U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

                Annual Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934
                   For the Fiscal Year Ended December 31, 2000

              Transition Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934

                        Commission File Number 000-25267

                          Oconee Financial Corporation
    ------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                      Georgia                                58-2442250
             ------------------------------             -------------------
            (State or other jurisdiction of              (I.R.S. Employer
            incorporation or organization)              Identification No.)

             35 North Main Street, Watkinsville, Georgia 30677-0205
         --------------------------------------------------------------
               (Address of principal executive office) (Zip Code)

Registrant's telephone number, including area code:  (706) 769-6611
                                                    ---------------

Securities registered pursuant to Section 12(b) of the Act:  None

Name of exchange on which registered:  None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $10.00
par value per share.

         Check whether the Registrant  (1) has filed all reports  required to be
filed by Section 13 or 15(d) of the  Securities  Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days.

                           Yes     X         No
                                ------           -----

         Check  if  disclosure  of  delinquent  filers  pursuant  to Item 405 of
Regulation S-K is not contained herein and will not 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 /

         State issuer's revenues for its most recent fiscal year.  $15,454,110
                                                                   -----------

         Transitional Small Business Disclosure format.  Yes          No   X
                                                              -----      -----

         State  the  aggregate   market  value  of  the  voting  stock  held  by
non-affiliates  (which for purposes  hereof are all holders other than executive
officers and  directors):  As of March 15, 2001:  115,903 shares of common stock
$10.00 par value (the "Common  Stock"),  with an aggregate  value of $19,587,607
(based on approximate market value of $169.00/share)  (the last sale price known
to the Registrant for the Common Stock for which there is no established trading
market).

         State the number of shares  outstanding of each of the issuer's classes
of Common Stock as of the latest  practicable  date. As of March 20, 2001, there
were issued and outstanding 179,977 shares of Common Stock, par value $10.00 per
share.


<PAGE>
                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

General
-------

         Oconee  Financial  Corporation  ("Oconee"),  a registered  bank holding
company,  was  incorporated  under  the laws of  Georgia  in 1998 and  commenced
operations by acquiring 100% of the outstanding shares of Oconee State Bank (the
"Bank")  effective  January 1, 1999.  All of Oconee's  activities  are currently
conducted by the Bank, its wholly owned subsidiary,  which was incorporated as a
bank  under the laws of  Georgia  in 1959.  At  December  31,  2000,  Oconee had
approximately  600 holders of record of Common  Stock,  its only class of equity
securities.

         At December  31,  2000,  the Bank's  total  assets  were  $181,925,000,
compared to $152,139,000  at year-end 1999. Over the past 5 years,  total assets
of the Bank have grown by $92,146,000 representing an increase of 102.6%.

Services
--------

         The Bank is a community oriented, full-service commercial bank, located
in Oconee and Clarke Counties,  Georgia with three full-service banking offices,
one  limited-service  loan production  office and five automated teller machines
(ATMs). The Bank places an emphasis on retail banking, and offers such customary
banking  services as consumer and commercial  checking  accounts,  NOW accounts,
money market accounts,  savings accounts,  certificates of deposits,  individual
retirement  accounts,  safe deposit  facilities,  and money transfers.  The Bank
finances  commercial  and consumer  transactions,  makes  secured and  unsecured
loans,  offers lines of credit,  VISA and  MasterCard  accounts,  and provides a
variety of other banking services.

Markets
-------

         The primary market for the Bank is Oconee County,  Georgia.  The Bank's
secondary market is defined as those counties contiguous to Oconee County, which
include Clarke,  Greene,  Morgan,  Walton,  Barrow,  and Oglethorpe,  as well as
Madison County,  which is not contiguous to Oconee County,  but is a part of the
Athens Standard Metropolitan Statistical Area.

Deposits
--------

         The Bank offers a full range of  depository  accounts  and  services to
both  consumers and  businesses.  At December 31, 2000,  the Bank's deposit base
totaled $150,538,000 and consisted of the following types of accounts:

                                                Amount         Percentage
                                                ------         ----------

Non-interest bearing demand deposits        $ 20,065,000           13.3%
Interest-bearing NOW accounts ......          21,830,000           14.5%
Money market deposit accounts ......          15,360,000           10.2%
Savings deposits ...................           7,998,000            5.3%
Time deposits less than $100,000 ...          54,448,000           36.2%
Time deposits of $100,000 or more ..          23,162,000           15.4%
Individual Retirement Accounts .....           7,675,000            5.1%
                                            ------------          -----
       Total Deposits ..............        $150,538,000          100.0%
                                            ============          =====


                                       2
<PAGE>

         Management  of the Bank is of the  opinion  that its time  deposits  of
$100,000 or more are customer  relationship-oriented  and represent a reasonably
stable source of funds.

