       |  | Legal Proceedings                                                                                               |        | 13 | 
|4.       |  | Submission of Matters to a Vote of Security Holders                                                             |        | 13 | 
|Part II 
|5.       |  | Market for Common Equity and Related Stockholder Matters                                                        |        | 13 | 
|6.       |  | Managements Discussion and Analysis or Plan of Operation                                                       |        | 14 | 
|7.       |  | Financial Statements                                                                                            |        | 30 | 
|8.       |  | Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure                            |        | 30 | 
|Part III
|9.       |  | Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act |        | 30 | 
|10.      |  | Executive Compensation                                                                                          |        | 30 | 
|11.      |  | Security Ownership of Certain Beneficial Owners and
Management                                                  |        | 30 | 
|12.      |  | Certain Relationships and Related Transactions                                                                  |        | 30 | 
|13.      |  | Exhibits and Reports on Form 8-K                                                                                |        | 31 | 
|         |  | Signatures                                                                                                      |        | 33 |  | 
|         |  | Index of Exhibits                                                                                               |        |    | 

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PART I




ITEM 1. DESCRIPTION OF BUSINESS

Overview

The Company

Newnan Coweta Bancshares, Inc. (the Company) was incorporated
under the laws of the State of Georgia and is a bank holding company
registered under the Bank Holding Company Act of 1956, as amended. Its
wholly-owned subsidiary, Newnan Coweta Bank, a Georgia banking
corporation (the Bank), was incorporated on December 21, 1999 and
commenced business on April 20, 2000. The Bank reorganized into a
holding company structure effective October 1, 2001.

The primary activity of the Company currently is, and is expected to
remain for the foreseeable future, the ownership and operation of the
Bank. As a bank holding company, the Company is intended to facilitate
the Banks ability to serve its customers requirements for financial
services. The holding company structure also provides flexibility for
expansion through the possible acquisition of other financial
institutions and the provision of additional banking-related services, as
well as certain non-banking services, which a traditional commercial bank
may not provide under present laws. The holding company structure also
affords additional flexibility in terms of capital formation and
financing opportunities.

While the Company may seek in the future to acquire additional banks
or bank holding companies or to engage in other activities appropriate
for bank holding companies under appropriate circumstances as permitted
by law, the Company currently has no plans, understandings or agreements
concerning any other activities other than as described below. The
results of operations and financial condition of the Company for the
foreseeable future, therefore, will be determined primarily by the
results of operations and financial condition of the Bank.

The Bank

The Banks business consists primarily of attracting deposits from
the general public and, with these and other funds, originating real
estate loans, consumer loans, business loans, and residential and
commercial construction loans. Funds not invested in the loan portfolio
are invested by the Bank primarily in obligations of the U.S. Government,
various states and their political subdivisions. In addition to
deposits, sources of funds for the Banks loans and other investments
include amortization and prepayment of loans, sales of loans or
participations in loans, and sales of its investment securities. The
principal sources of income for the Bank are interest and fees collected
on loans, fees collected on deposit accounts and interest and dividends
collected on other investments. The principal expenses of the Bank are
interest paid on deposits, employee compensation and benefits, office
expenses and other overhead expenses.

Employees

As of February 1, 2003, the Company and the Bank had 19 full-time
equivalent employees of whom 18 are full-time and 3 are part-time. The
employees are not represented by a collective bargaining unit. The
Company and the Bank believe their relationships with their employees to
be good.

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Customers

It is the opinion of management that there is no single customer or
affiliated group of customers whose deposits, if withdrawn, would have a
material adverse effect on the business of the Company.

Competition

All phases of the Companys banking activities are highly
competitive. The Company competes actively with nine commercial banks,
as well as finance companies, credit unions, and other financial
institutions located in its service area, which includes Coweta County,
Georgia and its surrounding areas.

Four major regional banks represent approximately 47% of the
deposits in the Coweta County market. The larger financial institutions
have greater resources and lending limits than the Bank, and the four
major regional banking institutions have nine branches in the county.
There are several credit unions located in Coweta County. Since credit
unions are not subject to income taxes in the way commercial banks are
taxed, credit unions have an advantage in offering competitive rates to
potential customers. The Bank also faces competition in certain areas of
its business from mortgage banking companies, consumer finance companies,
insurance companies, money market mutual funds and investment banking
firms, some of which are not subject to the same degree of regulation as
the Bank.

The Bank competes for deposits principally by offering depositors a
variety of deposit programs with competitive interest rates, quality
service and convenient locations and hours. The Bank will focus its
resources to seek out and attract small business relationships and take
advantage of the Banks ability to provide flexible service that meets
the needs of this customer class. Management feels this market niche is
the most promising business area for the future growth of the Bank.

Supervision and Regulation

General

We are subject to state and federal banking laws and regulations that
impose specific requirements or restrictions and provide for general regulatory
oversight over virtually all aspects of our operations. These laws and
regulations generally are intended to protect depositors, not shareholders.
This discussion is only a summary of various statutory and regulatory
provisions. This summary is qualified by reference to the particular statutory
and regulatory provisions. Any change in applicable laws or regulations may
have a material effect on our business and prospects.

Beginning with the enactment of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, numerous additional regulatory
requirements have been placed on the banking industry during the past ten
years. On November 12, 1999, the President signed into law a financial services
modernization act which effectively repealed the anti-affiliation provisions of
the 1933 Glass-Steagall Act and the 1956 Bank Holding Company Act. Legislative
changes and the policies of various regulatory authorities may affect our
operations. We are unable to predict

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the nature or the extent of the effect on our business and earnings that fiscal
or monetary policies, economic control or new federal or state legislation may
have in the future.

The Company

The Company is a bank holding company registered with the Board of
Governors of the Federal Reserve System and the Georgia Department of Banking
and Finance under the Bank Holding Company Act of 1956, as amended, and the
Georgia Bank Holding Company Act. We are subject to the supervision,
examination and reporting requirements of the Bank Holding Company Act and the
regulations of the Federal Reserve, and the Georgia Bank Holding Company Act
and the regulations of the Georgia Department of Banking and Finance.

The Bank Holding Company Act requires every bank holding company to obtain
the prior approval of the Federal Reserve before:



| |  |  | it may acquire direct or indirect ownership or control
of any voting shares of any bank if, after such acquisition, the
bank holding company will directly or indirectly own or control
more than 5% of the voting shares of the bank;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | it or any of its subsidiaries, other than a bank, may
acquire all or substantially all of the assets of any bank; or                                                                                                                  
|
| |  |  | it may merge or consolidate with any other bank holding
company.                                                                                                                                                                      

The Bank Holding Company Act further provides that the Federal Reserve may
not approve any transaction that would result in a monopoly or would be in
furtherance of any combination or conspiracy to monopolize or attempt to
monopolize the business of banking in any part of the United States. In
addition, the Federal Reserve will not approve a transaction the effect of
which may be substantially to lessen competition or to tend to create a
monopoly, or that in any other manner would be in restraint of trade. However,
such transactions may be approved in the event the anti-competitive effects of
the proposed transaction are clearly outweighed by the public interest in
meeting the convenience and needs of the communities to be served. The Federal
Reserve is also required to consider the financial and managerial resources and
future prospects of the bank holding companies and banks involved and the
convenience and needs of the communities to be served. Consideration of
financial resources generally focuses on capital adequacy, and consideration of
convenience and needs issues generally focuses on the parties performance
under the Community Reinvestment Act of 1977.

The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
facilitates interstate branching and permits the establishment of agency
relationships across state lines. The Interstate Banking Act also permits bank
holding companies to acquire banks in any state without regard to whether the
transaction is prohibited under the laws of such state, subject to certain
state provisions, including minimum age requirements of banks that are the
target of the acquisition. The minimum age of local banks subject to interstate
acquisition is five years.

In response to the Interstate Banking Act, the Georgia General Assembly
adopted the Georgia Interstate Banking Act, which provides that:
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| |  |  | interstate acquisitions by institutions located in
Georgia will be permitted in states which also allow interstate
acquisitions; and               
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | interstate acquisitions of institutions located in
Georgia will be permitted by institutions located in states which
allow interstate acquisitions.

Additionally, in 1996, the Georgia General Assembly adopted the Georgia
Interstate Branching Act, which permits Georgia-based banks and bank holding
companies owning banks outside of Georgia and all non-Georgia banks and bank
holding companies owning banks in Georgia the right to merge any bank into an
interstate branch network. The Georgia Interstate Branching Act also allows
banks to establish de novo branches on an unlimited basis throughout Georgia,
subject to the prior approval of the Georgia Department of Banking and Finance.

Except as amended by the Gramm-Leach-Bliley Act of 1999 discussed below,
the Bank Holding Company Act generally prohibits a bank holding company from
engaging in activities other than banking or managing or controlling banks or
other permissible subsidiaries. Bank holding companies are also generally
prohibited from acquiring or retaining direct or indirect control of any
company engaged in any activities other than those activities determined by the
Federal Reserve to be so closely related to banking or managing or controlling
banks as to be a proper incident thereto. Activities determined by the Federal
Reserve to fall within this category include acquiring or servicing loans,
leasing personal property, conducting discount securities brokerage activities,
performing certain data processing services, acting as agent or broker in
selling certain types of credit insurance, and performing certain insurance
underwriting activities. The BHC Act does not place territorial limitations on
permissible non-banking activities of bank holding companies. The Federal
Reserve has the power to order a bank holding company or its subsidiaries to
terminate any non-banking activity when it has reasonable cause to believe that
continuation of such activity constitutes a serious risk to the safety and
soundness of any bank subsidiary of that bank holding company.

The Bank

The Bank is incorporated under the laws of the State of Georgia and is
subject to examination by the Georgia Department of Banking and Finance. The
Georgia Department regulates all areas of the Banks commercial banking
operations, including, without limitation, loans, deposits, reserves, mergers,
reorganizations, issuance of securities, payment of dividends, and the
establishment of branches.

On July 25, 2001 the Bank became a member of the Federal Reserve System.
Consequently, most aspects of the Banks operations are regulated and examined
by both the Georgia Department of Banking and Finance and the Federal Reserve,
including reserves, loans, investments, borrowings, deposits, mergers, issuance
of securities, payments of dividends, establishment of branches, consolidation
or corporate reorganization and maintenance of books and records.

Gramm-Leach-Bliley Act of 1999

On November 12, 1999, President Clinton signed into law the
Gramm-Leach-Bliley Act of 1999, which breaks down many of the barriers to
affiliations among banks and securities

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firms, insurance companies, and other financial service providers. This new law
provides financial organizations with the flexibility to structure new
affiliations through a holding company structure or a financial subsidiary. As
a result, the number and type of entities competing with us in our markets
could increase. It is too early to determine what effect, if any, this new law
will have on us.

The Gramm-Leach-Bliley Act also covers various topics such as insurance,
unitary thrifts, privacy protection provisions for customers of financial
institutions, the Federal Home Loan Bank systems modernization, automatic
teller machine reform, the Community Reinvestment Act and certain changes
related to the securities industry.

The legislation amends the Bank Holding Company Act to clarify that a bank
holding company may hold shares of any company that the Federal Reserve has
determined to be engaged in activities that were sufficiently closely related
to banking. This act also amends the Bank Holding Company Act to establish a
new type of bank holding company  the financial holding company. Financial
holding companies have the authority to engage in financial activities in which
other bank holding companies may not engage. Financial holding companies may
also affiliate with companies that are engaged in financial activities. These
financial activities include activities that are:



| |  |  | financial in nature;                                                                                                                                                 
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | incidental to an activity that is financial in nature; or                                                                                                            
|
| |  |  | complimentary to a financial activity and does not pose
a substantial risk to the safety and soundness of depository
institutions or the financial system in general.

The Federal Reserve and the Secretary of the Treasury may determine which
activities meet these standards. However, the Gramm-Leach-Bliley Act explicitly
lists certain activities as being financial in nature. For example, some of
these activities are:



| |  |  | lending, exchanging, transferring or investing for others;                                                                                                                                                       
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | safeguarding money or securities;                                                                                                                                                                                
|
| |  |  | insuring, guaranteeing, or indemnifying against loss,
harm, damage, illness, disability, or death, or providing and
issuing annuities, and acting as principal, agent, or broker for
these purposes in any state;
|
| |  |  | providing financial, investment or economic advice;                                                                                                                                                              
|
| |  |  | issuing or selling interests in pools of assets that a bank could hold directly;                                                                                                                                 
|
| |  |  | underwriting, dealing in or making markets in securities; and                                                                                                                                                    
|
| |  |  | engaging within the United States in any activity that
a bank holding company could engage in outside of the United
States, if the Federal Reserve has found that                                                

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| |  |  | the activity was usual in connection with banking or other
financial operations internationally.
| |  |  | ------------------------------------------------------------------------------------------------

The Gramm-Leach-Bliley Act also directs the Federal Reserve to adopt a
regulation or order defining certain additional activities as financial in
nature, to the extent that they are consistent with that act. These include:



| |  |  | lending, exchanging, transferring or investing for
others or safeguarding financial assets other than money or
securities;
| | - |  | --------------------------------------------------------------------------------------------------------------------------
|
| |  |  | providing any device or other instrumentality for
transferring financial assets; and                                      
|
| |  |  | arranging, effecting or facilitating financial
transactions for third parties.                                            

Not all bank holding companies may become financial holding companies. A
bank holding company must meet three requirements before becoming a financial
holding company:



| |  |  | all of the bank holding companys depository
institution subsidiaries must be well capitalized;                                                                                                                                     
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | all of the bank holding companys depository
institution subsidiaries must be well managed; and                                                                                                                                     
|
| |  |  | the bank holding company must file with the Federal
Reserve a declaration of its election to become a financial
holding company, including a certification that its depository
institution subsidiaries meet the prior two criteria.

With only a few exceptions, in order to exercise the powers granted to
them under the Gramm-Leach-Bliley Act, a financial holding company or insured
depository institution also must meet the Community Reinvestment Acts
requirements. If any insured depository institution did not receive a Community
Reinvestment Act rating of at least satisfactory at its most recent
examination, the regulatory agencies are to prevent the insured depository
institution or financial holding company from exercising the new powers, either
directly or through a subsidiary.

Payment of Dividends

The Company is a legal entity separate and distinct from our banking
subsidiary. Our principal source of cash flow, including cash flow to pay
dividends to our shareholders, is dividends from the Bank. There are statutory
and regulatory limitations on the payment of dividends by the Bank, as well as
by us to our shareholders.

If, in the opinion of the federal banking regulators, a depository
institution under its jurisdiction is engaged in or is about to engage in an
unsafe or unsound practice (which, depending on the financial condition of the
depository institution, could include the payment of dividends), such authority
may require, after notice and hearing, that such institution cease and desist
from such practice. The federal banking agencies have indicated that paying
dividends that deplete a depository institutions capital base to an inadequate
level would be an unsafe and

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unsound banking practice. Under the Federal Deposit Insurance Corporation
Improvement Act of 1991 (FDICIA), a depository institution may not pay any
dividend if payment would cause it to become undercapitalized or if it already
is undercapitalized. See Prompt Corrective Action. Moreover, the federal
agencies have issued policy statements that provide that bank holding companies
and insured banks should generally only pay dividends out of current operating
earnings.

In addition, the Georgia Financial Institutions Code and the regulations
of the Georgia Department of Banking and Finance provide:



| |  |  | that dividends of cash or property may be paid only out
of the retained earnings of the Bank;                                                                                                                                  
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | that dividends may not be paid if the Banks paid-in
capital and retained earnings which are set aside for dividend
payment and other distributions do not, in combination, equal at
least 20% of the Banks capital stock; and
|
| |  |  | that dividends may not be paid without prior approval
of the Georgia Department of Banking and Finance if:                                                                                                                     
|

| |  |  | the Banks total classified assets exceed 80% of its equity
capital;                                                                                                                                                            
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | the aggregate amount of dividends to be
declared exceeds 50% of the Banks net profits after taxes
but before dividends for the previous calendar year; or the
ratio of equity capital to total adjusted assets is less
than 6%.

Applying these dividend restrictions, and without prior approval of the
Georgia Department of Banking and Finance, as of December 31, 2002, the Bank
could pay $197,000 in dividends to us. Our ability to pay dividends may also be
affected or limited by other factors, such as the requirement to maintain
adequate capital above regulatory guidelines.

Capital adequacy

We are required to comply with the capital adequacy standards established
by the Federal Reserve. There are two basic measures of capital adequacy for
bank holding companies that have been promulgated by the Federal Reserve: a
risk-based measure and a leverage measure. All applicable capital standards
must be satisfied for a bank holding company to be considered in compliance.

The risk-based capital standards are designed to make regulatory capital
requirements more sensitive to differences in risk profiles among banks and
bank holding companies, to account for off-balance sheet exposure, and to
minimize disincentives for holding liquid, low-risk assets. Assets and
off-balance-sheet items are assigned to broad risk categories, each with
appropriate weights. The resulting capital ratios represent capital as a
percentage of total risk-weighted assets and off-balance sheet items.

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The minimum guideline for the ratio of total capital to risk-weighted
assets is 8.0%. At least half of total capital must be comprised of Tier 1
Capital, which is common stock, undivided profits, minority interests in the
equity accounts of consolidated subsidiaries and non-cumulative perpetual
preferred stock, less goodwill and certain other intangible assets. The
remainder may consist of Tier 2 Capital, which is subordinated debt, other
preferred stock and a limited amount of loan loss reserves. As of December 31,
2002, the Companys total risk-based capital ratio and its Tier 1 risk-based
capital ratio were 14.35% and 13.13%, respectively.

In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio of Tier 1 Capital to average assets, less goodwill and certain other
intangible assets, of 3.0% for bank holding companies that meet specified
criteria. All other bank holding companies generally are required to maintain a
leverage ratio of at least 3%, plus an additional cushion of 100 to 200 basis
points. The Banks leverage ratio as of December 31, 2002 was 10.55%. The
guidelines also provide that bank holding companies experiencing internal
growth or making acquisitions will be expected to maintain strong capital
positions substantially above the minimum supervisory levels without
significant reliance on intangible assets. Furthermore, the Federal Reserve has
indicated that it will consider a tangible Tier 1 Capital leverage ratio and
other indicia of capital strength in evaluating proposals for expansion or new
activities. The Federal Reserve has not advised the Company of any specific
minimum leverage ratio or tangible Tier 1 leverage ratio applicable to it.

The Bank also is subject to risk-based and leverage capital requirements
adopted by the Federal Reserve, which are substantially similar to those
adopted by the Federal Reserve for bank holding companies. The Bank was in
compliance with applicable minimum capital requirements as of December 31,
2002. We have not been advised by any federal banking agency of any specific
capital ratio requirement applicable to the Bank.

Failure to meet capital guidelines could subject a bank to a variety of
enforcement remedies, including issuance of a capital directive, the
termination of deposit insurance by the Federal Deposit Insurance Corporation,
a prohibition on the taking of brokered deposits, and certain other
restrictions on its business. As described below, substantial additional
restrictions can be imposed upon FDIC-insured depository institutions that fail
to meet applicable capital requirements. See Prompt Corrective Action.

The federal bank regulators continue to indicate their desire to raise
capital requirements applicable to banking organizations beyond their current
levels. In this regard, the Federal Reserve and the Federal Deposit Insurance
Corporation have recently adopted regulations requiring regulators to consider
interest rate risk in the evaluation of a banks capital adequacy. The bank
regulatory agencies have recently established a methodology for evaluating
interest rate risk which sets forth guidelines for banks with excessive
interest rate risk exposure to hold additional amounts of capital against such
exposures.

In addition to the capital standards imposed by federal banking
regulators, the Georgia Department of Banking and Finance imposed a requirement
for the Bank to maintain a leverage ratio of not less than 8.0% during the
first three years of the Banks operation. Following the expiration of this
initial period, the Bank will become subject to a 6.0% primary capital ratio.

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Such standard is calculated as the ratio of total equity to total assets, each
as adjusted for unrealized gains and losses on securities and allowance for
loan losses.

Support of Subsidiary Institution

Under Federal Reserve policy, the Company is expected to act as a source
of financial strength for, and to commit resources to support, the Bank. This
support may be required at times when, absent such Federal Reserve policy, we
may not be inclined to provide such support. In addition, any capital loans by
a bank holding company to its banking subsidiary are subordinate in right of
payment to deposits and to certain other indebtedness of such bank. In the
event of a bank holding companys bankruptcy, any commitment by a bank holding
company to a federal bank regulatory agency to maintain the capital of a
banking subsidiary will be assumed by the bankruptcy trustee and entitled to a
priority of payment.

Prompt Corrective Action

The Federal Deposit Insurance Corporation Improvement Act of 1991 was
enacted in large measure to improve the supervision and examination of insured
depository institutions in an effort to reduce the number of bank failures and
the resulting demands on the deposit insurance system. This law establishes a
system of prompt corrective action to resolve the problems of undercapitalized
institutions. Under this system, the federal banking regulators have
established five capital categories (well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized) and are required to take certain mandatory supervisory
actions, and are authorized to take other discretionary actions, with respect
to institutions in the three undercapitalized categories. The severity of such
actions depends upon the capital category in which the institution is placed.
Generally, subject to a narrow exception, the banking regulator is required to
appoint a receiver or conservator for an institution that is critically
undercapitalized. The federal banking agencies have specified by regulation the
relevant capital level for each category.

Under the regulations, an FDIC-insured bank will be:



| |  |  | well capitalized if it has a total capital ratio of 10.0%
or greater, a tier 1 capital ratio of 6.0% or greater and a leverage
ratio of 5.0% or greater and is not subject to any order or written
directive by the appropriate regulatory authority to meet and
maintain a specific capital level for any capital measure;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | adequately capitalized if it has a total capital ratio of
8.0% or greater, a tier 1 capital ratio of 4.0% or greater and a
leverage ratio of 4.0% or greater (3.0% in certain circumstances)
and is not well capitalized;                                                                                                
|
| |  |  | undercapitalized if it has a total capital ratio of less
than 8.0%, a tier 1 capital ratio of less than 4.0% or a leverage
ratio of less than 4.0% (3.0% in certain circumstances);                                                                                                                                        
|
| |  |  | significantly undercapitalized if it has a total capital
ratio of less than 6.0%, a tier 1 capital ratio of less than 3.0% or
a leverage ratio of less than 3.0%; and                                                                                                                                                      

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| |  |  | critically undercapitalized if its tangible equity is equal
to or less than 2.0% of average quarterly tangible assets.
| | - |  | ------------------------------------------------------------------------------------------------------------------------

A depository institution may be deemed to be in a capitalization category
that is lower than is indicated by its actual capital position if it receives
an unsatisfactory examination rating in any one of four categories. As a
depository institution moves downward through the capitalization categories,
the degree of regulatory scrutiny will increase and the permitted activities of
the institution will decrease.

An FDIC-insured bank is generally prohibited from making any capital
distribution, including dividend payments, or paying any management fee to its
holding company if the bank would thereafter be undercapitalized.
Undercapitalized banks are subject to growth limitations and are required to
submit a capital restoration plan. The federal regulators may not accept a
capital plan without determining, among other things, that the plan is based on
realistic assumptions and is likely to succeed in restoring the banks capital.
In addition, for a capital restoration plan to be acceptable, the banks parent
holding company must guarantee that the institution will comply with such
capital restoration plan. The aggregate liability of the parent company is
limited to the lesser of an amount equal to 5.0% of the banks total assets at
the time it became undercapitalized and the amount necessary to bring the
institution into compliance with all applicable capital standards. If a bank
fails to submit an acceptable plan, it is treated as if it is significantly
undercapitalized. Significantly undercapitalized institutions may be subject
to a number of requirements and restrictions, including orders to sell
sufficient voting stock to become adequately capitalized, requirements to
reduce total assets, and cessation of receipt of deposits from correspondent
banks. Critically undercapitalized institutions are subject to the
appointment of a receiver or conservator. A bank that is not well capitalized
is subject to certain limitations relating to so-called brokered deposits.

As of December 31, 2002, the Bank had the requisite capital levels to
qualify as well capitalized.

FDIC Insurance Assessments

The Federal Deposit Insurance Corporation has adopted a risk-based
assessment system for insured depository institutions that takes into account
the risks attributable to different categories and concentrations of assets and
liabilities. The risk-based assessment system assigns an institution to one of
three capital categories: well capitalized, adequately capitalized and
undercapitalized. These three categories are substantially similar to the
prompt corrective action categories described above, with the
undercapitalized category including institutions that are undercapitalized,
significantly undercapitalized and critically undercapitalized for prompt
corrective action purposes. The FDIC also assigns an institution to one of
three supervisory subgroups within each capital group. The supervisory subgroup
to which an institution is assigned is based on an evaluation provided to the
FDIC by the institutions primary federal regulator and information which the
FDIC determines to be relevant to the risk posed to the deposit insurance
funds. An institutions insurance assessment rate is then determined based on
the capital category and supervisory category to which it is assigned. The
combination of capital groups and supervisory subgroups results in nine
assessment risk classifications to which different assessment rates are
applied.

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The FDIC may terminate the insurance of the deposits of the Bank upon a
finding that the Bank has engaged in unsafe and unsound practices, is in an
unsafe or unsound condition to continue operations or has violated any
applicable law, regulation, order or condition the FDIC has imposed.

Safety and Soundness Standards

The federal bank regulatory agencies have adopted a set of guidelines
prescribing safety and soundness standards. The guidelines establish general
standards relating to internal controls and information systems, internal audit
systems, loan documentation, credit underwriting, interest rate exposure, asset
growth, asset quality, earnings and compensation, fees and benefits. In
general, the guidelines require, among other things, appropriate systems and
practices to identify and manage the risks and exposures specified in the
guidelines. The guidelines prohibit excessive compensation as an unsafe and
unsound practice and describe compensation as excessive when the amounts paid
are unreasonable or disproportionate to the services performed by an executive
officer, employee, director, or principal shareholder. In addition, the
agencies adopted regulations that authorize, but do not require, an agency to
order an institution that has been given notice by an agency that it is not
satisfying any of such safety and soundness standards to submit a compliance
plan. If an institution fails to submit or implement such a plan, the agency
must issue an order directing action to correct the deficiency and may require
other actions of the types to which an undercapitalized institution is subject
under the prompt corrective action provisions described above. If an
institution fails to comply with such an order, the agency may seek to enforce
such order in judicial proceedings and to impose civil money penalties.

Community Reinvestment Act

The Community Reinvestment Act requires federal bank regulatory agencies
to encourage financial institutions to meet the credit needs of low- and
moderate-income borrowers in their local communities. An institutions size and
business strategy determines the type of examination that it will receive.
Large, retail-oriented institutions will be examined using a performance-based
lending, investment and service test. Small institutions will be examined using
a streamlined approach. All institutions may opt to be evaluated under a
strategic plan formulated with community input and pre-approved by the bank
regulatory agency.

Community Reinvestment Act regulations provide for certain disclosure
obligations. Each institution must post a notice advising the public of its
right to comment to the institution and its regulator on the institutions
Community Reinvestment Act performance and to review the institutions
Community Reinvestment Act public file. Each lending institution must maintain
for public inspection a public file that includes a listing of branch locations
and services, a summary of lending activity, a map of its communities and any
written comments from the public on its performance in meeting community credit
needs. The Community Reinvestment Act requires public disclosure of a financial
institutions written Community Reinvestment Act evaluations. This promotes
enforcement of Community Reinvestment Act requirements by providing the public
with the status of a particular institutions community reinvestment record.

The recently enacted Gramm-Leach-Bliley Act makes various changes to the
CRA. Among other changes, CRA agreements with private parties must be disclosed
and annual CRA

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reports must be made to a banks primary federal regulator. A bank holding
company will not be permitted to become a financial holding company and no new
activities authorized under this Act may be commenced by a holding company if
any of its bank subsidiaries received less than a satisfactory CRA rating in
its latest CRA examination.




ITEM 2. DESCRIPTION OF PROPERTY

As of December 31, 2002, the principal offices of the Company and
the Bank were located at 145 Millard Farmer Industrial Blvd., Newnan,
Georgia 30263. This property is owned by the Bank. Neither the Company
nor the Bank has any other properties.




ITEM 3. LEGAL PROCEEDINGS

The Bank may, periodically, be involved as a plaintiff or defendant
in various legal actions in the ordinary course of its business.
Management believes that those claims against the bank are without merit
or that the ultimate liability, if any, resulting from them will not
materially affect the Banks financial condition.




ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of shareholders of the Company
during the fourth quarter of the Companys fiscal year ended December 31,
2002.




PART II




ITEM 5. MARKET FOR THE COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

There is no public market for the Companys shares which have been traded
inactively in private transactions. Therefore, no reliable information is
available as to trades of common stock or as to the prices at which common
stock has traded. Management has reviewed the limited information available
as to the ranges at which the Companys common stock has been sold. The
following table sets forth the estimated price range for sales of common stock
for each quarter of the last two years. The following data regarding the
Companys common stock is provided for information purposes only and should
not be viewed as indicative of the actual or market value of the common stock:

|               |  |                       |       |     |  |   |       | 
|-------------- |  | --------------------- | ----- | --- |  | - | ----- | 
|               |  | Estimated Price Range
|               |  | Per Share            
|               |  |                      
|               |  | High                  |       | Low
|               |  |                       |       |    
|2002:          |  |                       |       |     |  |   |       | 
|First Quarter  |  | $                     | 12.00 |     |  | $ | 12.00 | 
|Second Quarter |  | $                     | 12.00 |     |  | $ | 12.00 | 
|Third Quarter  |  | $                     | 12.50 |     |  | $ | 10.50 | 
|Fourth Quarter |  | $                     | 12.00 |     |  | $ | 11.50 | 
|2001:          |  |                       |       |     |  |   |       | 
|First Quarter  |  | $                     | 11.50 |     |  | $ | 11.00 | 
|Second Quarter |  | $                     | 12.50 |     |  | $ | 9.00  | 
|Third Quarter  |  | $                     | 11.00 |     |  | $ | 10.00 | 
|Fourth Quarter |  | $                     | 12.00 |     |  | $ | 12.00 | 

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There were approximately 680 holders of record of the common stock
as of December 31, 2002.

The Company currently intends to retain its earnings for use in the
business and does not foresee paying cash dividends in the near future.
The Board of Directors cannot predict when such dividends, if any will
ever be made. The payment of dividends, if any, shall at all times be
subject to the payment of the Companys expenses, the maintenance of
reasonable working capital and risk reserves, and minimum capitalization
requirements for state banks.

The following table sets forth information relating to the Companys
equity compensation plans as of December 31, 2002:

EQUITY COMPENSATION PLAN INFORMATION

|                                                           |       |  |                              |        |                               |   |                          |       |                       |  |                                |         | 
|---------------------------------------------------------- | ----- |  | ---------------------------- | ------ | ----------------------------- | - | ------------------------ | ----- | --------------------- |  | ------------------------------ | ------- | 
|                                                           |       |  |                              |        |                               |   |                          |       |                       |  | Number of securities remaining
|                                                           |       |  |                              |        |                               |   |                          |       | available for future 
|                                                           |       |  | Number of securities         |        |                               |   |                          |       | issuance under equity
|                                                           |       |  | to be issued upon            |        | Weighted-average              |   | compensation plans      
|                                                           |       |  | exercise of outstanding      |        | exercise price of outstanding |   | (excluding securities   
|                                                           |       |  | options, warrants and rights |        | options, warrants and rights  |   | reflected in column (a))
|                                                           |       |  | (a)                          |        | (b)                           |   | (c)                     
|                                                           |       |  |                              |        |                               |   |                         
|Equity compensation plans approved by
security holders     |       |  | 45,000                       |        |                               | $ | 10.00                    |       |                       |  | 105,000                        |        
|Equity compensation plans not approved by
security holders |       |  | 40,000                       |        |                               | $ | 10.00                    |       |                       |  | -0-                            |        
|                                                           | Total |  |                              | 85,000 |                               |   | $                        | 10.00 |                       |  |                                | 105,000 | 




ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION

The following is a discussion of our financial condition and the financial
condition of our bank subsidiary, Newnan Coweta Bank, at December 31, 2002 and
2001 and the results of operations for the years then ended. The purpose of

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this discussion is to focus on information about our financial condition and
results of operations that are not otherwise apparent from our audited
financial statements.

Reference should be made to those statements and the selected financial data
presented elsewhere in this report for an understanding of the following
discussion and analysis.

FORWARD-LOOKING STATEMENTS

We may from time to time make written or oral forward-looking statements,
including statements contained in our filings with the Securities and Exchange
Commission and reports to stockholders. Statements made in the Annual Report,
other than those concerning historical information, should be considered
forward-looking and subject to various risks and uncertainties. Such
forward-looking statements are made based upon managements belief as well as
assumptions made by, and information currently available to, management
pursuant to safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Our actual results may differ materially from the results
anticipated in 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, interest rate risk
management, the effects of competition in the banking business from other
commercial banks, thrifts, mortgage banking firms, consumer finance companies,
credit unions, securities brokerage firms, insurance companies, money market
funds and other financial institutions operating in our market area and
elsewhere, including institutions operating through the Internet, changes in
governmental regulation relating to the banking industry, including regulations
relating to branching and acquisitions, failure of assumptions underlying the
establishment of reserves for loan losses, including the value of collateral
underlying delinquent loans and other factors. We caution that such factors are
not exclusive. We do not undertake to update any forward-looking statement that
may be made from time to time by us, or on our behalf.

CRITICAL ACCOUNTING POLICIES

We have adopted various accounting policies which govern the application of
accounting principles generally accepted in the United States of America in the
preparation of our financial statements. Our significant accounting policies
are described in the footnotes to the consolidated financial statements at
December 31, 2002 which are made a part of this annual report on Form 10-KSB.

Certain accounting policies involve significant judgments and assumptions by us
which have a material impact on the carrying value of certain assets and
liabilities. We consider these accounting policies to be critical accounting
policies. The judgments and assumptions we use are based on historical
experience and other factors, which we believe to be reasonable under the
circumstances. Because of the nature of the judgments and assumptions we make,
actual results could differ from these judgments and estimates which could have
a material impact on our carrying values of assets and liabilities and our
results of operations.

We believe the allowance for loan losses is a critical accounting policy that
requires the most significant judgments and estimates used in the preparation
of our consolidated financial statements. Refer to the portion of this
discussion that addresses our allowance for loan losses for a description of
our processes and methodology for determining our allowance for loan losses.

OVERVIEW

The year 2002 was highlighted by significant loan and deposit growth. Our
primary market area of Coweta County, Georgia continues to grow, and we are
strategically positioned to take advantage of the growth. The areas growth
should provide a base for continued profitability.

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FINANCIAL CONDITION AT DECEMBER 31, 2002 AND 2001

The following is a summary of our balance sheets for the periods indicated:

|                                   |  |                        |        |      |  |   |        | 
|---------------------------------- |  | ---------------------- | ------ | ---- |  | - | ------ | 
|                                   |  | December 31,          
|                                   |  |                       
|                                   |  | 2002                   |        | 2001
|                                   |  |                        |        |     
|                                   |  | (Dollars in Thousands)
|Cash and due from banks            |  | $                      | 1,964  |      |  | $ | 3,054  | 
|Interest-bearing deposits in banks |  |                        | 1,090  |      |  |   |       | 
|Federal funds sold                 |  |                        |       |      |  |   | 2,079  | 
|Securities                         |  |                        | 9,562  |      |  |   | 5,828  | 
|Loans, net                         |  |                        | 69,731 |      |  |   | 46,717 | 
|Premises and equipment             |  |                        | 2,672  |      |  |   | 2,630  | 
|Other assets                       |  |                        | 913    |      |  |   | 662    | 
|                                   |  |                        |        |      |  |   |        | 
|                                   |  | $                      | 85,932 |      |  | $ | 60,970 | 
|                                   |  |                        |        |      |  |   |        | 
|Total deposits                     |  | $                      | 75,477 |      |  | $ | 51,793 | 
|Federal funds purchased            |  |                        | 397    |      |  |   |       | 
|Other borrowings                   |  |                        |       |      |  |   | 35     | 
|Other liabilities                  |  |                        | 758    |      |  |   | 505    | 
|Stockholders equity               |  |                        | 9,300  |      |  |   | 8,637  | 
|                                   |  |                        |        |      |  |   |        | 
|                                   |  | $                      | 85,932 |      |  | $ | 60,970 | 
|                                   |  |                        |        |      |  |   |        | 

As of December 31, 2002, we had total assets of $85.9 million, an increase of
41% over December 31, 2001. Total interest-earning assets were $80.4 million
at December 31, 2002 or 94% of total assets as compared to 89.6% of total
assets at December 31, 2001. Our primary interest-earning assets at December
31, 2002 were loans, which made up 87% of total interest-earning assets as
compared to 86% at December 31, 2001. Our loan to deposit ratio was 93% at
December 31, 2002 as compared to 90% at December 31, 2001. Deposit growth of
$23.7 million, has been used primarily to fund loan growth of $23.3 million.
The decrease in federal funds sold of $2.08 million funded and a decrease in
cash and due from banks of $1.09 million was invested in interest-bearing
deposits in banks and securities.

Our securities portfolio, consisting of U.S. Agency securities and
mortgage-backed securities, totaled $9.6 million at December 31, 2002 compared
to $5.8 million at December 31, 2001. Unrealized gains on securities
available-for-sale increased to $180,000 at December 31, 2002 from $144,000 at
December 31, 2001.

We have 83% of our loan portfolio collateralized primarily by real estate
located in our primary market area of Coweta County and surrounding counties. A
breakdown of our real estate loan portfolio is as follows: Our construction and
land development loans, which comprise 25% of the real estate loan portfolio,
consists of loans primarily collateralized by one to four family residential
properties. Real estate loans secured by one to four family residential
properties comprise 7% of the real estate loan portfolio, and nonresidential
real estate loans consisting primarily of small business commercial properties
total 51% of the real estate loan portfolio. We generally require that loans
collateralized by real estate not exceed 80% of the collateral value.

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The remaining 17% of the loan portfolio consists of commercial, consumer, and
other loans. We require collateral commensurate with the repayment ability and
creditworthiness of the borrower.

The specific economic and credit risks associated with our loan portfolio,
especially the real estate portfolio, include, but are not limited to, a
general downturn in the economy which could affect unemployment rates in our
market area, general real estate market deterioration, interest rate
fluctuations, deteriorated or non-existing collateral, title defects,
inaccurate appraisals, financial deterioration of borrowers, fraud, and any
violation of banking protection laws. Construction lending can also present
other specific risks to the lender such as whether developers can find builders
to buy lots for home construction, whether the builders can obtain financing
for the construction, whether the builders can sell the home to a buyer, and
whether the buyer can obtain permanent financing. Currently, real estate values
and employment trends in our market area are stable with only slight
indications of a downturn in the local economy.

We attempt to reduce these economic and credit risks not only by adhering to
loan to value guidelines, but also by investigating the creditworthiness of the
borrower and monitoring the borrowers financial position. Also, we establish
and periodically review our lending policies and procedures. State banking
regulations limit exposure by prohibiting secured loan relationships that
exceed 25% of the Banks statutory capital and unsecured loan relationships
that exceed 15% of the Banks statutory capital.

LIQUIDITY AND CAPITAL RESOURCES

The purpose of liquidity management is to ensure that there are sufficient cash
flows to satisfy demands for credit, deposit withdrawals, and our other needs.
Traditional sources of liquidity include asset maturities and growth in core
deposits. A company may achieve its desired liquidity objectives from the
management of assets and liabilities and through funds provided by operations.
Funds invested in short-term marketable instruments and the continuous maturing
of other earning assets are sources of liquidity from the asset perspective.
The liability base provides sources of liquidity through deposit growth, the
maturity structure of liabilities, and accessibility to market sources of
funds.

Scheduled loan payments are a relatively stable source of funds, but loan
payoffs and deposit flows fluctuate significantly, being influenced by interest
rates and general economic conditions and competition. We attempt to price
deposits to meet asset/liability objectives consistent with local market
conditions.

Our liquidity and capital resources are monitored on a periodic basis by
management, State and Federal regulatory authorities. As determined under
guidelines established by regulatory authorities and internal policy, our
liquidity was considered satisfactory.

At December 31, 2002, we had loan commitments outstanding of $8.9 million.
Because these commitments generally have fixed expiration dates and many will
expire without being drawn upon, the total commitment amounts do not
necessarily represent future cash requirements. If needed, we have the ability
on a short-term basis to borrow and purchase federal funds from other financial
institutions. At December 31, 2002, we had arrangements with two commercial
banks for additional short-term advances of $4,400,000.

In addition, at December 31, 2002, we had $323,000 in commitments for capital
expenditures.

At December 31, 2002, our capital ratios were considered adequate based on
regulatory minimum capital requirements. Stockholders equity increased due to
net income in 2002 of $695,000 which was offset by a decrease in accumulated
other comprehensive income in the amount of $32,000, net of the related tax
effect. Other comprehensive income consists of unrealized gains and losses on
securities available for sale. For regulatory purposes, the net unrealized
gains and losses on securities available-for-sale are excluded in the
computation of regulatory capital ratios.

The primary source of funds available to Newnan Coweta Bancshares, Inc. will be
the payment of dividends by the Bank. Banking regulations limit the amount of
the dividends that may be paid without prior approval of the Banks regulatory
agency. At December 31, 2002, the Bank can pay approximately $197,000
dividends without regulatory approval.

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The minimum capital requirements to be considered well capitalized under prompt
corrective action provisions and the actual capital ratios for Newnan Coweta
Bancshares, Inc. and the Bank as of December 31, 2002 are as follows:

|                           |  |                  |       |             |  |              |       |   |  |  |       |  
|-------------------------- |  | ---------------- | ----- | ----------- |  | ------------ | ----- | - |  |  | ----- | -
|                           |  | Actual          
|                           |  |                 
|                           |  | Newnan Coweta    |       | Newnan      |  | Regulatory  
|                           |  | Bancshares, Inc. |       | Coweta Bank |  | Requirements
|                           |  |                  |       |             |  |             
|Leverage capital ratio     |  |                  | 10.56 | %           |  |              | 10.55 | % |  |  | 5.00  | %
|Risk-based capital ratios: |  |                  |       |             |  |              |       |   |  |  |       |  
|Core capital               |  |                  | 13.13 | %           |  |              | 13.12 | % |  |  | 6.00  | %
|Total capital              |  |                  | 14.35 | %           |  |              | 14.34 | % |  |  | 10.00 | %

These ratios may decline as asset growth continues, but are expected to exceed
the regulatory minimum requirements. Anticipated future earnings will assist in
keeping these ratios at satisfactory levels.