Loans
-----

         The Bank makes both  secured and  unsecured  loans to  individuals  and
businesses.   At  December  31,  2000,   the  Bank's  loan   portfolio   totaled
$123,341,000, consisting of the following categories of loans:

                                                    Amount           Percentage
                                                -------------        ----------

Loans secured by real estate                    $  94,700,000            76.8%
Agricultural production & loans to farmers            662,000             0.5%
Commercial and industrial loans                    15,105,000            12.3%
Credit cards and related plans                        997,000             0.8%
Consumer loans (excluding credit cards)            10,822,000             8.8%
All other loans                                     1,160,000             0.9%
Lease financing receivables                           105,000             0.1%
LESS:  Unearned income                               (210,000)           (0.2%)
                                                -------------           -----
       Total Loans Net of Unearned Income       $ 123,341,000           100.0%
                                                =============           =====


         The following  table shows the amounts and growth for loans,  deposits,
capital,  and total assets at December 31, for the years ended 1995-2000 (dollar
amounts are in millions):

<TABLE>
<CAPTION>
                                                                                                      5-Year
                                 2000         1999        1998       1997       1996        1995       Growth
                                 ----         ----        ----       ----       ----        ----       ------
         <S>                  <C>           <C>         <C>          <C>        <C>         <C>       <C>
         Loans                $ 123.3       $ 93.3      $ 76.8       $ 72.3     $ 68.8      $ 58.6    $ 64.7
         Deposits               150.5        136.5       116.1        104.6       97.0        79.3      71.2
         Capital                 15.1         13.0        12.5         11.2       10.0         9.1       6.0
         Total Assets           181.9        152.1       130.7        117.5      108.5        89.8      92.1
</TABLE>


As of December 31,  2000,  the Bank had  concentrations  of loans to the housing
industry  and to the hotel and motel  industry.  Loans  secured  by real  estate
totaled  $94,700,000,  which  represented  76.8% of the Bank's loan portfolio at
December 31, 2000. At year-end 2000, total outstanding  balances and commitments
for development and construction loans were $41,563,000, which represented 33.7%
of the Bank's total loans and 276.1% of the Bank's  equity  capital.  The Bank's
established  guideline for this concentration is to be in a range of 200% - 285%
of Tier 1 equity capital.  Low interest rates and the  desirability of living in
Oconee County have fueled demand for new housing and therefore new  subdivisions
in the area. Georgia Highway 316, the Watkinsville  by-pass,  and the re-routing
of Highway 441 will continue to encourage  further housing growth,  resulting in
the Bank's continued  concentration of loans to this industry. At year-end 2000,
total  outstanding  balances  and  commitments  for hotel and motel  loans  were
$26,359,000, which represented 21.4% of the Bank's total loans and 175.1% of the
Bank's equity capital.  The Bank's established  guideline for this concentration
is to be in a range of 100%-200% of Tier 1 equity capital.  The demand for hotel
and motel loans,  both new and refinancing,  continues to be strong.  The Bank's
proven interest and reputation in providing funding for this industry has led to
an increase in demand from repeat, referred, and new borrowers.


                                       3
<PAGE>

Lending Policy
--------------

         The  current  lending  policy  of the Bank is to offer  consumer,  real
estate, and commercial credit services to individuals and entities that meet the
Bank's credit  standards.  The Bank  provides each lending  officer with written
guidelines for lending  activities.  Lending authority is delegated by the Board
of Directors of the Bank to loan officers, each of whom is limited in the amount
of secured and unsecured loans which he can make to a single borrower or related
group of borrowers.

         The Board of Directors of the Bank is  responsible  for  approving  and
monitoring  the loan  policy,  providing  guidance  and  counsel to all  lending
personnel and approving all extensions of credit over $250,000.

Loan Review and Non-performing Assets
-------------------------------------

         The Bank  reviews its loan  portfolio  to  determine  deficiencies  and
corrective action to be taken.  Senior lending officers conduct periodic reviews
of borrowers with total direct and indirect indebtedness of $250,000 or more and
ongoing  review of all past due  loans.  Past due loans  are  reviewed  at least
weekly by lending  officers,  and a summary  report is  reviewed  monthly by the
Board of Directors  of the Bank.  The Board of Directors of the Bank reviews all
loans over $250,000,  whether  current or past due, at least once  annually.  In
addition,  the Bank  maintains  internal  classifications  of potential  problem
loans. The Bank also utilizes an independent  external loan review specialist to
review all outstanding debt from customers exceeding $250,000.