We believe that our liquidity and capital resources are adequate and will meet
our foreseeable short and long-term needs. We anticipate that we will have
sufficient funds available to meet current loan commitments and to fund or
refinance, on a timely basis, our other material commitments and liabilities.

We are not aware of any other known trends, events or uncertainties, other than
those discussed above, that will have or that are reasonably likely to have a
material effect on our liquidity, capital resources or operations. We are also
not aware of any current recommendations by the regulatory authorities that, if
they were implemented, would have such an effect.

EFFECTS OF INFLATION

The impact of inflation on banks differs from its impact on non-financial
institutions. Banks, as financial intermediaries, have assets that are
primarily monetary in nature and that tend to fluctuate in concert with
inflation. A bank can reduce the impact of inflation if it can manage its rate
sensitivity gap. This gap represents the difference between rate sensitive
assets and rate sensitive liabilities. We, through our asset-liability
committee, attempt to structure the assets and liabilities and manage the rate
sensitivity gap, thereby seeking to minimize the potential effects of
inflation. For information on the management of the Banks interest rate
sensitive assets and liabilities, see the Asset/Liability Management section.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

The following is a summary of our operations for the years indicated.

|                          |  |                          |       |      |  |   |       | 
|------------------------- |  | ------------------------ | ----- | ---- |  | - | ----- | 
|                          |  | Years Ended December 31,
|                          |  |                         
|                          |  | 2002                     |       | 2001
|                          |  |                          |       |     
|                          |  | (Dollars in Thousands)  
|Interest income           |  | $                        | 4,686 |      |  | $ | 3,195 | 
|Interest expense          |  |                          | 1,842 |      |  |   | 1,541 | 
|                          |  |                          |       |      |  |   |       | 
|Net interest income       |  |                          | 2,844 |      |  |   | 1,654 | 
|Provision for loan losses |  |                          | 311   |      |  |   | 435   | 
|Other income              |  |                          | 225   |      |  |   | 219   | 
|Other expenses            |  |                          | 1,938 |      |  |   | 1,379 | 
|                          |  |                          |       |      |  |   |       | 
|Pretax income             |  |                          | 820   |      |  |   | 59    | 
|Income taxes              |  |                          | 125   |      |  |   |      | 
|                          |  |                          |       |      |  |   |       | 
|Net income                |  | $                        | 695   |      |  | $ | 59    | 
|                          |  |                          |       |      |  |   |       | 

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NET INTEREST INCOME

Our results of operations are determined by our ability to manage interest
income and expense effectively, to minimize loan and investment losses, to
generate non-interest income, and to control operating expenses. Because
interest rates are determined by market forces and economic conditions beyond
our control, our ability to generate net interest income depends on our ability
to obtain an adequate net interest spread between the rate we pay on
interest-bearing liabilities and the rate we earn on interest-earning assets.

The net yield on average interest-earning assets was 4.06% in 2002 as compared
to 3.92% in 2001. Average loans increased by $29.6 million which was the
primary change in average interest-earning assets that increased overall by
$27.8 million. The rate earned on average interest-earning assets decreased to
6.69% in 2002 from 7.56% in 2001. Average interest-bearing liabilities
increased by $32.1 million with average time deposits accounting for the
majority of this increase. The rate paid on average interest-bearing
liabilities decreased to 3.10% in 2002 as compared to 4.76% in 2001.

PROVISION FOR LOAN LOSSES

The provision for loan losses was $311,000 in 2002 as compared to $435,000 in
2001. The decrease is due to maintaining our allowance for loan losses at a
level based upon the application of our monthly calculation of the allowance
for loan loss methodology. The allowance for loan loss methodology is
calculated by segmenting the loan portfolio into risk classifications. Our
assignment of risk classifications to individual loans considers significant
factors relative to the credit risk and loss exposure in the loan portfolio,
including past due and classified loans, historical experience, underlying
collateral values, and current economic conditions that may affect the
borrowers ability to repay. An allowance percentage is applied to each risk
classification category to establish a general allowance for loan losses. The
allowance percentage determined for each risk classification is based upon our
experience specifically and the historical experience of the banking industry
generally. Based upon our evaluation of the loan portfolio through our
allowance for loan loss methodology, we believe the allowance for loan losses
to be adequate to absorb losses on existing loans that may become
uncollectible. In addition, classified loans, including impaired loans, are
analyzed individually in order to establish a specific allowance for loan
losses. The total of these allowances are recorded as the allowance for loan
losses on a monthly basis. The allowance for loan losses as a percentage of
total loans was 1.21% as of December 31, 2002 compared to 1.29% at December 31,
2001.

OTHER INCOME

Other operating income consists of service charges on deposit accounts and
other miscellaneous revenues and fees. Other operating income was $225,000 in
2002 as compared to $219,000 in 2001 resulting in an increase of $6,000. The
increase is primarily due to an increase in service charges on deposit accounts
related to overall deposit growth of $68,000, offset by a decrease in gains on
sales of securities of $71,000.

OTHER EXPENSES

Other expenses were $1,938,000 in 2002 as compared to $1,379,000 in 2001, or an
increase of $559,000. Salaries and employees benefits increased by $200,000
due to an increase in the number of full time equivalent employees to 21 at
December 31, 2002 from 17 at December 31, 2001 and other annual salary
increases. Equipment and occupancy expenses increased by $125,000 due to
increased depreciation and occupancy costs of our new permanent banking
facility, which was completed in October 2001. Other operating expenses
increased by $233,000 due primarily to increased data processing costs of
$81,000, increased professional fees of $35,000 and increased directors fees
of $25,000. 2002 was the first year directors fees have been paid. The
increases in all other operating expenses were directly related to the overall
growth of the Bank.

INCOME TAXES

Income tax expense was $125,000 for the year ended December 31, 2002 which
resulted in an effective tax rate of 15%. No income taxes were accrued for
the year ended December 31, 2001, due to cumulative operating losses incurred
to date.

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##### Table of Contents



ASSET/LIABILITY MANAGEMENT

Our objective is to manage assets and liabilities to provide a satisfactory,
consistent level of profitability within the framework of established cash,
loan, investment, borrowing, and capital policies. Certain officers are charged
with the responsibility for monitoring policies and procedures designed to
ensure acceptable composition of the asset/liability mix. Managements overall
philosophy is to support asset growth primarily through growth of core deposits
of all categories made by local individuals, partnerships, and corporations.

Our asset/liability mix is monitored on a regular basis with a report
reflecting the interest rate-sensitive assets and interest rate-sensitive
liabilities being prepared and presented to the Banks Board of Directors on a
monthly basis. The objective of this policy is to monitor interest
rate-sensitive assets and liabilities so as to minimize the impact of
substantial movements in interest rates on earnings. An asset or liability is
considered to be interest rate-sensitive if it will re-price or mature within
the time period analyzed, usually one year or less. The interest
rate-sensitivity gap is the difference between the interest-earning assets and
interest-bearing liabilities scheduled to mature or re-price within such time
period. A gap is considered positive when the amount of interest
rate-sensitive assets exceeds the amount of interest rate-sensitive
liabilities. A gap is considered negative when the amount of interest
rate-sensitive liabilities exceeds the interest rate-sensitive assets. During a
period of rising interest rates, a negative gap would tend to affect net
interest income adversely, while a positive gap would tend to result in an
increase in net interest income. Conversely, during a period of falling
interest rates, a negative gap would tend to result in an increase in net
interest income, while a positive gap would tend to affect net interest income
adversely. If our assets and liabilities were equally flexible and moved
concurrently, the impact of any increase or decrease in interest rates on net
interest income would be minimal.

A simple interest rate gap analysis by itself may not be an accurate
indicator of how net interest income will be affected by changes in interest
rates. Accordingly, we also evaluate how the repayment of particular assets and
liabilities is impacted by changes in interest rates. Income associated with
interest-earning assets and costs associated with interest-bearing liabilities
may not be affected uniformly by changes in interest rates. In addition, the
magnitude and duration of changes in interest rates may have a significant
impact on net interest income. For example, although certain assets and
liabilities may have similar maturities or periods of re-pricing, they may
react in different degrees to changes in market interest rates. Interest rates
on certain types of assets and liabilities fluctuate in advance of changes in
general market rates, while interest rates on other types may lag behind
changes in general market rates. In addition, certain assets, such as
adjustable rate mortgage loans, have features (generally referred to as
interest rate caps and floors) that limit changes in interest rates.
Prepayment and early withdrawal levels also could deviate significantly from
those assumed in calculating the interest rate gap. The ability of many
borrowers to service their debts also may decrease during periods of rising
interest rates.

Changes in interest rates also affect our liquidity position. We currently
price deposits in response to market rates and it is managements intention to
continue this policy. If deposits are not priced in response to market rates, a
loss of deposits could occur that would negatively affect our liquidity
position.

At December 31, 2002, our cumulative one-year interest rate-sensitivity gap
ratio was 91%. Our targeted ratio is 80% to 120% in this time horizon. This
indicates that our interest-bearing liabilities will re-price during this
period at a rate faster than our interest-earning assets.

The following table sets forth the distribution of the re-pricing of our
interest-earning assets and interest-bearing liabilities as of December 31,
2002, the interest rate-sensitivity gap, the cumulative interest
rate-sensitivity gap, the interest rate-sensitivity gap ratio and the
cumulative interest rate-sensitivity gap ratio. The table also sets forth the
time periods in which interest-earning assets and interest-bearing liabilities
will mature or may re-price in accordance with their contractual terms.
However, the table does not necessarily indicate the impact of general interest
rate movements on the net interest margin as the re-pricing of various
categories of assets and liabilities is subject to competitive pressures and
the needs of our customers. In addition, various assets and liabilities
indicated as re-pricing within the same period may in fact, re-price at
different times within such period and at different rates.

20



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|                                               |                                              |   |              |        |                     |   |                        |        |            |   |        |        |  |   |        |       |  |   |        |        | 
|---------------------------------------------- | -------------------------------------------- | - | ------------ | ------ | ------------------- | - | ---------------------- | ------ | ---------- | - | ------ | ------ |  | - | ------ | ----- |  | - | ------ | ------ | 
|                                               |                                              |   | Within       |        | After Three Months  |   | After One Year but     |        | After      |   |        |        | 
|                                               |                                              |   | Three Months |        | but Within One Year |   | Within Five Years      |        | Five Years |   | Total 
|                                               |                                              |   |              |        |                     |   |                        |        |            |   |       
|                                               |                                              |   |              |        |                     |   | (Dollars in Thousands) |        |            |   |        |        |  |   |       
|Interest-earning assets:                       |                                              |   |              |        |                     |   |                        |        |            |   |        |        |  |   |        |       |  |   |        |       
|                                               | Int bearing deposits in banks                |   | $            | 1,090  |                     |   | $                      |       |            |   | $      |       |  |   | $      |      |  |   | $      | 1,090  | 
|                                               | Securities                                   |   |              | 1,177  |                     |   |                        | 2,021  |            |   |        | 1,430  |  |   |        | 4,934 |  |   |        | 9,562  | 
|                                               | Loans                                        |   |              | 46,525 |                     |   |                        | 4,861  |            |   |        | 19,199 |  |   |        |      |  |   |        | 70,585 | 
|                                               |                                              |   |              |        |                     |   |                        |        |            |   |        |        |  |   |        |       |  |   |        |       
|                                               |                                              | $ | 48,792       |        |                     | $ | 6,882                  |        |            | $ | 20,629 |        |  | $ | 4,934  |       |  | $ | 81,237 |       
|                                               |                                              |   |              |        |                     |   |                        |        |            |   |        |        |  |   |        |       |  |   |        |       
|Interest-bearing liabilities:                  |                                              |   |              |        |                     |   |                        |        |            |   |        |        |  |   |        |       |  |   |        |       
|                                               | Interest-bearing demand
deposits and savings |   | $            | 17,671 |                     |   | $                      |       |            |   | $      |       |  |   | $      |      |  |   | $      | 17,671 | 
|                                               | Time deposits                                |   |              | 16,414 |                     |   |                        | 26,367 |            |   |        | 9,241  |  |   |        |      |  |   |        | 52,022 | 
|                                               | Federal funds purchased                      |   |              | 397    |                     |   |                        |       |            |   |        |       |  |   |        |      |  |   |        | 397    | 
|                                               |                                              |   |              |        |                     |   |                        |        |            |   |        |        |  |   |        |       |  |   |        |       
|                                               |                                              | $ | 34,482       |        |                     | $ | 26,367                 |        |            | $ | 9,241  |        |  | $ |       |       |  | $ | 70,090 |       
|Interest rate sensitivity
gap                  |                                              | $ | 14,310       |        |                     | $ | (19,485                | )      |            | $ | 11,388 |        |  | $ | 4,934  |       |  | $ | 11,147 |       
|                                               |                                              |   |              |        |                     |   |                        |        |            |   |        |        |  |   |        |       |  |   |        |       
|Cumulative interest rate
sensitivity gap       |                                              | $ | 14,310       |        |                     | $ | (5,175                 | )      |            | $ | 5,852  |        |  | $ | 11,147 |       |  |   |        |       
|                                               |                                              |   |              |        |                     |   |                        |        |            |   |        |        |  |   |        |       |  |   |        |       
|Interest rate sensitivity
gap ratio            |                                              |   | 1.41         |        |                     |   | 0.26                   |        |            |   | 4.12   |        |  |   |       |       |  |   |        |       
|                                               |                                              |   |              |        |                     |   |                        |        |            |   |        |        |  |   |        |       |  |   |        |       
|Cumulative interest rate
sensitivity gap ratio |                                              |   | 1.41         |        |                     |   | 0.91                   |        |            |   | 1.08   |        |  |   | 1.16   |       |  |   |        |       
|                                               |                                              |   |              |        |                     |   |                        |        |            |   |        |        |  |   |        |       |  |   |        |       

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SELECTED FINANCIAL INFORMATION AND STATISTICAL DATA

The tables and schedules on the following pages set forth certain significant
financial information and statistical data with respect to: the distribution of
our assets, liabilities and stockholders equity; the interest rates we
experience; our investment portfolio; our loan portfolio, including types of
loans, maturities, and sensitivities of loans to changes in interest rates and
information on non-performing loans; summary of the loan loss experience and
allowance for loan losses; types of deposits and the return on equity and
assets.

DISTRIBUTION OF ASSETS, LIABILITIES, AND STOCKHOLDERS EQUITY:
INTEREST RATES AND INTEREST DIFFERENTIALS

|                                             |                |   |                        |        |         |   |         |       |             |  |         |   |         |   |        |        |  |   |       |       |  |  |      |   | 
|-------------------------------------------- | -------------- | - | ---------------------- | ------ | ------- | - | ------- | ----- | ----------- |  | ------- | - | ------- | - | ------ | ------ |  | - | ----- | ----- |  |  | ---- | - | 
|                                             |                |   | 2002                   |        | 2001   
|                                             |                |   |                        |        |        
|                                             |                |   | (dollars in thousands)
|                                             |                |   | Average                |        | Income/ |   | Yields/ |       | Average     |  | Income/ |   | Yields/
|                                             |                |   | Balances(1)            |        | Expense |   | Rates   |       | Balances(1) |  | Expense |   | Rates  
|                                             |                |   |                        |        |         |   |         |       |             |  |         |   |        
|Cash and due from banks                      |                | $ | 1,477                  |        |         | $ |        |       |             |  |        | % |         | $ | 973    |        |  | $ |      |       |  |  |     | %
|Taxable securities                           |                |   | 8,382                  |        |         |   | 382     |       |             |  | 4.56    |   |         |   | 5,518  |        |  |   | 326   |       |  |  | 5.91 |  
|Unrealized gains on securities               |                |   | 97                     |        |         |   |        |       |             |  |        |   |         |   | 75     |        |  |   |      |       |  |  |     |  
|Federal funds sold                           |                |   | 3,158                  |        |         |   | 51      |       |             |  | 1.61    |   |         |   | 7,898  |        |  |   | 337   |       |  |  | 4.27 |  
|Loans (2) (3)                                |                |   | 58,455                 |        |         |   | 4,253   |       |             |  | 7.28    |   |         |   | 28,823 |        |  |   | 2,532 |       |  |  | 8.78 |  
|Allowance for loan losses                    |                |   | (728                   | )      |         |   |        |       |             |  |        |   |         |   | (346   | )      |  |   |      |       |  |  |     |  
|Other assets                                 |                |   | 3,069                  |        |         |   |        |       |             |  |        |   |         |   | 1,577  |        |  |   |      |       |  |  |     |  
|                                             |                |   |                        |        |         |   |         |       |             |  |         |   |         |   |        |        |  |   |       |       |  |  |      |  
|                                             |                | $ | 73,910                 |        |         |   |         |       |             |  |         |   |         | $ | 44,518 |        |  |   |       |       |  |  |      |  
|                                             |                |   |                        |        |         |   |         |       |             |  |         |   |         |   |        |        |  |   |       |       |  |  |      |  
|Total interest-earning assets                |                | $ | 69,995                 |        |         | $ | 4,686   |       |             |  | 6.69    | % |         | $ | 42,239 |        |  | $ | 3,195 |       |  |  | 7.56 | %
|                                             |                |   |                        |        |         |   |         |       |             |  |         |   |         |   |        |        |  |   |       |       |  |  |      |  
|Noninterest-bearing demand                   |                | $ | 5,110                  |        |         | $ |        |       |             |  |        | % |         | $ | 3,240  |        |  | $ |      |       |  |  |     | %
|Interest-bearing
demand and savings          |                |   | 18,984                 |        |         |   | 345     |       |             |  | 1.82    |   |         |   | 12,365 |        |  |   | 427   |       |  |  | 3.45 |  
|Time deposits                                |                |   | 40,365                 |        |         |   | 1,496   |       |             |  | 3.71    |   |         |   | 20,010 |        |  |   | 1,113 |       |  |  | 5.56 |  
|                                             |                |   |                        |        |         |   |         |       |             |  |         |   |         |   |        |        |  |   |       |       |  |  |      |  
|                                             | Total deposits |   | $                      | 64,459 |         |   | $       | 1,841 |             |  |         |   |         |   | $      | 35,615 |  |   | $     | 1,540 |  |  |      |   | 
|Other borrowings                             |                |   | 34                     |        |         |   | 1       |       |             |  | 2.94    |   |         |   | 13     |        |  |   | 1     |       |  |  | 4.27 |  
|Other liabilities                            |                |   | 480                    |        |         |   |        |       |             |  |        |   |         |   | 380    |        |  |   |      |       |  |  |     |  
|Stockholders equity (4)                     |                |   | 8,937                  |        |         |   |        |       |             |  |        |   |         |   | 8,510  |        |  |   |      |       |  |  |     |  
|                                             |                |   |                        |        |         |   |         |       |             |  |         |   |         |   |        |        |  |   |       |       |  |  |      |  
|                                             |                | $ | 73,910                 |        |         |   |         |       |             |  |         |   |         | $ | 44,518 |        |  |   |       |       |  |  |      |  
|                                             |                |   |                        |        |         |   |         |       |             |  |         |   |         |   |        |        |  |   |       |       |  |  |      |  
|Total interest-bearing
liabilities           |                | $ | 59,383                 |        |         | $ | 1,842   |       |             |  | 3.10    | % |         | $ | 32,388 |        |  | $ | 1,541 |       |  |  | 4.76 | %
|                                             |                |   |                        |        |         |   |         |       |             |  |         |   |         |   |        |        |  |   |       |       |  |  |      |  
|Net interest income                          |                |   |                        |        |         | $ | 2,844   |       |             |  |         |   |         |   |        |        |  | $ | 1,654 |       |  |  |      |  
|                                             |                |   |                        |        |         |   |         |       |             |  |         |   |         |   |        |        |  |   |       |       |  |  |      |  
|Net interest spread                          |                |   |                        |        |         |   |         |       |             |  | 3.59    | % |         |   |        |        |  |   |       |       |  |  | 2.80 | %
|                                             |                |   |                        |        |         |   |         |       |             |  |         |   |         |   |        |        |  |   |       |       |  |  |      |  
|Net yield on average
interest-earning assets |                |   |                        |        |         |   |         |       |             |  | 4.06    | % |         |   |        |        |  |   |       |       |  |  | 3.92 | %
|                                             |                |   |                        |        |         |   |         |       |             |  |         |   |         |   |        |        |  |   |       |       |  |  |      |  



---

|(1) |  | Average balances were determined using the daily average balances.                                                                                                                                                          
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Includes non-accrual loans with average balances of $9,638 and $5,000 for
the years ended December 31, 2002 and 2001, respectively.                                                                                         
|   
|(3) |  | Interest and fees on loans includes $457,000 and $272,000 of loan fee
income for the years ended December 31, 2002 and 2001, respectively.
There was no interest income recognized on non-accrual loans during 2002
or 2001.
|   
|(4) |  | Average unrealized gains on securities available-for-sale are included in
stockholders equity, net of tax.                                                                                                                 

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##### Table of Contents



RATE AND VOLUME ANALYSIS

The following table describes the extent to which changes in interest rates and
changes in volume of interest-earning assets and interest-bearing liabilities
have affected our interest income and expense during the year indicated. For
each category of interest-earning assets and interest-bearing liabilities,
information is provided on changes attributable to (1) change in volume (change
in volume multiplied by old rate); (2) change in rate (change in rate
multiplied by old volume); and (3) a combination of change in rate and change
in volume. The changes in interest income and interest expense attributable to
both volume and rate have been allocated proportionately on a consistent basis
to the change due to volume and the change due to rate.

|                                           |                                                          |                        |   |                         |      |        |   |       |       |  |   |       |       | 
|------------------------------------------ | -------------------------------------------------------- | ---------------------- | - | ----------------------- | ---- | ------ | - | ----- | ----- |  | - | ----- | ----- | 
|                                           |                                                          |                        |   | Year Ended December 31,
|                                           |                                                          |                        |   | 2002 vs. 2001          
|                                           |                                                          |                        |   |                        
|                                           |                                                          |                        |   | Changes Due To:        
|                                           |                                                          |                        |   |                        
|                                           |                                                          |                        |   | Rate                    |      | Volume |   | Net  
|                                           |                                                          |                        |   |                         |      |        |   |      
|                                           |                                                          |                        |   | (Dollars in Thousands) 
|Increase (decrease) in:                    |                                                          |                        |   |                         |      |        |   |       |       |  |   |      
|                                           | Income from interest-earning assets:                     |                        |   |                         |      |        |   |       |       |  |   |       |      
|                                           | Interest and fees on loans                               |                        | $ | (499                    | )    |        | $ | 2,220 |       |  | $ | 1,721 |      
|                                           | Interest on taxable securities                           |                        |   | (86                     | )    |        |   | 142   |       |  |   | 56    |      
|                                           | Interest on federal funds sold                           |                        |   | (146                    | )    |        |   | (140  | )     |  |   | (286  | )    
|                                           |                                                          |                        |   |                         |      |        |   |       |       |  |   |       |       | 
|                                           |                                                          | Total interest income  |   |                         | (731 | )      |   |       | 2,222 |  |   |       | 1,491 | 
|                                           |                                                          |                        |   |                         |      |        |   |       |       |  |   |       |       | 
|Expense from interest-bearing liabilities: |                                                          |                        |   |                         |      |        |   |       |       |  |   |      
|                                           | Interest on interest-bearing
demand deposits and savings |                        |   | (254                    | )    |        |   | 172   |       |  |   | (82   | )    
|                                           | Interest on time deposits                                |                        |   | (464                    | )    |        |   | 847   |       |  |   | 383   |      
|                                           | Interest on other borrowings                             |                        |   | (1                      | )    |        |   | 1     |       |  |   |      |      
|                                           |                                                          |                        |   |                         |      |        |   |       |       |  |   |       |       | 
|                                           |                                                          | Total interest expense |   |                         | (719 | )      |   |       | 1,020 |  |   |       | 301   | 
|                                           |                                                          |                        |   |                         |      |        |   |       |       |  |   |       |       | 
|                                           |                                                          | Net interest income    |   | $                       | (12  | )      |   | $     | 1,202 |  |   | $     | 1,190 | 
|                                           |                                                          |                        |   |                         |      |        |   |       |       |  |   |       |       | 

INVESTMENT PORTFOLIO

TYPES OF INVESTMENTS

The carrying amounts of securities at the dates indicated, which are all
classified as available-for-sale, are summarized as follows:

|                           |  |                        |       |      |  |   |       | 
|-------------------------- |  | ---------------------- | ----- | ---- |  | - | ----- | 
|                           |  | December 31,          
|                           |  |                       
|                           |  | 2002                   |       | 2001
|                           |  |                        |       |     
|                           |  | (Dollars in Thousands)
|U.S. Government agencies   |  | $                      | 7,006 |      |  | $ | 506   | 
|Mortgage backed securities |  |                        | 2,556 |      |  |   | 5,322 | 
|                           |  |                        |       |      |  |   |       | 
|                           |  | $                      | 9,562 |      |  | $ | 5,828 | 
|                           |  |                        |       |      |  |   |       | 

23



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##### Table of Contents



MATURITIES

The amounts of debt securities in each category as of December 31, 2002 are
shown in the following table according to contractual maturity classifications
(1) one year or less, (2) after one through five years, (3) after five through
ten years and (4) after ten years.

|                           |  |                  |       |                    |  |                   |      |          |  |           |       |            |  |  |      |   |  |   |   |  |  |  |   |  
|-------------------------- |  | ---------------- | ----- | ------------------ |  | ----------------- | ---- | -------- |  | --------- | ----- | ---------- |  |  | ---- | - |  | - | - |  |  |  | - | -
|                           |  |                  |       |                    |  |                   |      |          |  | After one |       | After five
|                           |  | One year or less |       | through five years |  | through ten years
|                           |  |                  |       |                    |  |                  
|                           |  | Amount           |       | Yield(1)           |  | Amount            |      | Yield(1) |  | Amount    |       | Yield(1)  
|                           |  |                  |       |                    |  |                   |      |          |  |           |       |           
|U.S. Government agencies   |  | $                | 2,023 |                    |  |                   | 4.39 | %        |  | $         | 4,983 |            |  |  | 3.36 | % |  | $ |  |  |  |  |  | %
|Mortgage backed securities |  |                  |      |                    |  |                   |     |          |  |           | 2,556 |            |  |  | 5.17 | % |  |   |  |  |  |  |  |  
|                           |  |                  |       |                    |  |                   |      |          |  |           |       |            |  |  |      |   |  |   |   |  |  |  |   |  
|                           |  | $                | 2,023 |                    |  |                   | 4.39 | %        |  | $         | 7,539 |            |  |  | 3.94 | % |  | $ |  |  |  |  |  | %
|                           |  |                  |       |                    |  |                   |      |          |  |           |       |            |  |  |      |   |  |   |   |  |  |  |   |  

|                           |  |                 |   |          |  |        |   |          |  |   |       |  |  |  |      |  
|-------------------------- |  | --------------- | - | -------- |  | ------ | - | -------- |  | - | ----- |  |  |  | ---- | -
|                           |  | After ten years |   | Total   
|                           |  |                 |   |         
|                           |  | Amount          |   | Yield(1) |  | Amount |   | Yield(1)
|                           |  |                 |   |          |  |        |   |         
|U.S. Government agencies   |  | $               |  |          |  |        |  | %        |  | $ | 7,006 |  |  |  | 3.67 | %
|Mortgage backed securities |  |                 |  |          |  |        | % |          |  |   | 2,556 |  |  |  | 5.17 | %
|                           |  |                 |   |          |  |        |   |          |  |   |       |  |  |  |      |  
|                           |  | $               |  |          |  |        |   |          |  | $ | 9,562 |  |  |  | 4.04 | %
|                           |  |                 |   |          |  |        |   |          |  |   |       |  |  |  |      |  



---

|(1) |  | The weighted average yields were computed using coupon interest, adding
discount accretion or
subtracting premium amortization, as appropriate, on a ratable basis over
the life of each security.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

LOAN PORTFOLIO

TYPES OF LOANS

The amounts of loans outstanding at the indicated dates are shown in the
following table according to the type of loan.

|                               |           |   |                        |        |      |   |        |        | 
|------------------------------ | --------- | - | ---------------------- | ------ | ---- | - | ------ | ------ | 
|                               |           |   | December 31,          
|                               |           |   |                       
|                               |           |   | 2002                   |        | 2001
|                               |           |   |                        |        |     
|                               |           |   | (Dollars in Thousands)
|Commercial                     |           | $ | 9,051                  |        |      | $ | 6,206  |       
|Real estate construction       |           |   | 17,572                 |        |      |   | 12,432 |       
|Real estate mortgage           |           |   | 41,164                 |        |      |   | 26,891 |       
|Consumer installment and other |           |   | 2,884                  |        |      |   | 1,860  |       
|                               |           |   |                        |        |      |   |        |       
|                               |           |   | 70,671                 |        |      |   | 47,389 |       
|Deferred loan fees             |           |   | (86                    | )      |      |   | (60    | )     
|Allowance for loan losses      |           |   | (854                   | )      |      |   | (612   | )     
|                               |           |   |                        |        |      |   |        |       
|                               | Net loans |   | $                      | 69,731 |      |   | $      | 46,717 | 
|                               |           |   |                        |        |      |   |        |       

24



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##### Table of Contents



MATURITIES AND SENSITIVITIES OF LOANS TO CHANGES IN INTEREST RATES

Total loans as of December 31, 2002 are shown in the following table
according to contractual maturity classifications (1) one year or less, (2)
after one through five years, and (3) after five years.

|                       |                              |   |        |        | 
|---------------------- | ---------------------------- | - | ------ | ------ | 
|(Dollars in Thousands)
|Commercial             |                              |   |        |       
|                       | One year or less             |   | $      | 5,091  | 
|                       | After one through five years |   |        | 3,952  | 
|                       | After five years             |   |        | 8      | 
|                       |                              |   |        |       
|                       |                              |   | 9,051  |       
|                       |                              |   |        |       
|Construction           |                              |   |        |       
|                       | One year or less             |   |        | 15,772 | 
|                       | After one through five years |   |        | 1,800  | 
|                       | After five years             |   |        |       | 
|                       |                              |   |        |       
|                       |                              |   | 17,572 |       
|                       |                              |   |        |       
|Other                  |                              |   |        |       
|                       | One year or less             |   |        | 13,690 | 
|                       | After one through five years |   |        | 28,396 | 
|                       | After five years             |   |        | 1,962  | 
|                       |                              |   |        |       
|                       |                              |   | 44,048 |       
|                       |                              |   |        |       
|                       |                              | $ | 70,671 |       
|                       |                              |   |        |       

The following table summarizes loans at December 31, 2002 with the due
dates after one year that have predetermined and floating or adjustable
interest rates.

|                                      |  |                        |        | 
|------------------------------------- |  | ---------------------- | ------ | 
|                                      |  | (Dollars in Thousands)
|Predetermined interest rates          |  | $                      | 19,169 | 
|Floating or adjustable interest rates |  |                        | 16,949 | 
|                                      |  |                        |        | 
|                                      |  |                        | 36,118 | 
|                                      |  |                        |        | 

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RISK ELEMENTS

Information with respect to non-accrual, past due, restructured and other
problem loans at December 31, 2002 and 2001 is as follows:

|                                                                                                                              |  |                        |   |      |  |   |    | 
|----------------------------------------------------------------------------------------------------------------------------- |  | ---------------------- | - | ---- |  | - | -- | 
|                                                                                                                              |  | December 31,          
|                                                                                                                              |  |                       
|                                                                                                                              |  | 2002                   |   | 2001
|                                                                                                                              |  |                        |   |     
|                                                                                                                              |  | (Dollars in Thousands)
|Non-accrual loans                                                                                                             |  | $                      | 0 |      |  | $ | 20 | 
|Loans contractually past due ninety
days or more as to interest or
principal payments and still accruing                      |  |                        | 0 |      |  |   | 0  | 
|Restructured loans                                                                                                            |  |                        | 0 |      |  |   | 0  | 
|Loans, now current about which there are
serious doubts as to the ability of the
borrower to comply with loan repayment terms |  |                        | 0 |      |  |   | 0  | 
|Interest income that would have been recorded
on non-accrual and restructured loans under
original terms                      |  |                        | 0 |      |  |   | 1  | 
|Interest income that was recorded on
non-accrual and restructured loans                                                       |  |                        | 0 |      |  |   | 0  | 

It is our policy to discontinue the accrual of interest income when, in our
opinion, collection of interest becomes doubtful. We will generally
discontinue the accrual of interest income when (1) there is a significant
deterioration in the financial condition of the borrower and full repayment of
principal and interest is not expected and (2) the principal or interest is
more than ninety days past due, unless the loan is both well-secured and in the
process of collection.

Loans classified for regulatory purposes as loss, doubtful, substandard, or
special mention that have not been included in the table above do not represent
or result from trends or uncertainties which we reasonably expect will
materially impact future operating results, liquidity, or capital resources.
These classified loans do not represent material credits about which we are
aware of any information that causes us to have serious doubts as to the
ability of such borrowers to comply with the loan repayment terms.

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SUMMARY OF LOAN LOSS EXPERIENCE

The following table summarizes average loan balances for the year
determined using the daily average balances during the year; changes in the
allowance for loan losses arising from loans charged off; recoveries on loans
previously charged off; additions to the allowance which have been charged to
operating expense; and the ratio of net charge-offs during the year to average
loans.

|                                                                |  |                        |        |      |  |   |        |  
|--------------------------------------------------------------- |  | ---------------------- | ------ | ---- |  | - | ------ | -
|                                                                |  | December 31,          
|                                                                |  |                       
|                                                                |  | 2002                   |        | 2001
|                                                                |  |                        |        |     
|                                                                |  | (Dollars in Thousands)
|Average amount of loans outstanding                             |  | $                      | 58,455 |      |  | $ | 28,823 |  
|                                                                |  |                        |        |      |  |   |        |  
|Balance of allowance for loan losses
at beginning of year       |  | $                      | 612    |      |  | $ | 180    |  
|                                                                |  |                        |        |      |  |   |        |  
|Loans charged off                                              
|Commercial                                                      |  |                        | 51     |      |  |   |       |  
|Real estate mortgage                                            |  |                        | 3      |      |  |   | 3      |  
|Installment                                                     |  |                        | 40     |      |  |   |       |  
|                                                                |  |                        |        |      |  |   |        |  
|                                                                |  |                        | 94     |      |  |   | 3      |  
|                                                                |  |                        |        |      |  |   |        |  
|Loans recovered                                                
|Commercial                                                      |  |                        | 21     |      |  |   |       |  
|Real estate mortgage                                            |  |                        |       |      |  |   |       |  
|Installment                                                     |  |                        | 4      |      |  |   |       |  
|                                                                |  |                        |        |      |  |   |        |  
|                                                                |  |                        | 25     |      |  |   |       |  
|                                                                |  |                        |        |      |  |   |        |  
|Net charge-offs                                                 |  |                        | 69     |      |  |   | 3      |  
|                                                                |  |                        |        |      |  |   |        |  
|Additions to allowance charged to operating
expense during year |  |                        | 311    |      |  |   | 435    |  
|                                                                |  |                        |        |      |  |   |        |  
|Balance of allowance for loan losses
at end of year             |  | $                      | 854    |      |  | $ | 612    |  
|                                                                |  |                        |        |      |  |   |        |  
|Ratio of net loans charged off during the year to average       |  |                        |        |      |  |   |        |  
|loans outstanding                                               |  |                        | .12    | %    |  |   | .01    | %
|                                                                |  |                        |        |      |  |   |        |  

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ALLOWANCE FOR LOAN LOSSES

The allowance for loan losses is maintained at a level that is deemed
appropriate by management to adequately cover all known and inherent risks in
the loan portfolio. Managements evaluation of the loan portfolio includes a
periodic review of loan loss experience, current economic conditions that may
affect the borrowers ability to pay and the underlying collateral value of the
loans.

Based on our best estimate, the allocation of the allowance for loan
losses to types of loans, as of the indicated dates, is as follows:

|                               |  |                        |     |                     |  |        |     |         |  |   |     |  |  |  |     |  
|------------------------------ |  | ---------------------- | --- | ------------------- |  | ------ | --- | ------- |  | - | --- |  |  |  | --- | -
|                               |  | December 31, 2002      |     | December 31, 2001  
|                               |  | Percent of loans in    |     | Percent of loans in
|                               |  | each category          |     | each category      
|                               |  | to total loans         |     | to total loans     
|                               |  |                        |     |                    
|                               |  | Amount                 |     | Percent             |  | Amount |     | Percent
|                               |  |                        |     |                     |  |        |     |        
|                               |  | (Dollars in Thousands)
|Commercial                     |  | $                      | 111 |                     |  |        | 13  | %       |  | $ | 136 |  |  |  | 13  | %
|Real estate  construction     |  |                        | 214 |                     |  |        | 25  |         |  |   | 151 |  |  |  | 26  |  
|Real estate  mortgage         |  |                        | 495 |                     |  |        | 58  |         |  |   | 302 |  |  |  | 57  |  
|Consumer installment and other |  |                        | 34  |                     |  |        | 4   |         |  |   | 23  |  |  |  | 4   |  
|                               |  |                        |     |                     |  |        |     |         |  |   |     |  |  |  |     |  
|                               |  | $                      | 854 |                     |  |        | 100 | %       |  | $ | 612 |  |  |  | 100 | %
|                               |  |                        |     |                     |  |        |     |         |  |   |     |  |  |  |     |  

DEPOSITS

Average amount of deposits and average rates
paid thereon, classified as
to noninterest-bearing demand deposits, interest-bearing demand and savings
deposits and time deposits is presented below. (1)



|                                    |  |        |        |         |  |                          |      |         |  |   |        |  |  |  |      |  
|----------------------------------- |  | ------ | ------ | ------- |  | ------------------------ | ---- | ------- |  | - | ------ |  |  |  | ---- | -
|                                    |  |        |        |         |  | Years Ended December 31, |      |         |  |  
|                                    |  |        |        |         |  |                         
|                                    |  | 2002   |        | 2001   
|                                    |  |        |        |        
|                                    |  | Amount |        | Percent |  | Amount                   |      | Percent
|                                    |  |        |        |         |  |                          |      |        
|                                    |  |        |        |         |  | (Dollars in Thousands)   |      |         |  |  
|Noninterest-bearing demand          |  | $      | 5,110  |         |  |                          |     | %       |  | $ | 3,240  |  |  |  |     | %
|Interest-bearing demand and savings |  |        | 18,984 |         |  |                          | 1.82 |         |  |   | 12,365 |  |  |  | 3.45 |  
|Time deposits                       |  |        | 40,365 |         |  |                          | 3.70 |         |  |   | 20,010 |  |  |  | 5.56 |  
|                                    |  |        |        |         |  |                          |      |         |  |   |        |  |  |  |      |  
|                                    |  | $      | 64,459 |         |  |                          |      |         |  | $ | 35,615 |  |  |  |      |  
|                                    |  |        |        |         |  |                          |      |         |  |   |        |  |  |  |      |  



---

|(1) |  | Average balances were determined using the daily average balances
during the year.
|--- |  | ----------------------------------------------------------------------------------

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The amounts of time certificates of deposit issued in amounts of $100,000
or more as of December 31, 2002 are shown below by category, which is based on
time remaining until maturity of (1) three months or less, (2) over three
through six months, (3) over six through twelve months, and (4) over twelve
months.

|                                     |       |   |                        |        | 
|------------------------------------ | ----- | - | ---------------------- | ------ | 
|                                     |       |   | (Dollars in Thousands)
|Three months or less                 |       | $ | 4,290                  |       
|Over three months through six months |       |   | 9,495                  |       
|Over six through twelve months       |       |   | 4,796                  |       
|Over twelve months                   |       |   | 4,016                  |       
|                                     |       |   |                        |       
|                                     | Total |   |                        | 22,597 | 
|                                     |       |   |                        |       

RETURN ON ASSETS AND STOCKHOLDERS EQUITY

The following rate of return information for the year indicated is
presented below.

|                           |  |              |       |      |  |  |       |  
|-------------------------- |  | ------------ | ----- | ---- |  |  | ----- | -
|                           |  | December 31,
|                           |  |             
|                           |  | 2002         |       | 2001
|                           |  |              |       |     
|Return on assets (1)       |  |              | .94   | %    |  |  | .13   | %
|Return on equity (2)       |  |              | 7.78  | %    |  |  | .69   | %
|Dividend payout ratio (3)  |  |              |      |      |  |  |      |  
|Equity to assets ratio (4) |  |              | 12.09 | %    |  |  | 19.12 | %



---

|(1) |  | Net income divided by average total assets.                                  
|--- |  | -----------------------------------------------------------------------------
|   
|(2) |  | Net income divided by average equity.                                        
|   
|(3) |  | Dividends declared per share of common stock divided by net income
per share.
|   
|(4) |  | Average equity divided by average total assets.                              

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##### Table of Contents






ITEM 7. FINANCIAL STATEMENTS

The following consolidated financial statements of the Company and its
subsidiary, together with the Report of Independent Certified Public
Accountants thereon, are included on pages F-1 through F-35 and made a part of
this Annual Report on Form 10-KSB:

Independent Auditors Report on the consolidated financial statements

Consolidated Balance Sheets as of December 31, 2002 and 2001

Consolidated Statements of Income for the years ended December 31, 2002
and 2001

Consolidated Statements of Comprehensive Income for the years ended
December 31, 2002
and 2001

Consolidated Statements of Stockholders Equity for the years ended
December 31, 2002 and 2001

Consolidated Statements of Cash Flows for the years ended December 31,
2002 and 2001

Notes to Consolidated Financial Statements




ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE



| |                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Neither the Company nor the Bank had any change in accountants or
disagreements with
accountants on accounting and financial disclosure during the two most
recent fiscal years or
subsequently.