         Past due loans are  typically  charged  off when they  reach a past due
status of 90 days or more.  Exceptions to this involve loans involving customers
who have begun  bankruptcy  proceedings,  as well as loans on which the Bank has
begun  foreclosure or other steps of collection,  under which  circumstances the
loans are placed in nonaccrual status.

Investment Policy
-----------------

         The  Bank's  investment  policy  provides  guidelines  for  determining
permissible investments in the investment portfolio, credit criteria and quality
ratings,  the  desired  mix among  those  investments,  and  preferred  maturity
distribution  of the  portfolio.  The Bank has five  objectives  concerning  its
investment portfolio which address  asset/liability  management,  profitability,
liquidity,  pledging,  and local community support. The Bank's President/CEO and
Executive Vice President/CFO are authorized to buy and sell securities according
to the criteria set forth in the  investment  policy.  Individual  transactions,
portfolio  composition and performance are reviewed by the Bank's Investment and
Asset/Liability Management Committee and the full Board of the Bank on a monthly
basis.  The  investment  policy is  reviewed  annually  by the  Bank's  Board of
Directors.

         In general,  the Bank's investment policy is to place securities in the
Available for Sale  portfolio.  As of December 31, 2000,  investment  securities
totaled $30,057,000.

The primary risks in the Bank's securities portfolio consist of two types:

         (1)      Credit  risk,  or the risk of default of the issuer.  Treasury
                  and  Agency  securities  comprised  57.6%  of  the  portfolio;
                  therefore the credit risk is primarily  limited to the risk of
                  default  of the  U.S.  Government  and  its  agencies.  State,
                  County,  and Municipal  bonds represent 42.4% of the portfolio
                  with the  credit  risk  limited  to the risk of default of the
                  issuing municipality.


                                       4
<PAGE>

         (2)      Interest  rate  risk,  or the  risk of  adverse  movements  in
                  interest  rates on the value of the portfolio.  In general,  a
                  rise in  interest  rates  will  cause the value of the  Bank's
                  securities portfolio to decline. The longer the maturity of an
                  individual  security,  the  greater  the  effect  of change in
                  interest  rate on its value.  The Bank  measures  its interest
                  rate risk  exposure  by  analyzing  its rate  sensitivity  GAP
                  position.  The Bank's GAP position is reviewed  monthly by the
                  Investment and  Asset/Liability  Management  Committee and the
                  Board of Directors.  See "Management's Discussion and Analysis
                  of Financial  Condition  and Plan of  Operation  for the Years
                  Ended  December  31,  2000  and  1999  -  Asset/Liability  and
                  Interest Rate Sensitivity Management."

Competition
-----------

         The Bank  competes in Oconee County with five other  commercial  banks.
With three full-service and one limited banking office within Oconee County, the
Bank is the market  leader in Oconee  County in terms of assets,  deposit  size,
facility locations, and market coverage.

         The Bank also  competes  in  Athens-Clarke  County.  There  are  twelve
commercial banks in Athens-Clarke  County,  four of which have offices in Oconee
County.  As of June 30, 2000, the twelve banks located in  Athens-Clarke  County
held  deposits  totaling   $1,112,697,000.   The  Bank's  physical  presence  in
Athens-Clarke  County is  limited to the loan  production  office,  an  in-store
branch in the East  Athens  Wal-Mart  Supercenter,  and two  ATM's,  located  in
Jimbo's Convenience Store and Quick Stop Convenience Store.

         The following table shows deposits by financial  institution along with
market share in Oconee County for the period ended June 30, 2000 (Dollar amounts
are in thousands):

                                                      Total              Market
                                                     Deposits            Share
                                                     --------            -----

          Athens First Bank & Trust Company          $ 66,035           28.8%
          Bank of America, N.A                          8,828            3.9%
          First American Bank & Trust Company           5,248            2.3%
          North Georgia Bank                            5,321            2.3%
          Oconee State Bank                           140,605           61.4%
          SunTrust Bank, N.A                            2,878            1.3%
                                                     --------        -------

               Total Deposits                        $228,915          100.0%
                                                     ========        ======


         In  addition   to  the  Bank's   competition   in  Oconee   County  and
Athens-Clarke  County,  the Bank competes with commercial  banks,  thrifts,  and
various other  financial  institutions  and brokerage firms located in Northeast
Georgia  counties  outside its primary and secondary  market areas.  To a lesser
extent, the Bank also competes for deposits and loans with credit unions and for
loans with insurance  companies,  small loan or finance  companies,  and certain
governmental  agencies.  To the extent  that banks  must  maintain  non-interest
earning reserves  against  deposits,  they may be at a competitive  disadvantage
when compared with other financial service  organizations  that are not required
to maintain reserves against substantially equivalent sources of funds.