PART III




ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

The information appearing under the heading Election of Directors and
the subheadings Executive Officers and Section 16(a) Beneficial Ownership
Reporting Compliance in the Proxy Statement (the 2003 Proxy Statement)
relating to the annual meeting of shareholders of the Company,
expected to be
held in May, 2003, is incorporated herein by reference.




ITEM 10. EXECUTIVE COMPENSATION

The information appearing under the heading Compensation of Executive
Officers and Directors in the 2003 Proxy Statement is incorporated herein by
reference.




ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information appearing under the heading Outstanding Voting Securities
of the Company and Principal Holders Thereof in the 2003 Proxy Statement is
incorporated herein by reference.




ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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The information appearing under the caption Certain Relationships and
Transactions in the 2003 Proxy Statement is incorporated herein by reference.




ITEM 13. EXHIBITS, LIST  AND REPORTS ON FORM 8-K

(a)  The following exhibits are filed as a part of or incorporated by reference
in this report:

|            |  |                                                                                                                                                                                                                                                                                   
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                       
|            |  |                                                                                                                                                                                                                                                                                   
|2.1         |  | Reorganization Agreement dated April 12, 2001 by and among the
Registrant, Newnan Coweta Bank and Newnan Interim Corporation (filed as
Exhibit 2.1 to the Registrants Form 8-K12g3 previously filed with the
Commission on October 11, 2001 and incorporated herein by reference)
|3.1         |  | Articles of Incorporation of the Company (filed as Exhibit 3.1 to the
Registrants Form 8-K12g3 previously filed with the Commission on October
11, 2001 and incorporated herein by reference)                                                                                    
|3.2         |  | Bylaws of the Company, as amended (filed as Exhibit 3.2 to the
Registrants Form 8-K12g3 previously filed with the Commission on October
11, 2001 and incorporated herein by reference)                                                                                           
|10.1        |  | 2001 Incentive Stock Option Plan (filed as Exhibit 10.1 of Registrants
Form 10-KSB previously filed with the Commission on March 29, 2002 and
incorporated herein by reference)*                                                                                                 
|10.2        |  | Employment Agreement of James B. Kimsey (filed as Exhibit 6.2 to Exhibit
99.1 of the Registrants Form 8-K12g3 previously filed with the Commission
on October 11, 2001 and incorporated herein by reference)*                                                                    
|21          |  | Subsidiaries of the Registrant                                                                                                                                                                                                                                                    
|23          |  | Consent of Mauldin & Jenkins, LLC.                                                                                                                                                                                                                                                
|99.1        |  | Certificate of CEO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                     
|99.2        |  | Certificate of CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                     




*     Denotes a management contract or compensatory
plan or arrangement


(b)  There were no reports on Form 8-K filed by the Company during the fourth
quarter of 2002.

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##### Table of Contents






ITEM 14. CONTROLS AND PROCEDURES

|    |  |                                                                                                                                                                                                                                                                                                                                                   
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Evaluation of disclosure controls and procedures                                                                                                                                                                                                                                                                                                  
|    |  |                                                                                                                                                                                                                                                                                                                                                   
|    |  | The Companys Chief Executive Officer and Chief Financial Officer believe
that the Companys disclosure controls and procedures, as defined in
Securities Exchange Act Rules 13a-14(c) and 15d-14(c), are effective.
This conclusion was reached after an evaluation of these controls and
procedures within 90 days of the filing of this Report.
|    |  |                                                                                                                                                                                                                                                                                                                                                   
|(b) |  | Changes in internal controls                                                                                                                                                                                                                                                                                                                      
|    |  |                                                                                                                                                                                                                                                                                                                                                   
|    |  | We are not aware of any significant changes in the Companys internal
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses, or in other factors that could
significantly affect these controls after December 31, 2002.                                                                     

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SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

| |  |                                             |  |                                                                           
| |  | ------------------------------------------- |  | --------------------------------------------------------------------------
| |  | NEWNAN COWETA BANCSHARES, INC.
(Registrant)
| |  |                                             |  |                                                                           
| |  | By:                                         |  | /s/  James
B. Kimsey                                                      
| |  |                                             |  |                                                                           
| |  |                                             |  | James B. Kimsey
President and Chief Executive Officer
Date: March 19, 2003

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.

|                                                                                                                          |  |                      
|------------------------------------------------------------------------------------------------------------------------- |  | ---------------------
|/s/  James B. KimseyJames B. Kimsey, President,
Chief Executive Officer and Director
[Principal Executive Officer]        |  | Date:  March 19, 2003
|                                                                                                                         
|/s/  Ann B. BledsoeAnn B. Bledsoe,
Chief Financial Officer
[Principal Financial Officer and
Principal Accounting Officer] |  | Date:  March 19, 2003
|                                                                                                                         
|/s/  Robert E. CordleRobert E. Cordle, Director                                                                           |  | Date:  March 19, 2003
|                                                                                                                         
|/s/  Joe S. Crain, Jr.Joe S. Crain, Jr., Director                                                                         |  | Date:  March 19, 2003
|                                                                                                                         
|/s/  Douglas T. DavistonDouglas T. Daviston, Director                                                                     |  | Date:  March 19, 2003

33



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|                                                                               |  |                      
|------------------------------------------------------------------------------ |  | ---------------------
|                                                                              
|/s/ OTIS F. JONES, IIIOTIS F. JONES, III, Director                             |  | Date:  March 19, 2003
|                                                                              
|/s/ DAVID LAGUARDIADAVID LAGUARDIA, Director                                   |  | Date:  March 19, 2003
|                                                                              
|/s/ BOB B. MANN, JBOB B. MANN, J, Director                                     |  | Date:  March 19, 2003
|                                                                              
|/s/ THEO D. MANNTHEO D. MANN, Director                                         |  | Date:  March 19, 2003
|                                                                              
|/s/ DENNIS H. MCDOWELL, IIDENNIS H. MCDOWELL, II, Director                     |  | Date:  March 19, 2003
|                                                                              
|/s/ J. WALKER MOODYJ. WALKER MOODY, Director                                   |  | Date:  March 19, 2003
|                                                                              
|/s/ JAMES VAN S. MOTTOLAJAMES VAN S. MOTTOLA, Director & Chairman of the Board |  | Date:  March 19, 2003
|                                                                              
|/s/ MELVIN SAMUELSMELVIN SAMUELS, Director                                     |  | Date:  March 19, 2003
|                                                                              
|/s/ DONALD L. SPRAYBERRY, JR.DONALD L. SPRAYBERRY, JR., Director               |  | Date:  March 19, 2003
|                                                                              
|/s/ JENNIFER J. THOMASSONJENNIFER J. THOMASSON, Director                       |  | Date:  March 19, 2003
|                                                                              
|/s/ WOODIE T. WOODWOODIE T. WOOD, Director                                     |  | Date:  March 19, 2003

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CERTIFICATION

I, James B. Kimsey, certify that:

1.     I have reviewed this annual report on Form 10-KSB of Newnan Coweta
Bancshares, Inc.;

2.     Based on my knowledge, this annual report 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 this annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, 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 this annual report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) Designated such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

b) Evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the Evaluation Date); and

c) Presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in
this annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                     |  |                                            
|-------------------- |  | -------------------------------------------
|Date: March 19, 2003 |  |                                            
|                     |  | /s/ James B. Kimsey                        
|                     |  |                                            
|                     |  | James B. Kimsey
Principal Executive Officer

35



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CERTIFICATION

I, Ann B. Bledsoe, certify that:

1.     I have reviewed this annual report on Form 10-KSB of Newnan Coweta
Bancshares, Inc.;

2.     Based on my knowledge, this annual report 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 this annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, 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 this annual report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) Designated such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

b) Evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
annual report (the Evaluation Date); and

c) Presented in this annual report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in
this annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                     |  |                                           
|-------------------- |  | ------------------------------------------
|Date: March 19, 2003 |  |                                           
|                     |  | /s/ Ann B. Bledsoe;                       
|                     |  |                                           
|                     |  | Ann B. Bledsoe
Principal Financial Officer

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NEWNAN COWETA BANCSHARES, INC.
AND SUBSIDIARY

CONSOLIDATED FINANCIAL REPORT

DECEMBER 31, 2002





---



##### Table of Contents



NEWNAN COWETA BANCSHARES, INC.
AND SUBSIDIARY

CONSOLIDATED FINANCIAL REPORT
DECEMBER 31, 2002

TABLE OF CONTENTS

|                             |                                                 |  |      |            | 
|---------------------------- | ----------------------------------------------- |  | ---- | ---------- | 
|                             |                                                 |  | Page
|                             |                                                 |  |     
|INDEPENDENT AUDITORS REPORT |                                                 |  | F-1  |           
|FINANCIAL STATEMENTS         |                                                 |  |      |           
|                             | Consolidated balance sheets                     |  |      | F-2        | 
|                             | Consolidated statements of income               |  |      | F-3        | 
|                             | Consolidated statements of comprehensive income |  |      | F-4        | 
|                             | Consolidated statements of stockholders equity |  |      | F-5        | 
|                             | Consolidated statements of cash flows           |  |      | F-6        | 
|                             | Notes to consolidated financial statements      |  |      | F-7  F-24 | 





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##### Table of Contents



INDEPENDENT AUDITORS REPORT

To the Board of Directors
Newnan Coweta Bancshares, Inc.
Newnan, Georgia

We have audited the accompanying consolidated balance sheets of Newnan
Coweta Bancshares, Inc. and subsidiaryas of December 31, 2002 and 2001, and
the related consolidated statements of income, comprehensive income,
stockholders equity and cash flows for the years then ended. These financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Newnan Coweta Bancshares,
Inc. and subsidiary as of December 31, 2002 and 2001, and the results of their
operations and their cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of America.



| | /s/   Mauldin & Jenkins, LLC
| | ----------------------------



Atlanta, GeorgiaFebruary 7, 2003

F-1



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##### Table of Contents



NEWNAN COWETA BANCSHARES, INC.
AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2002 AND 2001

|                                                                                               |                                        |                                            |                |                                      |            |            |            |            |            |            |  | 
|---------------------------------------------------------------------------------------------- | -------------------------------------- | ------------------------------------------ | -------------- | ------------------------------------ | ---------- | ---------- | ---------- | ---------- | ---------- | ---------- |  | 
|                                                                                               |                                        |                                            |                |                                      |            | 2002       |            | 2001      
|                                                                                               |                                        |                                            |                |                                      |            |            |            |           
|Assets                                                                                         |                                        |                                            |                |                                      |            |            |            |           
|Cash and due from banks                                                                        |                                        | $                                          | 1,964,048      |                                      |            | $          | 3,053,845  |           
|Interest-bearing deposits in banks                                                             |                                        |                                            | 1,090,252      |                                      |            |            |           |           
|Federal funds sold                                                                             |                                        |                                            |               |                                      |            |            | 2,079,000  |           
|Securities available-for-sale                                                                  |                                        |                                            | 9,562,056      |                                      |            |            | 5,828,398  |           
|Loans                                                                                          |                                        |                                            | 70,585,025     |                                      |            |            | 47,329,659 |           
|Less allowance for loan losses                                                                 |                                        |                                            | 853,917        |                                      |            |            | 612,330    |           
|                                                                                               |                                        |                                            |                |                                      |            |            |            |           
|                                                                                               |                                        | Loans, net                                 |                |                                      | 69,731,108 |            |            |            | 46,717,329 |           
|Premises and equipment                                                                         |                                        |                                            | 2,671,794      |                                      |            |            | 2,630,149  |           
|Other assets                                                                                   |                                        |                                            | 912,545        |                                      |            |            | 661,636    |           
|                                                                                               |                                        |                                            |                |                                      |            |            |            |           
|                                                                                               |                                        | Total assets                               |                | $                                    | 85,931,803 |            |            | $          | 60,970,357 |           
|                                                                                               |                                        |                                            |                |                                      |            |            |            |           
|                                                                                               |                                        |                                            |                | Liabilities and Stockholders Equity |            |            |            |            |            |            |  | 
|Deposits                                                                                       |                                        |                                            |                |                                      |            |            |            |            |           
|Noninterest-bearing                                                                            |                                        | $                                          | 5,784,403      |                                      |            | $          | 3,600,465  |           
|                                                                                               | Interest-bearing                       |                                            |                | 69,692,603                           |            |            |            | 48,192,328 |           
|                                                                                               |                                        |                                            |                |                                      |            |            |            |           
|                                                                                               |                                        |                                            | Total deposits |                                      |            | 75,477,006 |            |            |            | 51,792,793 | 
|Federal funds purchased                                                                        |                                        |                                            | 397,000        |                                      |            |            |           |           
|Other borrowings                                                                               |                                        |                                            |               |                                      |            |            | 35,000     |           
|Other liabilities                                                                              |                                        |                                            | 758,042        |                                      |            |            | 505,458    |           
|                                                                                               |                                        |                                            |                |                                      |            |            |            |           
|                                                                                               |                                        | Total liabilities                          |                |                                      | 76,632,048 |            |            |            | 52,333,251 |           
|                                                                                               |                                        |                                            |                |                                      |            |            |            |           
|Commitments and contingencies                                                                  |                                        |                                            |                |                                      |            |            |            |           
|Stockholders equity                                                                           |                                        |                                            |                |                                      |            |            |            |           
|Common stock, no par value, 5,000,000 shares authorized;
900,000 shares issued and outstanding |                                        |                                            | 8,979,916      |                                      |            |            | 8,979,916  |           
|                                                                                               | Retained earnings (deficit)            |                                            |                | 208,463                              |            |            |            | (486,340   | )         
|                                                                                               | Accumulated other comprehensive income |                                            |                | 111,376                              |            |            |            | 143,530    |           
|                                                                                               |                                        |                                            |                |                                      |            |            |            |           
|                                                                                               |                                        | Total stockholders equity                 |                |                                      | 9,299,755  |            |            |            | 8,637,106  |           
|                                                                                               |                                        |                                            |                |                                      |            |            |            |           
|                                                                                               |                                        | Total liabilities and stockholders equity |                | $                                    | 85,931,803 |            |            | $          | 60,970,357 |           
|                                                                                               |                                        |                                            |                |                                      |            |            |            |           

See Notes to Consolidated Financial Statements.

F-2



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NEWNAN COWETA BANCSHARES, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2002 AND 2001

|                           |                                                |                                                     |         |           |           |      |         |           |           | 
|-------------------------- | ---------------------------------------------- | --------------------------------------------------- | ------- | --------- | --------- | ---- | ------- | --------- | --------- | 
|                           |                                                |                                                     |         | 2002      |           | 2001
|                           |                                                |                                                     |         |           |           |     
|Interest income            |                                                |                                                     |         |           |           |      |         |          
|                           | Loans, including fees                          |                                                     | $       | 4,252,925 |           |      | $       | 2,531,977 |          
|                           | Taxable securities                             |                                                     |         | 381,826   |           |      |         | 325,952   |          
|                           | Federal funds sold                             |                                                     |         | 50,845    |           |      |         | 337,336   |          
|                           |                                                |                                                     |         |           |           |      |         |          
|                           |                                                | Total interest income                               |         |           | 4,685,596 |      |         |           | 3,195,265 | 
|                           |                                                |                                                     |         |           |           |      |         |          
|Interest expense           |                                                |                                                     |         |           |           |      |         |          
|                           | Deposits                                       |                                                     |         | 1,840,107 |           |      |         | 1,540,646 |          
|                           | Other borrowings                               |                                                     |         | 1,431     |           |      |         | 555       |          
|                           |                                                |                                                     |         |           |           |      |         |          
|                           |                                                | Total interest expense                              |         |           | 1,841,538 |      |         |           | 1,541,201 | 
|                           |                                                |                                                     |         |           |           |      |         |          
|                           |                                                | Net interest income                                 |         |           | 2,844,058 |      |         |           | 1,654,064 | 
|Provision for loan losses  |                                                |                                                     | 311,270 |           |           |      | 435,020 |          
|                           |                                                |                                                     |         |           |           |      |         |          
|                           |                                                | Net interest income after provision for loan losses |         |           | 2,532,788 |      |         |           | 1,219,044 | 
|                           |                                                |                                                     |         |           |           |      |         |          
|Other income               |                                                |                                                     |         |           |           |      |         |          
|                           | Service charges on deposit accounts            |                                                     |         | 193,746   |           |      |         | 126,018   |          
|                           | Gain on sales of securities available-for-sale |                                                     |         |          |           |      |         | 71,237    |          
|                           | Other operating income                         |                                                     |         | 31,253    |           |      |         | 21,895    |          
|                           |                                                |                                                     |         |           |           |      |         |          
|                           |                                                | Total other income                                  |         |           | 224,999   |      |         |           | 219,150   | 
|                           |                                                |                                                     |         |           |           |      |         |          
|Other expenses             |                                                |                                                     |         |           |           |      |         |          
|                           | Salaries and employee benefits                 |                                                     |         | 958,441   |           |      |         | 758,486   |          
|                           | Equipment and occupancy expenses               |                                                     |         | 269,490   |           |      |         | 144,148   |          
|                           | Other operating expenses                       |                                                     |         | 709,817   |           |      |         | 476,896   |          
|                           |                                                |                                                     |         |           |           |      |         |          
|                           |                                                | Total other expenses                                |         |           | 1,937,748 |      |         |           | 1,379,530 | 
|                           |                                                |                                                     |         |           |           |      |         |          
|                           |                                                | Income before income taxes                          |         |           | 820,039   |      |         |           | 58,664    | 
|Income tax expense         |                                                |                                                     | 125,236 |           |           |      |        |          
|                           |                                                |                                                     |         |           |           |      |         |          
|                           |                                                | Net income                                          |         | $         | 694,803   |      |         | $         | 58,664    | 
|                           |                                                |                                                     |         |           |           |      |         |          
|Basic earnings per share   |                                                | $                                                   | 0.77    |           |           | $    | 0.07    |          
|                           |                                                |                                                     |         |           |           |      |         |          
|Diluted earnings per share |                                                | $                                                   | 0.76    |           |           | $    | 0.07    |          
|                           |                                                |                                                     |         |           |           |      |         |          

See Notes to Consolidated Financial Statements.

F-3



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NEWNAN COWETA BANCSHARES, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 2002 AND 2001

|                                   |                                                                                                                             |   |         |         |      |   |         |         |  
|---------------------------------- | --------------------------------------------------------------------------------------------------------------------------- | - | ------- | ------- | ---- | - | ------- | ------- | -
|                                   |                                                                                                                             |   | 2002    |         | 2001
|                                   |                                                                                                                             |   |         |         |     
|Net income                         |                                                                                                                             | $ | 694,803 |         |      | $ | 58,664  |        
|                                   |                                                                                                                             |   |         |         |      |   |         |        
|Other comprehensive income (loss): |                                                                                                                             |   |         |         |      |   |         |        
|                                   | Unrealized holding gains on securities available-for-sale
arising during period, net of tax of $68,263 and $, respectively |   |         | (32,154 | )    |   |         | 151,093 |  
|                                   | Reclassification adjustments for gains on sales of securities
available-for-sale realized in net income                     |   |         |        |      |   |         | (71,237 | )
|                                   |                                                                                                                             |   |         |         |      |   |         |        
|Other comprehensive income (loss)  |                                                                                                                             |   | (32,154 | )       |      |   | 79,856  |        
|                                   |                                                                                                                             |   |         |         |      |   |         |        
|Comprehensive income               |                                                                                                                             | $ | 662,649 |         |      | $ | 138,520 |        
|                                   |                                                                                                                             |   |         |         |      |   |         |        

See Notes to Consolidated Financial Statements.

F-4



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NEWNAN COWETA BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
YEARS ENDED DECEMBER 31, 2002 AND 2001

|                           |                            |  |              |   |          |   |               |   |               |   |          |         |  |   |             |         |   |   |           |         |  
|-------------------------- | -------------------------- |  | ------------ | - | -------- | - | ------------- | - | ------------- | - | -------- | ------- |  | - | ----------- | ------- | - | - | --------- | ------- | -
|                           |                            |  |              |   |          |   |               |   |               |   |          |         |  |   | Accumulated |         |   |   |          
|                           |                            |  | Common Stock |   | Retained |   | Other         |   | Total        
|                           |                            |  |              |   | Earnings |   | Comprehensive |   | Stockholders'
|                           |                            |  | Shares       |   | Paid In  |   | (Deficit)     |   | Income        |   | Equity  
|                           |                            |  |              |   |          |   |               |   |               |   |         
|Balance, December 31, 2000 |                            |  | 900,000      |   |          | $ | 8,979,916     |   |               | $ | (545,004 | )       |  | $ | 63,674      |         |   | $ | 8,498,586 |        
|                           | Net income                 |  |              |  |          |   |               |  |               |   |          | 58,664  |  |   |             |        |   |   |           | 58,664  |  
|                           | Other comprehensive income |  |              |  |          |   |               |  |               |   |          |        |  |   |             | 79,856  |   |   |           | 79,856  |  
|                           |                            |  |              |   |          |   |               |   |               |   |          |         |  |   |             |         |   |   |           |        
|Balance, December 31, 2001 |                            |  | 900,000      |   |          |   | 8,979,916     |   |               |   | (486,340 | )       |  |   | 143,530     |         |   |   | 8,637,106 |        
|                           | Net income                 |  |              |  |          |   |               |  |               |   |          | 694,803 |  |   |             |        |   |   |           | 694,803 |  
|                           | Other comprehensive loss   |  |              |  |          |   |               |  |               |   |          |        |  |   |             | (32,154 | ) |   |           | (32,154 | )
|                           |                            |  |              |   |          |   |               |   |               |   |          |         |  |   |             |         |   |   |           |        
|Balance, December 31, 2002 |                            |  | 900,000      |   |          | $ | 8,979,916     |   |               | $ | 208,463  |         |  | $ | 111,376     |         |   | $ | 9,299,755 |        
|                           |                            |  |              |   |          |   |               |   |               |   |          |         |  |   |             |         |   |   |           |        

See Notes to Consolidated Financial Statements.

F-5



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NEWNAN COWETA BANCSHARES, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2002 AND 2001

|                                                   |                                                                                   |                                                |                                           |                                           |           |             |           |             |           |             |         | 
|-------------------------------------------------- | --------------------------------------------------------------------------------- | ---------------------------------------------- | ----------------------------------------- | ----------------------------------------- | --------- | ----------- | --------- | ----------- | --------- | ----------- | ------- | 
|                                                   |                                                                                   |                                                |                                           |                                           |           | 2002        |           | 2001       
|                                                   |                                                                                   |                                                |                                           |                                           |           |             |           |            
|OPERATING ACTIVITIES                               |                                                                                   |                                                |                                           |                                           |           |             |           |            
|                                                   | Net income                                                                        |                                                | $                                         | 694,803                                   |           |             | $         | 58,664      |          
|                                                   | Adjustments to reconcile net income to net cash
provided by operating activities: |                                                |                                           |                                           |           |             |           |             |          
|                                                   |                                                                                   | Depreciation                                   |                                           |                                           | 150,081   |             |           |             | 91,495    |            
|                                                   |                                                                                   | Provision for loan losses                      |                                           |                                           | 311,270   |             |           |             | 435,020   |            
|                                                   |                                                                                   | Deferred income taxes                          |                                           |                                           | (204,171  | )           |           |             | (32,095   | )          
|                                                   |                                                                                   | Gain on sales of securities available-for-sale |                                           |                                           |          |             |           |             | (71,237   | )          
|                                                   |                                                                                   | Increase in interest receivable                |                                           |                                           | (115,126  | )           |           |             | (68,889   | )          
|                                                   |                                                                                   | Increase in interest payable                   |                                           |                                           | 111,100   |             |           |             | 146,099   |            
|                                                   |                                                                                   | Increase (decrease) in income taxes payable    |                                           |                                           | 335,112   |             |           |             | (38,105   | )          
|                                                   |                                                                                   | Net other operating activities                 |                                           |                                           | 18,612    |             |           |             | 159,151   |            
|                                                   |                                                                                   |                                                |                                           |                                           |           |             |           |            
|                                                   |                                                                                   |                                                |                                           | Net cash provided by operating activities |           |             | 1,301,681 |             |           |             | 680,103 | 
|                                                   |                                                                                   |                                                |                                           |                                           |           |             |           |            
|INVESTING ACTIVITIES                               |                                                                                   |                                                |                                           |                                           |           |             |           |            
|                                                   | Increase in interest-bearing deposits in banks                                    |                                                |                                           | (1,090,252                                | )         |             |           |            |          
|                                                   | Purchases of securities available-for-sale                                        |                                                |                                           | (6,957,289                                | )         |             |           | (4,593,691  | )        
|                                                   | Proceeds from sale of securities available-for-sale                               |                                                |                                           |                                          |           |             |           | 1,354,263   |          
|                                                   | Proceeds from maturities of securities available-for-sale                         |                                                |                                           | 3,259,740                                 |           |             |           | 1,943,964   |          
|                                                   | Purchase of Federal Reserve Bank stock                                            |                                                |                                           |                                          |           |             |           | (245,400    | )        
|                                                   | Purchase of Federal Home Loan Bank stock                                          |                                                |                                           | (37,600                                   | )         |             |           | (40,700     | )        
|                                                   | Net decrease in federal funds sold                                                |                                                |                                           | 2,079,000                                 |           |             |           | 4,641,000   |          
|                                                   | Net increase in loans                                                             |                                                |                                           | (23,325,049                               | )         |             |           | (30,636,790 | )        
|                                                   | Purchase of premises and equipment                                                |                                                |                                           | (366,241                                  | )         |             |           | (1,977,403  | )        
|                                                   |                                                                                   |                                                |                                           |                                           |           |             |           |            
|                                                   |                                                                                   |                                                | Net cash used in investing activities     |                                           |           | (26,437,691 | )         |             |           | (29,554,757 | )      
|                                                   |                                                                                   |                                                |                                           |                                           |           |             |           |            
|FINANCING ACTIVITIES                               |                                                                                   |                                                |                                           |                                           |           |             |           |            
|                                                   | Net increase in deposits                                                          |                                                |                                           | 23,684,213                                |           |             |           | 31,207,124  |          
|                                                   | Net increase in federal funds purchased                                           |                                                |                                           | 397,000                                   |           |             |           |            |          
|                                                   | Proceeds from (repayment of) other borrowings                                     |                                                |                                           | (35,000                                   | )         |             |           | 35,000      |          
|                                                   |                                                                                   |                                                |                                           |                                           |           |             |           |            
|                                                   |                                                                                   |                                                | Net cash provided by financing activities |                                           |           | 24,046,213  |           |             |           | 31,242,124  |        
|                                                   |                                                                                   |                                                |                                           |                                           |           |             |           |            
|Net increase (decrease) in cash and due from banks |                                                                                   |                                                | (1,089,797                                | )                                         |           |             | 2,367,470 |            
|Cash and due from banks at beginning of year       |                                                                                   |                                                | 3,053,845                                 |                                           |           |             | 686,375   |            
|                                                   |                                                                                   |                                                |                                           |                                           |           |             |           |            
|Cash and due from banks at end of year             |                                                                                   | $                                              | 1,964,048                                 |                                           |           | $           | 3,053,845 |            
|                                                   |                                                                                   |                                                |                                           |                                           |           |             |           |            
|SUPPLEMENTAL DISCLOSURE                            |                                                                                   |                                                |                                           |                                           |           |             |           |            
|                                                   | Cash paid (received) during the year for:                                         |                                                |                                           |                                           |           |             |           |             |          
|                                                   |                                                                                   | Interest                                       |                                           | $                                         | 1,730,438 |             |           | $           | 1,395,102 |            
|                                                   |                                                                                   | Income taxes                                   |                                           | $                                         | (5,705    | )           |           | $           | 70,200    |            

See Notes to Consolidated Financial Statements.

F-6



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NEWNAN COWETA BANCSHARES, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NOTE 1. |  | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        |  | Nature of Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        |  | Newnan Coweta Bancshares, Inc. (the Company) is a bank holding
company whose business is conducted by its wholly-owned subsidiary,
Newnan Coweta Bank (the Bank). The Bank is a commercial bank
located in Newnan, Coweta County, Georgia. The Bank provides a
full range of banking services in its primary market area of Coweta
County and the surrounding counties. The Bank is a state-chartered
member of the Federal Reserve System.                                                                                                                                                                                                             
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        |  | Basis of Presentation and Accounting Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        |  | The consolidated financial statements include the accounts of the
Company and its subsidiary. Significant intercompany transactions
and balances have been eliminated in consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        |  | In preparing financial statements in conformity with accounting
principles generally accepted in the United States of America,
management is required to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities as of the balance
sheet date and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those
estimates. Material estimates that are particularly susceptible to
significant change in the near term relate to the determination of
the allowance for loan losses and deferred income taxes.
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        |  | Cash, Due From Banks and Cash Flows                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        |  | For purposes of reporting cash flows, cash and due from banks
includes cash on hand, cash items in process of collection and
amounts due from banks. Cash flows from loans, federal funds sold,
deposits, federal funds purchased, and other borrowings are
reported net.                                                                                                                                                                                                                                                                                                                                                                                   
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        |  | The Bank is required to maintain reserve balances in cash or on
deposit with the Federal Reserve Bank, based on a percentage of
deposits. The total of those reserve balances was approximately
$343,000 at December 31, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                              
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        |  | Securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        |  | All debt securities are classified as available-for-sale and
recorded at fair value with unrealized gains and losses excluded
from earnings and reported in other comprehensive income, net of
the related deferred tax effect. Restricted equity securities,
which consists of Federal Reserve Bank and Federal Home Loan Bank
stock, without a readily determinable fair value are included in
other assets and reported at cost.                                                                                                                                                                                                                         
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        |  | Purchase premiums and discounts are recognized in interest income
using the interest method over the terms of the securities. Gains
and losses on the sale of securities are                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

F-7



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##### Table of Contents





| |  | determined using the specific identification method. Declines in
the fair value of securities below their cost that are deemed to be
other than temporary are reflected in earnings as realized losses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | Loans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  | Loans are reported at their outstanding principal balances less
deferred fees and the allowance for loan losses. Interest income
is accrued on the unpaid principal balance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | Nonrefundable loan fees, net of direct loan origination costs, are
deferred with the net amount recognized into interest income over
the life of the loans using a method that approximates a level
yield.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | The accrual of interest on loans is discontinued when, in
managements opinion, the borrower may be unable to meet payments
as they become due, unless the loan is well-secured. All interest
accrued but not collected for loans that are placed on nonaccrual
or charged off is reversed against interest income. Interest
income on nonaccrual loans is subsequently recognized only to the
extent cash payments are received, until the loans are returned to
accrual status.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | The allowance for loan losses is established through a provision
for loan losses charged to expense. Loan losses are charged
against the allowance when management believes the collectibility
of the principal is unlikely. Subsequent recoveries are credited
to the allowance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | The allowance is an amount that management believes will be
adequate to absorb estimated losses in the loan portfolio. The
allowance for loan losses is evaluated on a regular basis by
management and is based upon managements periodic review of the
collectibility of the loans in light of historical experience, the
nature and volume of the loan portfolio, adverse situations that
may affect the borrowers ability to repay, estimated value of any
underlying collateral and prevailing economic conditions. This
evaluation is inherently subjective as it requires estimates that
are susceptible to significant revision as more information becomes
available. While management uses the best information available to
make its evaluation, future adjustments to the allowance may be
necessary if there are significant changes in economic conditions.
In addition, regulatory agencies, as an integral part of their
examination process, periodically review the Banks allowance for
loan losses, and may require the Company to make additions to the
allowance based on their judgment about information available to
them at the time of their examinations.
|
| |  | A loan is considered impaired when it is probable the Company will
be unable to collect all principal and interest payments due in
accordance with the contractual terms of the loan agreement.
Impaired loans are measured by either the present value of expected
future cash flows discounted at the loans effective interest rate,
the loans obtainable market price, or the fair value of the
collateral if the loan is collateral dependent. The amount of
impairment, if any, and any subsequent changes are included in the
allowance for loan losses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

F-8



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|        |  |                                                                                                                                                                                                                                                                                                                                                                             
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NOTE 1. |  | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)                                                                                                                                                                                                                                                                                                                      
|        |  |                                                                                                                                                                                                                                                                                                                                                                             
|        |  | Premises and Equipment                                                                                                                                                                                                                                                                                                                                                      
|        |  |                                                                                                                                                                                                                                                                                                                                                                             
|        |  | Land is carried at cost. Premises and equipment are carried at
cost less accumulated depreciation. Depreciation is computed
principally on the straight-line method over the estimated useful
lives of the assets.                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                                             
|        |  | Income Taxes                                                                                                                                                                                                                                                                                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                                                                             
|        |  | Deferred income tax assets and liabilities are determined using the
balance sheet method. Under this method, the net deferred tax
asset or liability is determined based on the tax effects of the
temporary differences between the book and tax bases of the various
balance sheet assets and liabilities and gives current recognition
to changes in tax rates and laws. 
|        |  |                                                                                                                                                                                                                                                                                                                                                                             
|        |  | Earnings Per Share                                                                                                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                                             
|        |  | Basic earnings per share are computed by dividing net income by the
weighted average number of shares of common stock outstanding.
Diluted earnings per share are computed by dividing net income by
the sum of the weighted average number of shares of common stock
outstanding and potential common shares. Potential common shares
consist of stock options and warrants

F-9



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NOTE 1. |  | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        |  | Stock Compensation Plans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        |  | At December 31, 2002, the Company has two stock-based compensation
plans, which are described more fully in Note 7. The Company
accounts for those plans under the recognition and measurement
principles of APB Opinion No. 25, Accounting for Stock Issued to
Employees, and related Interpretations. No stock-based
compensation cost is reflected in net income, as all options and
warrants granted under those plans had an exercise price equal to
the market value of the underlying stock on the date of grant. The
following table illustrates the effect on net income and earnings
per share if the Company had applied the fair value recognition
provisions of SFAS Statement No. 123, Accounting for Stock-Based
Compensation, to stock-based compensation.

|                                                                                                                                   |                       |   |                          |      |      |   |         |      |  
|---------------------------------------------------------------------------------------------------------------------------------- | --------------------- | - | ------------------------ | ---- | ---- | - | ------- | ---- | -
|                                                                                                                                   |                       |   | Years Ended December 31,
|                                                                                                                                   |                       |   |                         
|                                                                                                                                   |                       |   | 2002                     |      | 2001
|                                                                                                                                   |                       |   |                          |      |     
|Net income, as reported                                                                                                            |                       | $ | 694,803                  |      |      | $ | 58,664  |     
|Deduct: Total stock-based compensation
expense determined under fair value based
method for all awards, net of related tax effects |                       |   | 57,893                   |      |      |   | 93,376  |     
|                                                                                                                                   |                       |   |                          |      |      |   |         |     
|Pro forma net income (loss)                                                                                                        |                       | $ | 636,910                  |      |      | $ | (34,712 | )   
|                                                                                                                                   |                       |   |                          |      |      |   |         |     
|Earnings (losses) per share:                                                                                                       |                       |   |                          |      |      |   |         |     
|                                                                                                                                   | Basic  as reported   |   | $                        | 0.77 |      |   | $       | .07  |  
|                                                                                                                                   |                       |   |                          |      |      |   |         |     
|                                                                                                                                   | Basic  pro forma     |   | $                        | 0.71 |      |   | $       | (.04 | )
|                                                                                                                                   |                       |   |                          |      |      |   |         |     
|                                                                                                                                   | Diluted  as reported |   | $                        | 0.76 |      |   | $       | .07  |  
|                                                                                                                                   |                       |   |                          |      |      |   |         |     
|                                                                                                                                   | Diluted  pro forma   |   | $                        | 0.69 |      |   | $       | (.04 | )
|                                                                                                                                   |                       |   |                          |      |      |   |         |     



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

F-10



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NOTE 1. |  | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        |  | Recent Accounting Standards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        |  | In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation-Transition and Disclosure. SFAS No. 148
amends SFAS No. 123, Accounting for Stock-Based Compensation, to
provide alternative methods of transition for an entity that
voluntarily changes to the fair value based method of accounting
for stock-based compensation. It also amends the disclosure
provisions of SFAS No. 123 to require prominent disclosure about
the effects on reported net income of an entitys accounting policy
decisions with respect to stock-based compensation. The Company
has not elected to adopt the recognition provisions of this
Statement for stock-based compensation and has elected to continue
with accounting methodology in Opinion No. 25 as permitted by SFAS
No. 123.
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|NOTE 2. |  | SECURITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        |  | The amortized cost and fair value of securities are summarized as
follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

|                                      |  |           |           |            |  |            |         |       |  |   |   |  |  |   |           | 
|------------------------------------- |  | --------- | --------- | ---------- |  | ---------- | ------- | ----- |  | - | - |  |  | - | --------- | 
|                                      |  |           |           |            |  | Gross      |         | Gross |  |   |   | 
|                                      |  | Amortized |           | Unrealized |  | Unrealized |         | Fair 
|                                      |  | Cost      |           | Gains      |  | Losses     |         | Value
|                                      |  |           |           |            |  |            |         |      
|Securities
Available-for-Sale         |  |           |           |            |  |            |         |       |  |   |   |  |  |   |           | 
|December 31,
2002:                    |  |           |           |            |  |            |         |       |  |   |   |  |  |   |           | 
|U.S. Government and
agency securities |  | $         | 6,899,298 |            |  | $          | 107,138 |       |  | $ |  |  |  | $ | 7,006,436 | 
|Mortgage-backed securities            |  |           | 2,483,119 |            |  |            | 72,501  |       |  |   |  |  |  |   | 2,555,620 | 
|                                      |  |           |           |            |  |            |         |       |  |   |   |  |  |   |           | 
|                                      |  | $         | 9,382,417 |            |  | $          | 179,639 |       |  | $ |  |  |  | $ | 9,562,056 | 
|                                      |  |           |           |            |  |            |         |       |  |   |   |  |  |   |           | 
|December 31, 2001:                    |  |           |           |            |  |            |         |       |  |   |   |  |  |   |           | 
|U.S. Government and
agency securities |  | $         | 497,827   |            |  | $          | 8,423   |       |  | $ |  |  |  | $ | 506,250   | 
|Mortgage-backed securities            |  |           | 5,187,041 |            |  |            | 135,107 |       |  |   |  |  |  |   | 5,322,148 | 
|                                      |  |           |           |            |  |            |         |       |  |   |   |  |  |   |           | 
|                                      |  | $         | 5,684,868 |            |  | $          | 143,530 |       |  | $ |  |  |  | $ | 5,828,398 | 
|                                      |  |           |           |            |  |            |         |       |  |   |   |  |  |   |           | 



| |  | Securities with a carrying value of approximately $5,212,000 and
$3,227,000 at December 31, 2002 and 2001, respectively, were pledged
to secure public deposits and for other purposes as required or
permitted by law.                                                                                                                                                                                 
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The amortized cost and fair value of debt securities as of December
31, 2002 by contractual maturity are shown below. Maturities may
differ from contractual maturities in mortgage-backed securities
because the mortgages underlying the securities may be called or
repaid with or without penalty. Therefore, these securities are not
included in the maturity categories in the following summary.

|                           |  |                               |           |       |  |   |           | 
|-------------------------- |  | ----------------------------- | --------- | ----- |  | - | --------- | 
|                           |  | Securities Available-for-Sale
|                           |  |                              
|                           |  | Amortized                     |           | Fair 
|                           |  | Cost                          |           | Value
|                           |  |                               |           |      
|Due in one year or less    |  | $                             | 2,007,532 |       |  | $ | 2,023,120 | 
|Due from one to five years |  |                               | 4,891,766 |       |  |   | 4,983,316 | 
|Mortgage-backed securities |  |                               | 2,483,119 |       |  |   | 2,555,620 | 
|                           |  |                               |           |       |  |   |           | 
|                           |  | $                             | 9,382,417 |       |  | $ | 9,562,056 | 
|                           |  |                               |           |       |  |   |           | 



| |  | Gross gains on the sales of securities available-for-sale were
$71,237 for the year ended December 31, 2001. There were no sales
of securities during the year ended December 31, 2002.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|        |  |                                                   
|------- |  | --------------------------------------------------
|NOTE 3. |  | LOANS                                             
|        |  |                                                   
|        |  | The composition of loans is summarized as follows:

|                               |  |              |            |      |  |   |            |  
|------------------------------ |  | ------------ | ---------- | ---- |  | - | ---------- | -
|                               |  | December 31,
|                               |  |             
|                               |  | 2002         |            | 2001
|                               |  |              |            |     
|Commercial                     |  | $            | 9,050,749  |      |  | $ | 6,206,103  |  
|Real estate  construction     |  |              | 17,572,598 |      |  |   | 12,431,851 |  
|Real estate  mortgage         |  |              | 41,163,935 |      |  |   | 26,891,362 |  
|Consumer installment and other |  |              | 2,883,742  |      |  |   | 1,860,037  |  
|                               |  |              |            |      |  |   |            |  
|                               |  |              | 70,671,024 |      |  |   | 47,389,353 |  
|Deferred loan fees             |  |              | (85,999    | )    |  |   | (59,694    | )
|Allowance for loan losses      |  |              | (853,917   | )    |  |   | (612,330   | )
|                               |  |              |            |      |  |   |            |  
|Loans, net                     |  | $            | 69,731,108 |      |  | $ | 46,717,329 |  
|                               |  |              |            |      |  |   |            |  



| |  | Changes in the allowance for loan losses are as follows:
| |  | --------------------------------------------------------

|                           |                                            |   |                          |         |      |   |         |         |  
|-------------------------- | ------------------------------------------ | - | ------------------------ | ------- | ---- | - | ------- | ------- | -
|                           |                                            |   | Years Ended December 31,
|                           |                                            |   |                         
|                           |                                            |   | 2002                     |         | 2001
|                           |                                            |   |                          |         |     
|Balance, beginning of year |                                            | $ | 612,330                  |         |      | $ | 180,000 |        
|                           | Provision for loan losses                  |   |                          | 311,270 |      |   |         | 435,020 |  
|                           | Loans charged off                          |   |                          | (93,788 | )    |   |         | (2,690  | )
|                           | Recoveries of loans previously charged off |   |                          | 24,105  |      |   |         |        |  
|                           |                                            |   |                          |         |      |   |         |        
|Balance, end of year       |                                            | $ | 853,917                  |         |      | $ | 612,330 |        
|                           |                                            |   |                          |         |      |   |         |        



| |  | Impaired loans, consisting solely of loans on nonaccrual status,
amounted to $20,416 at December 31, 2001. There were no impaired
loans as of December 31, 2002. In addition, there were no loans
past due ninety days or more and still accruing interest at December
31, 2002 and 2001.                                                                                                                                
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | In the ordinary course of business, the Company has granted loans to
certain related parties, including directors, executive officers,
and their affiliates. The interest rates on these loans were
substantially the same as rates prevailing at the time of the
transaction and repayment terms are customary for the type of loan.
Changes in related party loans for the year ended December 31, 2002
are as follows:

|                           |            |   |           |           |  
|-------------------------- | ---------- | - | --------- | --------- | -
|Balance, beginning of year |            | $ | 2,717,766 |          
|                           | Advances   |   |           | 1,860,072 |  
|                           | Repayments |   |           | (697,101  | )
|                           |            |   |           |          
|Balance, end of year       |            | $ | 3,880,737 |          
|                           |            |   |           |          