         Further,  the increased income  competition from investment bankers and
brokers and other financial service  organizations may have a significant impact
upon the competitive environment in which the Bank operates.

         Set forth below are certain ratios of the Bank for the years indicated:



                                       5
<PAGE>

<TABLE>
<CAPTION>
                                                                  2000            1999           1998
                                                                  ----            ----           ----
<S>                                                               <C>            <C>            <C>
Net income to:
         Average equity capital accounts                          17.46%         16.66%         16.61%
         Average daily total deposits                              1.76%          1.83%          1.93%
Ratio of average daily loans to average daily deposits            80.31%         72.06%         72.16%
</TABLE>

         The business of the Bank is not materially  seasonal.  Construction and
development lending are strongest in Spring and Summer.  Building slows somewhat
in Fall and Winter,  but not to the degree that there is an  appreciable  impact
upon the Bank's Balance Sheet or Statement of Earnings.

Forward Looking Statements
--------------------------

         Information  provided by Oconee or  statements  made by our  directors,
officers or employees  may  constitute  "forward-looking"  statements  under the
Private  Securities  Litigation  Reform Act of 1995 and are  subject to numerous
risks and  uncertainties.  Any  statements  made in this  Annual  Report on Form
10-KSB  including  any  statements  incorporated  by  reference,  that  are  not
statements   of   historical   fact  are   forward-looking   statements.   These
forward-looking  statements and other  forward-looking  statements made by us or
our representatives are based on a number of assumptions and involve a number of
risks  and  uncertainties,   and,  accordingly,   actual  results  could  differ
materially.  Factors  that could cause  actual  results to differ  from  results
discussed  in  forward-looking  statements  include,  but  are not  limited  to:
economic  conditions (both generally and in the markets where Oconee  operates);
competition  from  other  providers  of  financial  services  offered by Oconee;
government  regulations and  legislation;  changes in interest  rates;  material
unforeseen  changes in the financial  stability and liquidity of Oconee's credit
customers,  all of which are  difficult  to predict  and which may be beyond the
control of Oconee.  Oconee  undertakes no  obligation to revise  forward-looking
statements to reflect events or changes after the date of this  discussion or to
reflect the occurrence of unanticipated events.

Supervision and Regulation
--------------------------

         GENERAL.  Oconee  is a  registered  bank  holding  company  subject  to
regulation by the Board of Governors of the Federal Reserve System (the "Federal
Reserve")  under the Bank Holding  Company Act of 1956,  as amended (the "Act").
Oconee is  required  to file  financial  information  with the  Federal  Reserve
periodically and is subject to periodic examination by the Federal Reserve.

         The Act  requires  every  bank  holding  company  to  obtain  the prior
approval of the  Federal  Reserve  before (i) it may acquire  direct or indirect
ownership  or control  of more than 5% of the voting  shares of any bank that it
does not already control; (ii) it or any of its subsidiaries, other than a bank,
may acquire all or  substantially  all of the assets of a bank; and (iii) it may
merge or consolidate  with any other bank holding company.  In addition,  a bank
holding company is generally  prohibited from engaging in, or acquiring,  direct
or indirect  control of the voting shares of any company  engaged in non-banking
activities.  This  prohibition does not apply to activities found by the Federal
Reserve, by order or regulation, to be so closely related to banking or managing
or controlling banks as to be a proper incident thereto.  Some of the activities
that the Federal  Reserve has  determined  by  regulation or order to be closely
related to banking are:  making or servicing  loans and certain types of leases;
performing certain data processing  services;  acting as fiduciary or investment
or financial advisor;  providing discount brokerage services;  underwriting bank
eligible securities;  underwriting debt and equity securities on a limited basis
through  separately   capitalized   subsidiaries;   and  making  investments  in
corporations or projects designed primarily to promote community welfare.



                                       6
<PAGE>

         Bank  holding  companies  whose  banking   subsidiaries  are  all  well
capitalized  and well  managed  may also  apply to  become a  financial  holding
company.  Financial holding companies have the authority to engage in activities
that are  "financial  in nature" that are not  permitted  for other bank holding
companies.  Some of the activities that the Act provides are financial in nature
are:

         (a)      lending,  exchanging,  transferring,  investing for others, or
                  safeguarding money or securities;

         (b)      insuring,  guaranteeing,  or indemnifying  against loss, harm,
                  damage,  illness,  disability,  or  death,  or  providing  and
                  issuing annuities,  and acting as principal,  agent, or broker
                  with respect thereto;

         (c)      providing   financial,   investment,   or  economic   advisory
                  services, including advising an investment company;

         (d)      issuing or selling instruments representing interests in pools
                  of assets permissible for a bank to hold directly; and

         (e)      underwriting, dealing in, or making a market in securities.

         Oconee  has no  immediate  plans to  register  as a  financial  holding
company.

         Oconee must also  register  with the Georgia  Department of Banking and
Finance (the "GDBF") and file  periodic  information  with the GDBF.  As part of
such registration,  the GDBF requires  information with respect to the financial
condition, operations,  management, and intercompany relationships of Oconee and
the Bank and related matters.  The GDBF may also require such other  information
as is necessary to keep itself  informed as to whether the provisions of Georgia
law and the  regulations  and  orders  issued  thereunder  by the GDBF have been
complied with, and the GDBF may examine Oconee and the Bank.

         Oconee is an  "affiliate"  of the Bank under the Federal  Reserve  Act,
which  imposes  certain  restrictions  on (i) loans by the Bank to Oconee,  (ii)
investments  in the stock or securities of Oconee by the Bank,  (iii) the Bank's
taking the stock or securities of an  "affiliate" as collateral for loans by the
Bank to a  borrower,  and (iv) the  purchase  of assets from Oconee by the Bank.
Further,  a bank  holding  company  and its  subsidiaries  are  prohibited  from
engaging in certain  tie-in  arrangements  in  connection  with any extension of
credit, lease or sale of property or furnishing of services.

         The Bank, a subsidiary of Oconee, is regularly  examined by the Federal
Deposit  Insurance   Corporation  (the  "FDIC").   The  Bank,  a  state  banking
association  organized  under Georgia law, is subject to the supervision of, and
is regularly  examined by, the GDBF. Both the FDIC and the GDBF must grant prior
approval  of any  merger,  consolidation  or  other  corporation  reorganization
involving  the Bank.  A bank can be held  liable  for any loss  incurred  by, or
reasonably  expected to be incurred by, the FDIC in connection  with the default
of a commonly controlled institution.

         PAYMENT OF  DIVIDENDS.  Oconee is a legal entity  separate and distinct
from the Bank.  Most of the revenues of Oconee result from  dividends paid to it
by the Bank. There are statutory and regulatory  requirements  applicable to the
payment of dividends by the Bank, as well as by Oconee to its shareholders.

         The Bank is a state  chartered bank regulated by the GDBF and the FDIC.
Under the  regulations  of the GDBF,  dividends  may not be declared  out of the
retained earnings of a state bank without first obtaining the written permission
of the GDBF unless such bank meets all the following requirements:



                                       7
<PAGE>

         (a)      total classified  assets as of the most recent  examination of
                  the bank do not exceed 80% of equity  capital  (as  defined by
                  regulation);

         (b)      the aggregate  amount of dividends  declared or anticipated to
                  be  declared in the  calendar  year does not exceed 50% of the
                  net profits after taxes but before  dividends for the previous
                  calendar year; and

         (c)      the ratio of equity  capital  to  adjusted  assets is not less
                  than 6%.

         The payment of dividends by Oconee and the Bank may also be affected or
limited by other factors,  such as the requirement to maintain  adequate capital
above regulatory  guidelines.  In addition, if, in the opinion of the applicable
regulatory authority, a bank under its jurisdiction is engaged in or is about to
engage in an unsafe or unsound  practice  (which,  depending  upon the financial
condition of the bank,  could include the payment of dividends),  such authority
may require, after notice and hearing, that such bank cease and desist from such
practice.  The FDIC has issued a policy  statement  providing that insured banks
should  generally  only pay  dividends  out of current  operating  earnings.  In
addition to the formal statutes and regulations, regulatory authorities consider
the adequacy of the Bank's total capital in relation to its assets, deposits and
other such  items.  Capital  adequacy  considerations  could  further  limit the
availability  of  dividends  to the Bank.  At  December  31,  2000,  net  assets
available from the Bank to pay dividends  without prior approval from regulatory
authorities  totaled  $1,240,381.  For 2000,  Oconee's cash  dividend  payout to
stockholders was 40.1%of net income.

         MONETARY POLICY.  The results of operations of the Bank are affected by
credit policies of monetary  authorities,  particularly the Federal Reserve. The
instruments  of monetary  policy  employed by the Federal  Reserve  include open
market operations in U.S. government securities, changes in the discount rate on
bank borrowings and changes in reserve  requirements  against bank deposits.  In
view of changing conditions in the national economy and in the money markets, as
well as the effect of actions by monetary and fiscal authorities,  including the
Federal  Reserve,  no prediction  can be made as to possible  future  changes in
interest rates,  deposit levels, loan demand or the business and earnings of the
Bank.