F-12



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|        |  |                                                 
|------- |  | ------------------------------------------------
|NOTE 4. |  | PREMISES AND EQUIPMENT                          
|        |  |                                                 
|        |  | Premises and equipment is summarized as follows:

|                                                              |  |              |           |      |  |   |           |  
|------------------------------------------------------------- |  | ------------ | --------- | ---- |  | - | --------- | -
|                                                              |  | December 31,
|                                                              |  |             
|                                                              |  | 2002         |           | 2001
|                                                              |  |              |           |     
|Land and improvements                                         |  | $            | 449,791   |      |  | $ | 445,599   |  
|Buildings                                                     |  |              | 1,845,715 |      |  |   | 1,822,009 |  
|Construction in process, estimated costs
to complete $323,000 |  |              | 96,192    |      |  |   | 6,573     |  
|Furniture and equipment                                       |  |              | 577,422   |      |  |   | 489,191   |  
|                                                              |  |              |           |      |  |   |           |  
|                                                              |  |              | 2,969,120 |      |  |   | 2,763,372 |  
|Accumulated depreciation                                      |  |              | (297,326  | )    |  |   | (133,223  | )
|                                                              |  |              |           |      |  |   |           |  
|                                                              |  | $            | 2,671,794 |      |  | $ | 2,630,149 |  
|                                                              |  |              |           |      |  |   |           |  

|        |  |                                                                                                                                                                                                                                       
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NOTE 5. |  | DEPOSITS                                                                                                                                                                                                                              
|        |  |                                                                                                                                                                                                                                       
|        |  | The aggregate amount of time deposits in denominations of $100,000
or more at December 31, 2002 and 2001 was $22,596,751 and
$13,742,139, respectively. The scheduled maturities of time
deposits at December 31, 2002 are as follows:

|     |  |   |            | 
|---- |  | - | ---------- | 
|2003 |  | $ | 42,780,613 | 
|2004 |  |   | 6,884,240  | 
|2005 |  |   | 294,023    | 
|2006 |  |   | 440,413    | 
|2007 |  |   | 1,622,503  | 
|     |  |   |            | 
|     |  | $ | 52,021,792 | 
|     |  |   |            | 

|        |  |                                           
|------- |  | ------------------------------------------
|NOTE 6. |  | OTHER BORROWINGS                          
|        |  |                                           
|        |  | Other borrowings consist of the following:

|                                                                                                                                                                                           |  |              |   |      |  |   |        | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------ | - | ---- |  | - | ------ | 
|                                                                                                                                                                                           |  | December 31,
|                                                                                                                                                                                           |  |             
|                                                                                                                                                                                           |  | 2002         |   | 2001
|                                                                                                                                                                                           |  |              |   |     
|Advance from a commercial bank with interest payable
at the prime rate less .50%, or 4.25% at December 31, 2001
The advance was secured by Bank stock and
was paid off on December 3, 2002 |  | $            |  |      |  | $ | 35,000 | 
|                                                                                                                                                                                           |  |              |   |      |  |   |        | 

F-13



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                   
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NOTE 7. |  | EMPLOYEE AND DIRECTOR BENEFITS                                                                                                                                                                                                                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                   
|        |  | Stock Options                                                                                                                                                                                                                                                                                                                                                                                                     
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                   
|        |  | The Company adopted a stock option plan during 2001 which grants
key employees options to purchase shares of common stock of the
Company. Option prices and terms are determined by a committee
appointed by the Board of Directors. The plan provides for a total
of 150,000 options to purchase common shares of the Company. As of
December 31, 2002 and 2001, 45,000 options under the plan have been
granted.
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                   
|        |  | Other pertinent information related to the options for the year
ended December 31, 2002 is as follows:                                                                                                                                                                                                                                                                                                            

|                                                               |           |  |                          |   |       |   |           |   |       |  |        |        |           |   |       |       | 
|-------------------------------------------------------------- | --------- |  | ------------------------ | - | ----- | - | --------- | - | ----- |  | ------ | ------ | --------- | - | ----- | ----- | 
|                                                               |           |  | Years Ended December 31,
|                                                               |           |  |                         
|                                                               |           |  | 2002                     |   | 2001 
|                                                               |           |  |                          |   |      
|                                                               |           |  |                          |   |       |   | Weighted- |   |       |  |        |        | Weighted-
|                                                               |           |  |                          |   |       |   | Average   |   |       |  |        |        | Average  
|                                                               |           |  |                          |   |       |   | Exercise  |   |       |  |        |        | Exercise 
|                                                               |           |  | Number                   |   | Price |   | Number    |   | Price
|                                                               |           |  |                          |   |       |   |           |   |      
|Options outstanding, beginning of year                         |           |  | 45,000                   |   |       | $ | 10.00     |   |       |  |       |        |           | $ |      |      
|                                                               | Granted   |  |                          |  |       |   |           |  |       |  |        | 45,000 |           |   |       | 10.00 | 
|                                                               | Exercised |  |                          |  |       |   |           |  |       |  |        |       |           |   |       |      | 
|                                                               |           |  |                          |   |       |   |           |   |       |  |        |        |           |   |       |      
|Options outstanding, end of year                               |           |  | 45,000                   |   |       |   | 10.00     |   |       |  | 45,000 |        |           |   | 10.00 |      
|                                                               |           |  |                          |   |       |   |           |   |       |  |        |        |           |   |       |      
|Exercisable, end of year                                       |           |  | 18,000                   |   |       |   | 10.00     |   |       |  | 9,000  |        |           |   | 10.00 |      
|                                                               |           |  |                          |   |       |   |           |   |       |  |        |        |           |   |       |      
|Weighted-average fair value of options
granted during the year |           |  |                          |   |       | $ |          |   |       |  |        |        |           | $ | 4.23  |      

|                         |  |        |        |       |  |               |       |             |  |           |  | 
|------------------------ |  | ------ | ------ | ----- |  | ------------- | ----- | ----------- |  | --------- |  | 
|                         |  |        |        |       |  |               |       |             |  | Weighted-
|                         |  |        |        |       |  | Weighted-     |       | Average    
|                         |  |        |        |       |  | Average       |       | Remaining  
|                         |  |        |        |       |  | Exercise      |       | Contractual
|                         |  | Number |        | Price |  | Life in Years
|                         |  |        |        |       |  |              
|Outstanding, end of year |  |        | 45,000 |       |  | $             | 10.00 |             |  | 8.5 years
|                         |  |        |        |       |  |               |       |             |  |           |  | 
|Exercisable, end of year |  |        | 18,000 |       |  |               | 10.00 |             |  | 8.5 years
|                         |  |        |        |       |  |               |       |             |  |           |  | 



| |  | Stock Warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | In recognition of the efforts and financial risks undertaken by the
Companys organizers, the Company granted each organizer an
opportunity to purchase a number of shares of the Companys common
stock. The warrants vest over a three year period from the date
the Bank was incorporated and are exercisable in whole or in part
during the ten year period following the incorporation date, at an exercise price equal
to $10 per share. The warrants are nontransferable, but shares
issued pursuant to the exercise of warrants will be transferable,
subject to compliance with applicable securities laws. The Banks
incorporation date was December 21, 1999. At December 31, 2002 and
2001, there were 40,000 warrants outstanding.

F-14



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|        |  |                                                                   
|------- |  | ------------------------------------------------------------------
|NOTE 7. |  | EMPLOYEE AND DIRECTOR BENEFITS (Continued)                        
|        |  |                                                                   
|        |  | Stock Warrants (Continued)                                        
|        |  |                                                                   
|        |  | Other pertinent information related to the warrants is as follows:

|                                        |           |  |                          |   |       |   |           |   |       |  |        |   |           |   |       |   | 
|--------------------------------------- | --------- |  | ------------------------ | - | ----- | - | --------- | - | ----- |  | ------ | - | --------- | - | ----- | - | 
|                                        |           |  | Years Ended December 31,
|                                        |           |  |                         
|                                        |           |  | 2002                     |   | 2001 
|                                        |           |  |                          |   |      
|                                        |           |  |                          |   |       |   | Weighted- |   |       |  |        |   | Weighted-
|                                        |           |  |                          |   |       |   | Average   |   |       |  |        |   | Average  
|                                        |           |  |                          |   |       |   | Exercise  |   |       |  |        |   | Exercise 
|                                        |           |  | Number                   |   | Price |   | Number    |   | Price
|                                        |           |  |                          |   |       |   |           |   |      
|Warrants outstanding, beginning of year |           |  | 40,000                   |   |       | $ | 10.00     |   |       |  | 40,000 |   |           | $ | 10.00 |  
|                                        | Granted   |  |                          |  |       |   |           |  |       |  |        |  |           |   |       |  | 
|                                        | Exercised |  |                          |  |       |   |           |  |       |  |        |  |           |   |       |  | 
|                                        |           |  |                          |   |       |   |           |   |       |  |        |   |           |   |       |  
|Warrants outstanding, end of year       |           |  | 40,000                   |   |       |   | 10.00     |   |       |  | 40,000 |   |           |   | 10.00 |  
|                                        |           |  |                          |   |       |   |           |   |       |  |        |   |           |   |       |  
|Exercisable, end of year                |           |  | 40,000                   |   |       |   | 10.00     |   |       |  | 26,667 |   |           |   | 10.00 |  
|                                        |           |  |                          |   |       |   |           |   |       |  |        |   |           |   |       |  

|                                         |  |        |        |       |  |               |       |             |  |           |  | 
|---------------------------------------- |  | ------ | ------ | ----- |  | ------------- | ----- | ----------- |  | --------- |  | 
|                                         |  |        |        |       |  |               |       |             |  | Weighted-
|                                         |  |        |        |       |  | Weighted-     |       | Average    
|                                         |  |        |        |       |  | Average       |       | Remaining  
|                                         |  |        |        |       |  | Exercise      |       | Contractual
|                                         |  | Number |        | Price |  | Life in Years
|                                         |  |        |        |       |  |              
|Outstanding and exercisable, end of year |  |        | 40,000 |       |  | $             | 10.00 |             |  | 7 years  
|                                         |  |        |        |       |  |               |       |             |  |           |  | 



| |  | The fair value of each option grant is estimated on the date of
grant using the Black-Scholes option-pricing model with the
following weighted-average assumptions:
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                        |  |                          |     |      |  |          |      |  
|----------------------- |  | ------------------------ | --- | ---- |  | -------- | ---- | -
|                        |  | Years Ended December 31,
|                        |  |                         
|                        |  | 2002                     |     | 2001
|                        |  |                          |     |     
|Dividend yield          |  |                          | N/A |      |  |          | 0    | %
|Expected life           |  |                          | N/A |      |  | 10 years
|Expected volatility     |  |                          | N/A |      |  |          | 0.01 | %
|Risk-free interest rate |  |                          | N/A |      |  |          | 5.59 | %

F-15



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|        |  |                                                                                                                                                                                                                                         
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NOTE 7. |  | EMPLOYEE AND DIRECTOR BENEFITS (Continued)                                                                                                                                                                                              
|        |  |                                                                                                                                                                                                                                         
|        |  | 401(k) Profit Sharing Plan                                                                                                                                                                                                              
|        |  |                                                                                                                                                                                                                                         
|        |  | The Company has a 401(k) Profit Sharing Plan available to all
eligible employees, subject to certain minimum age and service
requirements. There were no contributions charged to expense for
the years ended December 31, 2002 or 2001.
|        |  |                                                                                                                                                                                                                                         
|NOTE 8. |  | INCOME TAXES                                                                                                                                                                                                                            
|        |  |                                                                                                                                                                                                                                         
|        |  | Income tax expense consists of the following:                                                                                                                                                                                           

|                              |                    |   |                          |         |      |   |         |   | 
|----------------------------- | ------------------ | - | ------------------------ | ------- | ---- | - | ------- | - | 
|                              |                    |   | Years Ended December 31,
|                              |                    |   |                         
|                              |                    |   | 2002                     |         | 2001
|                              |                    |   |                          |         |     
|Current                       |                    | $ | 329,407                  |         |      | $ | 98,080  |  
|Deferred                      |                    |   | (5,028                   | )       |      |   | (91,716 | )
|Change in valuation allowance |                    |   | (199,143                 | )       |      |   | (6,364  | )
|                              |                    |   |                          |         |      |   |         |  
|                              | Income tax expense |   | $                        | 125,236 |      |   | $       |  | 
|                              |                    |   |                          |         |      |   |         |  



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

|                                |                                   |   |                          |          |      |   |        |         |  
|------------------------------- | --------------------------------- | - | ------------------------ | -------- | ---- | - | ------ | ------- | -
|                                |                                   |   | Years Ended December 31,
|                                |                                   |   |                         
|                                |                                   |   | 2002                     |          | 2001
|                                |                                   |   |                          |          |     
|Tax provision at statutory rate |                                   | $ | 278,813                  |          |      | $ | 19,946 |        
|                                | State tax (benefit)               |   |                          | 34,609   |      |   |        | (2,548  | )
|                                | Benefit due to graduated brackets |   |                          |         |      |   |        | (10,487 | )
|                                | Other items                       |   |                          | 10,957   |      |   |        | (547    | )
|                                | Change in valuation allowance     |   |                          | (199,143 | )    |   |        | (6,364  | )
|                                |                                   |   |                          |          |      |   |        |        
|Income tax expense              |                                   | $ | 125,236                  |          |      | $ |       |        
|                                |                                   |   |                          |          |      |   |        |        

F-16



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|        |  |                                                        
|------- |  | -------------------------------------------------------
|NOTE 8. |  | INCOME TAXES (Continued)                               
|        |  |                                                        
|        |  | The components of deferred income taxes are as follows:

|                          |                                      |   |              |         |      |   |          |         | 
|------------------------- | ------------------------------------ | - | ------------ | ------- | ---- | - | -------- | ------- | 
|                          |                                      |   | December 31,
|                          |                                      |   |             
|                          |                                      |   | 2002         |         | 2001
|                          |                                      |   |              |         |     
|Deferred tax assets:      |                                      |   |              |         |      |   |          |        
|                          | Loan loss reserves                   |   | $            | 224,204 |      |   | $        | 131,119 | 
|                          | Preopening and organization expenses |   |              | 76,475  |      |   |          | 119,553 | 
|                          |                                      |   |              |         |      |   |          |        
|                          |                                      |   | 300,679      |         |      |   | 250,672  |        
|Valuation allowance       |                                      |   |             |         |      |   | (144,602 | )      
|                          |                                      |   |              |         |      |   |          |        
|                          |                                      |   | 300,679      |         |      |   | 106,070  |        
|                          |                                      |   |              |         |      |   |          |        
|Deferred tax liabilities: |                                      |   |              |         |      |   |          |        
|                          | Depreciation                         |   |              | 64,413  |      |   |          | 19,434  | 
|                          | Securities available-for-sale        |   |              | 68,263  |      |   |          | 54,541  | 
|                          |                                      |   |              |         |      |   |          |        
|                          |                                      |   | 132,676      |         |      |   | 73,975   |        
|                          |                                      |   |              |         |      |   |          |        
|Net deferred tax assets   |                                      | $ | 168,003      |         |      | $ | 32,095   |        
|                          |                                      |   |              |         |      |   |          |        

|        |  |                                                                                                       
|------- |  | ------------------------------------------------------------------------------------------------------
|NOTE 9. |  | EARNINGS PER SHARE                                                                                    
|        |  |                                                                                                       
|        |  | Presented below is a summary of the components used to calculate
basic and diluted earnings per share.

|                            |                                                                                                                                 |   |                          |         |      |   |        |         | 
|--------------------------- | ------------------------------------------------------------------------------------------------------------------------------- | - | ------------------------ | ------- | ---- | - | ------ | ------- | 
|                            |                                                                                                                                 |   | Years Ended December 31,
|                            |                                                                                                                                 |   |                         
|                            |                                                                                                                                 |   | 2002                     |         | 2001
|                            |                                                                                                                                 |   |                          |         |     
|Basic Earnings Per Share:   |                                                                                                                                 |   |                          |         |      |   |        |        
|                            | Weighted average common shares outstanding                                                                                      |   |                          | 900,000 |      |   |        | 900,000 | 
|                            |                                                                                                                                 |   |                          |         |      |   |        |        
|Net income                  |                                                                                                                                 | $ | 694,803                  |         |      | $ | 58,664 |        
|                            |                                                                                                                                 |   |                          |         |      |   |        |        
|Basic earnings per share    |                                                                                                                                 | $ | 0.77                     |         |      | $ | 0.07   |        
|                            |                                                                                                                                 |   |                          |         |      |   |        |        
|Diluted Earnings Per Share: |                                                                                                                                 |   |                          |         |      |   |        |        
|                            | Weighted average common shares outstanding                                                                                      |   |                          | 900,000 |      |   |        | 900,000 | 
|                            | Net effect of the assumed exercise of stock
options based on the treasury stock method
using average market prices for the year |   |                          | 17,000  |      |   |        |        | 
|                            |                                                                                                                                 |   |                          |         |      |   |        |        
|                            | Total weighted average common shares and
potential common shares outstanding                                                    |   |                          | 917,000 |      |   |        | 900,000 | 
|                            |                                                                                                                                 |   |                          |         |      |   |        |        
|Net income                  |                                                                                                                                 | $ | 694,803                  |         |      | $ | 58,664 |        
|                            |                                                                                                                                 |   |                          |         |      |   |        |        
|Diluted earnings per share  |                                                                                                                                 | $ | 0.76                     |         |      | $ | 0.07   |        
|                            |                                                                                                                                 |   |                          |         |      |   |        |        

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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NOTE 10. |  | COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                                                                                                                                                                                                                                                   
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|         |  | Loan Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|         |  | The Company is a party to financial instruments with off-balance
sheet risk in the normal course of business to meet the financing
needs of its customers. These financial instruments may include
commitments to extend credit and standby letters of credit. Such
commitments involve, to varying degrees, elements of credit risk
and interest rate risk in excess of the amount recognized in the
balance sheets.                           
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|         |  | The Companys exposure to credit loss in the event of
nonperformance by the other party to the financial instrument for
commitments to extend credit and standby letters of credit is
represented by the contractual amount of those instruments. The
Company uses the same credit policies in making commitments and
conditional obligations as it does for on-balance sheet
instruments. A summary of the Companys commitments is as follows:

|                             |  |              |           |      |  |   |           | 
|---------------------------- |  | ------------ | --------- | ---- |  | - | --------- | 
|                             |  | December 31,
|                             |  |             
|                             |  | 2002         |           | 2001
|                             |  |              |           |     
|Letters of credit            |  | $            | 18,200    |      |  | $ |          | 
|Commitments to extend credit |  |              | 8,923,000 |      |  |   | 9,231,000 | 
|                             |  |              |           |      |  |   |           | 
|                             |  | $            | 8,941,200 |      |  | $ | 9,231,000 | 
|                             |  |              |           |      |  |   |           | 

|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |  | Commitments to extend credit are agreements to lend to a customer
as long as there is no violation of any condition established in
the contract. Since many of the commitments are expected to expire
without being drawn upon, the total commitment amounts do not
necessarily represent future cash requirements.                                                                                                                                                                                                                               
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|         |  | Standby letters of credit are conditional commitments issued by the
Company to guarantee the performance of a customer to a third
party. Those letters of credit are primarily issued to support
public and private borrowing arrangements. The credit risk
involved in issuing letters of credit is essentially the same as
that involved in extending loans to customers. Collateral is
required in instances which the Company deemed necessary.                                                                                               
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|         |  | Contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|         |  | In the normal course of business, the Company is involved in
various legal proceedings. In the opinion of management, any
liability resulting from such proceedings would not have a material
effect on the Companys financial statements.                                                                                                                                                                                                                                                                                                       
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|NOTE 11. |  | CONCENTRATIONS OF CREDIT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|         |  | The Company originates primarily commercial, residential, and
consumer loans to customers in Coweta County and surrounding
counties. The ability of the majority of the Companys customers to
honor their contractual loan obligations is dependent on the economy
in these areas. Eighty-three percent of the Companys loan
portfolio is secured by real estate, of which a substantial portion
is secured by real estate in the Companys market area. The other
significant concentrations of credit by type of loan are set forth
in Note 3.