         CAPITAL  ADEQUACY.  The Federal  Reserve and the FDIC have  implemented
substantially  identical  risk-based  rules for assessing  bank and bank holding
company capital adequacy.  These regulations establish minimum capital standards
in relation to assets and  off-balance  sheet  exposures  as adjusted for credit
risk. Banks and bank holding  companies are required to have (1) a minimum level
of total capital (as defined) to risk-weighted assets of eight percent (8%); (2)
a minimum Tier One Capital (as defined) to risk-weighted  assets of four percent
(4%); and (3) a minimum  stockholders'  equity to  risk-weighted  assets of four
percent (4%). In addition,  the Federal Reserve and the FDIC have  established a
minimum three  percent (3%)  leverage  ratio of Tier One Capital to total assets
for the most highly rated banks and bank holding  companies.  "Tier One Capital"
generally consists of common equity not including  unrecognized gains and losses
on  securities,   minority   interests  in  equity   accounts  of   consolidated
subsidiaries and certain perpetual preferred stock less certain intangibles. The
Federal  Reserve and the FDIC will  require a bank  holding  company and a bank,
respectively,  to maintain a leverage  ratio  greater than three percent (3%) if
either is experiencing or anticipating  significant  growth or is operating with
less than  well-diversified  risks in the  opinion of the Federal  Reserve.  The
Federal  Reserve  and the  FDIC  use the  leverage  ratio  in  tandem  with  the
risk-based  ratio to assess  the  capital  adequacy  of banks  and bank  holding
companies.  The FDIC, the Office of the  Comptroller of the Currency (the "OCC")
and the Federal  Reserve have amended,  effective  January 1, 1997,  the capital
adequacy standards to provide for the consideration of interest rate risk in the
overall  determination  of a bank's capital ratio,  requiring banks with greater
interest  rate risk to  maintain  adequate  capital  for the risk.  The  revised
standards have not had a significant effect on Oconee's capital requirements.



                                       8
<PAGE>

         In  addition,  effective  December  19,  1992,  a new Section 38 to the
Federal  Deposit   Insurance  Act  implemented  the  prompt   corrective  action
provisions  that  Congress  enacted as a part of the Federal  Deposit  Insurance
Corporation  Improvement  Act of 1991 (the "1991 Act").  The "prompt  corrective
action" provisions set forth five regulatory zones in which all banks are placed
largely  based on their  capital  positions.  Regulators  are  permitted to take
increasingly harsh action as a bank's financial condition  declines.  Regulators
are also  empowered  to place in  receivership  or require the sale of a bank to
another depository  institution when a bank's capital leverage ratio reaches 2%.
Better-capitalized institutions are generally subject to less onerous regulation
and supervision than banks with lesser amounts of capital.

         The FDIC has adopted  regulations  implementing  the prompt  corrective
action  provisions of the 1991 Act, which place  financial  institutions  in the
following  five  categories  based  upon  capitalization  ratios:  (1)  a  "well
capitalized" institution has a total risk-based capital ratio of at least 10%, a
Tier One  risk-based  ratio of at least 6% and a leverage  ratio of at least 5%;
(2) an "adequately capitalized" institution has a total risk-based capital ratio
of at least 8%, a Tier One risk-based  ratio of at least 4% and a leverage ratio
of at least 4%; (3) an  "undercapitalized"  institution  has a total  risk-based
capital ratio of under 8%, a Tier One risk-based ratio of under 4% or a leverage
ratio of under 4%;  (4) a  "significantly  undercapitalized"  institution  has a
total risk-based capital ratio of under 6%, a Tier One risk-based ratio of under
3% or a  leverage  ratio of under 3%;  and (5) a  "critically  undercapitalized"
institution has a leverage ratio of 2% or less. Institutions in any of the three
undercapitalized  categories  would be prohibited  from  declaring  dividends or
making capital distributions. The FDIC regulations also establish procedures for
"downgrading"  an institution  to a lower capital  category based on supervisory
factors other than capital.  Under the FDIC's regulations,  the Bank was a "well
capitalized" institution at December 31, 1999 and December 31, 2000.