F-18



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##### Table of Contents



|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |  | The Company, as a matter of policy, does not generally extend credit
to any single borrower or group of related borrowers in excess of
25% of statutory capital, as defined, or approximately $2,250,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|NOTE 12. |  | REGULATORY MATTERS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |  | The Bank is subject to certain restrictions on the amount of
dividends that may be declared without prior regulatory approval.
At December 31, 2002, approximately $197,000 of retained earnings
were available for dividend declaration without regulatory approval.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |  | The Company and the Bank are also subject to various regulatory
capital requirements administered by the federal banking agencies.
Failure to meet minimum capital requirements can initiate certain
mandatory, and possibly additional discretionary actions by
regulators that, if undertaken, could have a direct material effect
on the financial statements. Under capital adequacy guidelines and
the regulatory framework for prompt corrective action, the Company
and Bank must meet specific capital guidelines that involve
quantitative measures of the assets, liabilities, and certain
off-balance sheet items as calculated under regulatory accounting
practices. The Company and Banks capital amounts and
classification are also subject to qualitative judgments by the
regulators about components, risk weightings, and other factors.
Prompt corrective action provisions are not applicable to bank
holding companies.
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |  | Quantitative measures established by regulation to ensure capital
adequacy require the Company and Bank to maintain minimum amounts
and ratios of Total and Tier I capital to risk-weighted assets, as
defined, and of Tier I capital to average assets, as defined.
Management believes, as of December 31, 2002 and 2001, the Company
and Bank met all capital adequacy requirements to which they are
subject.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|         |  | As of December 31, 2002, the most recent notification from the
Federal Deposit Insurance Corporation categorized the Bank as well
capitalized under the regulatory framework for prompt corrective
action. To be categorized as well capitalized, the Bank must
maintain minimum Total risk-based, Tier I risk-based, and Tier I
leverage ratios as set forth in the following table. There are no
conditions or events since that notification that management
believes have changed the Banks category.                                                                                                                                                                                                                                                                                                                                                                                                                                     

F-19



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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|         |  |                               
|-------- |  | ------------------------------
|NOTE 12. |  | REGULATORY MATTERS (Continued)

|                   |                                         |              |  |                        |        |          |  |                   |       |       |  |             |       |                   |  |  |   |   |  |   |       |  |  |  |     |  
|------------------ | --------------------------------------- | ------------ |  | ---------------------- | ------ | -------- |  | ----------------- | ----- | ----- |  | ----------- | ----- | ----------------- |  |  | - | - |  | - | ----- |  |  |  | --- | -
|                   |                                         |              |  |                        |        |          |  |                   |       |       |  | For Capital |       | Capitalized Under
|                   |                                         |              |  |                        |        |          |  |                   |       |       |  | Adequacy    |       | Prompt Corrective
|                   |                                         |              |  | Actual                 |        | Purposes |  | Action Provisions
|                   |                                         |              |  |                        |        |          |  |                  
|                   |                                         |              |  | Amount                 |        | Ratio    |  | Amount            |       | Ratio |  | Amount      |       | Ratio            
|                   |                                         |              |  |                        |        |          |  |                   |       |       |  |             |       |                  
|                   |                                         |              |  | (Dollars in Thousands)
|December 31, 2002: |                                         |              |  |                        |        |          |  |                   |       |       |  |             |       |                   |  |  |   |   |  |   |       |  |  | 
|                   | Total Capital to Risk Weighted Assets:  |              |  |                        |        |          |  |                   |       |       |  |             |       |                   |  |  |   |   |  |   |       |  |  |  |    
|                   |                                         | Consolidated |  | $                      | 10,041 |          |  |                   | 14.35 | %     |  | $           | 5,597 |                   |  |  | 8 | % |  | $ | N/A   |  |  |  | N/A |  
|                   |                                         | Bank         |  | $                      | 10,030 |          |  |                   | 14.34 | %     |  | $           | 5,597 |                   |  |  | 8 | % |  | $ | 6,996 |  |  |  | 10  | %
|                   | Tier I Capital to Risk Weighted Assets: |              |  |                        |        |          |  |                   |       |       |  |             |       |                   |  |  |   |   |  |   |       |  |  |  |    
|                   |                                         | Consolidated |  | $                      | 9,188  |          |  |                   | 13.13 | %     |  | $           | 2,798 |                   |  |  | 4 | % |  | $ | N/A   |  |  |  | N/A |  
|                   |                                         | Bank         |  | $                      | 9,177  |          |  |                   | 13.12 | %     |  | $           | 2,798 |                   |  |  | 4 | % |  | $ | 4,197 |  |  |  | 6   | %
|                   | Tier I Capital to Average Assets:       |              |  |                        |        |          |  |                   |       |       |  |             |       |                   |  |  |   |   |  |   |       |  |  |  |    
|                   |                                         | Consolidated |  | $                      | 9,188  |          |  |                   | 10.56 | %     |  | $           | 3,479 |                   |  |  | 4 | % |  | $ | N/A   |  |  |  | N/A |  
|                   |                                         | Bank         |  | $                      | 9,177  |          |  |                   | 10.55 | %     |  | $           | 3,479 |                   |  |  | 4 | % |  | $ | 4,349 |  |  |  | 5   | %
|December 31, 2001: |                                         |              |  |                        |        |          |  |                   |       |       |  |             |       |                   |  |  |   |   |  |   |       |  |  | 
|                   | Total Capital to Risk Weighted Assets:  |              |  |                        |        |          |  |                   |       |       |  |             |       |                   |  |  |   |   |  |   |       |  |  |  |    
|                   |                                         | Consolidated |  | $                      | 9,106  |          |  |                   | 17.98 | %     |  | $           | 4,052 |                   |  |  | 8 | % |  | $ | N/A   |  |  |  | N/A |  
|                   |                                         | Bank         |  | $                      | 9,140  |          |  |                   | 18.05 | %     |  | $           | 4,052 |                   |  |  | 8 | % |  | $ | 5,065 |  |  |  | 10  | %
|                   | Tier I Capital to Risk Weighted Assets: |              |  |                        |        |          |  |                   |       |       |  |             |       |                   |  |  |   |   |  |   |       |  |  |  |    
|                   |                                         | Consolidated |  | $                      | 8,494  |          |  |                   | 16.77 | %     |  | $           | 2,026 |                   |  |  | 4 | % |  | $ | N/A   |  |  |  | N/A |  
|                   |                                         | Bank         |  | $                      | 8,528  |          |  |                   | 16.84 | %     |  | $           | 2,026 |                   |  |  | 4 | % |  | $ | 3,039 |  |  |  | 6   | %
|                   | Tier I Capital to Average Assets:       |              |  |                        |        |          |  |                   |       |       |  |             |       |                   |  |  |   |   |  |   |       |  |  |  |    
|                   |                                         | Consolidated |  | $                      | 8,494  |          |  |                   | 15.57 | %     |  | $           | 2,182 |                   |  |  | 4 | % |  | $ | N/A   |  |  |  | N/A |  
|                   |                                         | Bank         |  | $                      | 8,528  |          |  |                   | 15.63 | %     |  | $           | 2,182 |                   |  |  | 4 | % |  | $ | 2,728 |  |  |  | 5   | %

|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NOTE 13. |  | FAIR VALUE OF FINANCIAL INSTRUMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|         |  | The fair value of a financial instrument is the current amount that
would be exchanged between willing parties, other than in a forced
liquidation. Fair value is best determined based upon quoted market
prices. However, in many instances, there are no quoted market
prices for the Companys various financial instruments. In cases
where quoted market prices are not available, fair values are based
on estimates using present value or other valuation techniques.
Those techniques are significantly affected by the assumptions used,
including the discount rate and estimates of future cash flows.
Accordingly, the fair value estimates may not be realized in an
immediate settlement of the instrument. SFAS No. 107, Disclosures
about Fair Values of Financial Instruments, excludes certain
financial instruments and all nonfinancial instruments from its
disclosure requirements. Accordingly, the aggregate fair value
amounts presented may not necessarily represent the underlying fair
value of the Company.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NOTE 13. |  | FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                            
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|         |  | The following methods and assumptions were used by the Company in
estimating fair value disclosures for financial instruments.                                                                                                                                                                                                                                                                                                                                                             
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|         |  | Cash, Due From Banks and Federal Funds Sold: The carrying amounts
of cash, due from banks and federal funds sold approximate fair
values.                                                                                                                                                                                                                                                                                                                                                  
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|         |  | Securities: Fair values for securities are based on available
quoted market prices. The carrying values of equity securities,
including restricted equity securities, with no readily determinable
fair value approximate fair values.                                                                                                                                                                                                                                                     
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|         |  | Loans: For variable-rate loans that reprice frequently and have no
significant change in credit risk, fair values are based on carrying
values. For other loans, the fair values are estimated using
discounted cash flow analyses, using interest rates currently being
offered for loans with similar terms to borrowers with similar
credit quality. Fair values for impaired loans are estimated using
discounted cash flow analyses or underlying collateral values, where
applicable.
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|         |  | Deposits: The carrying amounts of demand deposits, savings
deposits, and variable-rate certificates of deposit approximate
their fair values. Fair values for fixed-rate certificates of
deposit are estimated using a discounted cash flow calculation that
applies interest rates currently being offered on certificates to a
schedule of aggregated expected monthly maturities on time deposits.                                                                                      
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|         |  | Federal Funds Purchased and Other Borrowings: The carrying amounts
of variable-rate other borrowings approximate their fair values.                                                                                                                                                                                                                                                                                                                                                        
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|         |  | Accrued Interest: The carrying amounts of accrued interest approximate
their fair values.                                                                                                                                                                                                                                                                                                                                                                                                  
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|         |  | Off-Balance Sheet Instruments: Fair values of the Companys
off-balance sheet financial instruments are based on fees currently
charged to enter into similar agreements. Since the majority of the
Companys off-balance sheet instruments consist of nonfee-producing,
variable-rate commitments, the Company has determined they do not
have a distinguishable fair value.                                                                                                              

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|         |  |                                                                                                               
|-------- |  | --------------------------------------------------------------------------------------------------------------
|NOTE 13. |  | FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)                                                               
|         |  |                                                                                                               
|         |  | The estimated fair values and related carrying amounts of the
Companys financial instruments were as follows:

|                      |                                                                                 |  |                   |            |                   |  |          |            |       |  |   |            |  |  |   |            | 
|--------------------- | ------------------------------------------------------------------------------- |  | ----------------- | ---------- | ----------------- |  | -------- | ---------- | ----- |  | - | ---------- |  |  | - | ---------- | 
|                      |                                                                                 |  | December 31, 2002 |            | December 31, 2001
|                      |                                                                                 |  |                   |            |                  
|                      |                                                                                 |  | Carrying          |            | Fair              |  | Carrying |            | Fair 
|                      |                                                                                 |  | Amount            |            | Value             |  | Amount   |            | Value
|                      |                                                                                 |  |                   |            |                   |  |          |            |      
|Financial assets:     |                                                                                 |  |                   |            |                   |  |          |            |       |  |   |            |  |  |   |           
|                      | Cash, due from banks, interest
bearing deposits in banks
and federal funds sold |  | $                 | 3,054,300  |                   |  | $        | 3,054,300  |       |  | $ | 5,132,845  |  |  | $ | 5,132,845  | 
|                      | Securities available-for-sale                                                   |  |                   | 9,562,056  |                   |  |          | 9,562,056  |       |  |   | 5,828,398  |  |  |   | 5,828,398  | 
|                      | Restricted equity securities                                                    |  |                   | 324,200    |                   |  |          | 324,200    |       |  |   | 286,600    |  |  |   | 286,600    | 
|                      | Loans                                                                           |  |                   | 69,731,108 |                   |  |          | 70,658,532 |       |  |   | 46,717,329 |  |  |   | 47,649,306 | 
|                      | Accrued interest receivable                                                     |  |                   | 399,421    |                   |  |          | 399,421    |       |  |   | 284,295    |  |  |   | 284,295    | 
|Financial liabilities |                                                                                 |  |                   |            |                   |  |          |            |       |  |   |            |  |  |   |           
|                      | Deposits                                                                        |  |                   | 75,477,006 |                   |  |          | 75,313,745 |       |  |   | 51,792,793 |  |  |   | 51,650,793 | 
|                      | Federal funds purchased                                                         |  |                   | 397,000    |                   |  |          | 397,000    |       |  |   |           |  |  |   |           | 
|                      | Other borrowings                                                                |  |                   |           |                   |  |          |           |       |  |   | 35,000     |  |  |   | 35,000     | 
|                      | Accrued interest payable                                                        |  |                   | 406,707    |                   |  |          | 406,707    |       |  |   | 295,607    |  |  |   | 295,607    | 

|         |  |                                                                                        
|-------- |  | ---------------------------------------------------------------------------------------
|NOTE 14. |  | SUPPLEMENTAL FINANCIAL DATA                                                            
|         |  |                                                                                        
|         |  | Components of other operating expenses in excess of 1% of total
revenue are as follows:

|                                     |  |                          |         |      |  |   |         | 
|------------------------------------ |  | ------------------------ | ------- | ---- |  | - | ------- | 
|                                     |  | Years Ended December 31,
|                                     |  |                         
|                                     |  | 2002                     |         | 2001
|                                     |  |                          |         |     
|Professional fees                    |  | $                        | 112,988 |      |  | $ | 77,581  | 
|Advertising and business development |  |                          | 52,396  |      |  |   | 53,291  | 
|Data processing fees                 |  |                          | 228,855 |      |  |   | 147,380 | 
|Office supplies                      |  |                          | 55,916  |      |  |   | 37,497  | 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NOTE 15. |  | BUSINESS COMBINATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|         |  | During the second quarter of 2001, the Shareholders approved the
formation of a holding company for Newnan Coweta Bank at the
annual shareholders meeting. On October 1, 2001, each share of
Newnan Coweta Banks $5 par value common stock was exchanged for
one share of Newnan Coweta Bancshares, Inc. no par value common
stock. The combination was accounted for by transferring the net
assets of Newnan Coweta Bank to Newnan Coweta Bancshares, Inc. at
the carrying amount. The net income of the Bank prior to the
acquisition was $46,173 and has been included in the consolidated
statements of income.
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|NOTE 16. |  | PARENT COMPANY FINANCIAL INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|         |  | The following information presents the condensed balance sheets of
Newnan Coweta Bancshares, Inc. as of December 31, 2002 and 2001 and
the statements of income and cash flows for the year ended December
31, 2002 and for the period from October 1, 2001, date of inception,
to December 31, 2001.                                                                                                                                                                                                                                                                                                                 

CONDENSED BALANCE SHEET

|                                     |                          |                                            |   |           |           |      |   |           |           | 
|------------------------------------ | ------------------------ | ------------------------------------------ | - | --------- | --------- | ---- | - | --------- | --------- | 
|                                     |                          |                                            |   | 2002      |           | 2001
|                                     |                          |                                            |   |           |           |     
|Assets                               |                          |                                            |   |           |           |      |   |          
|                                     | Cash                     |                                            | $ | 10,330    |           |      | $ | 1,228     |          
|                                     | Investment in subsidiary |                                            |   | 9,288,200 |           |      |   | 8,671,025 |          
|                                     | Other assets             |                                            |   | 1,225     |           |      |   | 2,496     |          
|                                     |                          |                                            |   |           |           |      |   |          
|                                     |                          | Total assets                               |   | $         | 9,299,755 |      |   | $         | 8,674,749 | 
|                                     |                          |                                            |   |           |           |      |   |          
|Liabilities and Stockholders Equity |                          |                                            |   |           |           |      |   |          
|                                     | Other borrowings         |                                            | $ |          |           |      | $ | 35,000    |          
|                                     | Other liabilities        |                                            |   |          |           |      |   | 2,643     |          
|                                     |                          |                                            |   |           |           |      |   |          
|                                     |                          | Total liabilities                          |   |           |          |      |   |           | 37,643    | 
|                                     |                          |                                            |   |           |           |      |   |          
|                                     | Stockholders equity     |                                            |   | 9,299,755 |           |      |   | 8,637,106 |          
|                                     |                          |                                            |   |           |           |      |   |          
|                                     |                          | Total liabilities and stockholders equity |   | $         | 9,299,755 |      |   | $         | 8,674,749 | 
|                                     |                          |                                            |   |           |           |      |   |          

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|         |  |                                                 
|-------- |  | ------------------------------------------------
|NOTE 16. |  | PARENT COMPANY FINANCIAL INFORMATION (Continued)

CONDENSED STATEMENTS OF INCOME

|                                                                                           |                           |   |         |        |      |   |         |        | 
|------------------------------------------------------------------------------------------ | ------------------------- | - | ------- | ------ | ---- | - | ------- | ------ | 
|                                                                                           |                           |   | 2002    |        | 2001
|                                                                                           |                           |   |         |        |     
|Income                                                                                     |                           |   |         |        |      |   |         |       
|                                                                                           | Dividends from subsidiary |   | $       | 45,000 |      |   | $       |       | 
|                                                                                           | Interest                  |   |         | 22     |      |   |         | 133    | 
|                                                                                           |                           |   |         |        |      |   |         |       
|                                                                                           |                           |   | 45,022  |        |      |   | 133     |       
|                                                                                           |                           |   |         |        |      |   |         |       
|Expenses                                                                                   |                           |   |         |        |      |   |         |       
|                                                                                           | Interest                  |   |         | 1,399  |      |   |         | 432    | 
|                                                                                           | Other                     |   |         | 1,870  |      |   |         | 33,620 | 
|                                                                                           |                           |   |         |        |      |   |         |       
|                                                                                           |                           |   | 3,269   |        |      |   | 34,052  |       
|                                                                                           |                           |   |         |        |      |   |         |       
|Income (loss) before income tax benefit and equity
in undistributed earnings of subsidiary |                           |   | 41,753  |        |      |   | (33,919 | )     
|                                                                                           | Income tax benefit        |   |         | (3,721 | )    |   |         |       | 
|                                                                                           |                           |   |         |        |      |   |         |       
|Income (loss) before equity in undistributed
earnings of subsidiary                        |                           |   | 45,474  |        |      |   | (33,919 | )     
|Equity in undistributed earnings of subsidiary                                             |                           |   | 649,329 |        |      |   | 46,410  |       
|                                                                                           |                           |   |         |        |      |   |         |       
|Net income                                                                                 |                           | $ | 694,803 |        |      | $ | 12,491  |       
|                                                                                           |                           |   |         |        |      |   |         |       

CONDENSED STATEMENTS OF CASH FLOWS

|                            |                                                                                             |                                                     |        |          |         |      |       |         |         |  
|--------------------------- | ------------------------------------------------------------------------------------------- | --------------------------------------------------- | ------ | -------- | ------- | ---- | ----- | ------- | ------- | -
|                            |                                                                                             |                                                     |        | 2002     |         | 2001
|                            |                                                                                             |                                                     |        |          |         |     
|OPERATING ACTIVITIES        |                                                                                             |                                                     |        |          |         |      |       |        
|                            | Net income                                                                                  |                                                     |        | 694,803  |         |      | $     | 12,491  |        
|                            | Adjustments to reconcile net income to net
cash provided by (used in) operating activities: |                                                     |        |          |         |      |       |         |        
|                            | Equity in earnings of subsidiary                                                            |                                                     |        | (649,329 | )       |      |       | (46,410 | )      
|                            | Net other operating activities                                                              |                                                     |        | (1,372   | )       |      |       | 147     |        
|                            |                                                                                             |                                                     |        |          |         |      |       |        
|                            |                                                                                             | Net cash provided by (used in) operating activities |        |          | 44,102  |      |       |         | (33,772 | )
|                            |                                                                                             |                                                     |        |          |         |      |       |        
|FINANCING ACTIVITIES        |                                                                                             |                                                     |        |          |         |      |       |        
|                            | Proceeds from (repayment of) other borrowings                                               |                                                     |        | (35,000  | )       |      |       | 35,000  |        
|                            |                                                                                             |                                                     |        |          |         |      |       |        
|                            |                                                                                             | Net cash provided by (used in) financing activities |        |          | (35,000 | )    |       |         | 35,000  |  
|                            |                                                                                             |                                                     |        |          |         |      |       |        
|Net increase in cash        |                                                                                             |                                                     | 9,102  |          |         |      | 1,228 |        
|Cash at beginning of period |                                                                                             |                                                     | 1,228  |          |         |      |      |        
|                            |                                                                                             |                                                     |        |          |         |      |       |        
|Cash at end of period       |                                                                                             | $                                                   | 10,330 |          |         | $    | 1,228 |        
|                            |                                                                                             |                                                     |        |          |         |      |       |        

F-24