         Set  forth  below  are  pertinent  capital  ratios  for the  Bank as of
December 31, 2000 and 1999:

Minimum Capital Requirement                                   The Bank
---------------------------                                   --------

                                                      2000                1999
                                                      ----                ----

Tier One Capital to                                   11.4%               13.3%
         Risk Weighted
         Assets:  4%(1)

Total Capital to                                      12.7%               14.6%
         Risk Weighted
         Assets:  8%(2)

Leverage Ratio (Tier One                              8.6%                9.2%
         Capital to Average Total
         Assets):  3% (3)
--------------------------

(1)  Minimum required ratio for "well capitalized" banks is 6%
(2)  Minimum required ratio for "well capitalized" banks is 10%
(3)  Minimum required ratio for "well capitalized" banks is 5%

         RECENT  LEGISLATIVE  AND  REGULATORY  ACTION.  On  November  12,  1999,
President Clinton signed the Gramm-Leach-Bliley Act, a very significant piece of
legislation  intended to modernize the  financial  services  industry.  The bill
repeals the anti-affiliation  provisions of the 1933 Glass-Steagall Act to allow
for the merger of banking  and  securities  organizations  and  permits  banking
organizations   to   engage  in   insurance   activities   including   insurance


                                       9
<PAGE>

underwriting. The bill also allows bank holding companies to engage in financial
activities  that are  "financial  in  nature  or  complementary  to a  financial
activity."  The act lists the  expanded  areas that are  financial in nature and
includes  insurance  and  securities  underwriting  and merchant  banking  among
others. The bill also:

         (a)      prohibits    non-financial    entities   from   acquiring   or
                  establishing a thrift while  grandfathering  existing  thrifts
                  owned by non-financial entities;

         (b)      establishes  state  regulators as the  appropriate  functional
                  regulators  for insurance  activities  but provides that state
                  regulators  cannot "prevent or  significantly  interfere" with
                  affiliations between banks and insurance firms;

         (c)      contains provisions designed to protect consumer privacy.  The
                  bill requires financial  institutions to disclose their policy
                  for  collecting and protecting  confidential  information  and
                  allows  consumers to "opt out" of  information  sharing except
                  with  unaffiliated  third parties who market the institutions'
                  own  products  and  services or  pursuant to joint  agreements
                  between two or more financial institutions; and

         (d)      provides  for  functional  regulation  of a bank's  securities
                  activities by the Securities and Exchange Commission.

         Various portions of the bill have different  effective  dates,  ranging
from immediately to more than a year for implementation.

Economic Conditions
-------------------

         Economic  growth in the Bank's  primary  service  area is  expected  to
remain  steady.  The counties in the Bank's market area are expected to continue
to receive revenues from their traditional sources of trade, finance, insurance,
real estate development and sales,  manufacturing and the service industry. Both
employment  and population  growth are projected to increase  steadily in Oconee
and Athens-Clarke Counties.

Employees
---------

         At  December  31,  2000,  the Bank had 59  full-time  employees  and 29
part-time  employees.  The  Bank is not a  party  to any  collective  bargaining
agreement, and the Bank believes that its employee relations are good.

ITEM 2.  DESCRIPTION OF PROPERTIES.

         The Bank operates three  full-service  banking  offices and one limited
service banking office as follows:

         (1)      Main Office
                  -----------

                  35 North Main Street
                  Watkinsville, Georgia 30677

         (2)      Bogart Branch
                  -------------

                  U.S. Highway 78
                  Bogart, Georgia 30622



                                       10
<PAGE>

         (3)      Friendship Branch
                  -----------------

                  8811 Macon Highway
                  Athens, Georgia 30606

         (4)      Mortgage Department/Operations Annex
                  ------------------------------------

                  (Limited Service/Support Offices)
                  Condominium Units 10, 12, 14, 16, & 18
                  Durham Street
                  Watkinsville, Georgia 30677

          (5)      Athens Loan Center
                   ------------------

                  (Limited Service Loan Production Office)
                  500 North Milledge Avenue
                  Athens, Georgia 30605

         (6)      East Athens Wal-Mart Supercenter
                  --------------------------------

                  (In-Store Full Service Branch)
                  4375 Lexington Road
                  Athens, Georgia 30605


         The  executive  offices  and the main office of Oconee and the Bank are
located in a 6,500 square-foot facility at 35 North Main Street in Watkinsville,
Georgia with three drive-thru windows and a walk-up ATM.

         The Bogart Branch is located at the intersection of U.S. Highway 78 and
Mars Hill  Road in  Bogart,  Georgia.  This  5,250  square-foot  facility  has 2
drive-thru windows and a drive-thru ATM.

         The  Friendship  Branch is an 800  square-foot  facility  at 8811 Macon
Highway,  Athens,  Georgia.  This branch has three drive-thru windows and serves
the  Friendship  community.  Although it has an Athens  address,  this branch is
located within Oconee County.

         The Bank owns five office  condominium units adjacent to and behind its
main  office in  Watkinsville.  The units are  numbered  10, 12, 14, 16, & 18 on
Durham Street in Watkinsville,  Georgia. Each unit contains 1,180 square feet on
the ground floor and 450 square feet on the second  floor,  for a total of 1,630
square feet per unit or 8,150  square feet for all units  owned.  Unit 10 houses
the Bank's  mortgage  loan  department,  Units 12, 14, and 16 are  connected  by
interior hallways and house proof,  bookkeeping,  supplies, human resources, and
training  functions.   Unit  18  is  occupied  by  the  Bank's  loan  operations
department.

         All of the properties  referenced previously are owned by Oconee or the
Bank.

         In  September  1999,  the  Bank  entered  into a lease  agreement  with
Hardigree Properties, LLLP to lease office condominium unit #20 on Durham Street
in Watkinsville,  Georgia.  This unit is next to other office condominiums owned
by the Bank.  The  lease is for two years  with an option to renew at the end of
two years. Unit 20 houses accounting and audit personnel and allows needed space
for  expansion.  In addition,  two parking lots  adjacent to the main office are
leased which provide additional parking for employees.

         The  Athens  Loan  Center is located  at 500 North  Milledge  Avenue in
Athens, Georgia. The Loan Center is a 2,000 square foot building that houses one
commercial  loan  officer and one  mortgage  loan  originator,  along with their
support  staff.  The Loan Center is leased by the Bank from Henry G. Utley.  The
lease was entered into in July of 1999 and is for two years.


                                       11
<PAGE>

         The Bank  leases  space in the  Wal-Mart  Supercenter  Store  No.  2811
located at 4375 Lexington Road in Athens,  Georgia.  This branch is located in a
695 square foot leased space inside the store. The space is leased from Wal-Mart
Stores East,  Inc. The lease was entered into in January of 2000 and is for five
years.

         The Bank also owns 2.3 acres of land  located on Daniels  Bridge  Road,
1331st G.M.D., Oconee County, Georgia for future branch expansion.

         Management  of Oconee and the Bank believe  that all of its  properties
are adequately covered by insurance.

ITEM 3.  LEGAL PROCEEDINGS.


         Neither  Oconee  nor  the  Bank  is a party  to,  nor are any of  their
properties  the subject of, any material  legal  proceeding  other than ordinary
routine litigation incidental to Oconee's and the Bank's business.

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

                  No matters were submitted to a vote of the security holders of
Oconee during the fourth quarter of the fiscal year covered by the report.

                                     PART II

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

Markets for Capital Stock
-------------------------

         Oconee Stock is not traded on any  established  public trading  market.
Management is aware of 13 trades of Oconee Stock in 2000, aggregating 322 shares
in blocks  ranging from 2 to 60 shares at prices ranging from $144.00 to $169.00
per share.

         Management  is aware of 31 trades of Oconee Stock in 1999,  aggregating
845 shares in blocks  ranging from 1 share to 100 shares at prices  ranging from
$145.00 to $155.00 per share.

Holders
-------

         As of  December  31,  2000,  there were 594 holders of record of common
stock.

Dividends
---------

         In 2000 and 1999, Oconee declared cash dividends of $5.50 per share and
$5.00 per share  respectively,  payable to shareholders of record on December 31
of each year.  Oconee  intends to continue  paying cash  dividends  on an annual
basis.  Cash dividends for 2000 represented a payment of 40.1% of net income for
the year  compared to 40.8% for 1999.  The amount and  frequency of dividends is
determined  by  Oconee's  Board  of  Directors  in light  of  earnings,  capital
requirements  and the  financial  condition of the Bank.  See  "Supervision  and
Regulation -- Payment of Dividends."


                                       12
<PAGE>



ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        PLAN OF OPERATION FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999.

         This analysis of Oconee has been  prepared to provide  insight into the
financial  condition  of the  Company,  and  addresses  the  factors  which have
affected the Company's results of operations. The Company's financial statements
and  accompanying  notes which  follow are an  integral  part of this review and
should be read in conjunction with it.

SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
                                                             2000           1999          1998          1997         1996
                                                                             (AMOUNTS IN THOUSANDS.)
                                                        --------------- -------------- ------------ ------------- ------------
<S>                                                  <C>                     <C>          <C>          <C>           <C>
Net interest income                                  $       7,847           6,331        5,734        5,418         4,865
Other operating income                               $       1,417           1,328        1,283        1,080           949
Provision for loan losses                            $         387             116           61          166           281
Net income                                           $       2,467           2,203        2,032        1,705         1,506
Net income per common share                          $       13.71           12.24        11.29         9.47          8.37
Total assets                                         $     181,925         152,139      130,652      117,482       108,506
Cash dividends declared per common share             $        5.50            5.00         4.00         3.30          3.00
                                                        --------------- -------------- ------------ ------------- ------------
</TABLE>

         FINANCIAL  CONDITION - 2000 VS. 1999. During 2000, average total assets
increased  $25,403,000 (19%) over 1999. Average deposits  increased  $19,169,000
(16%) in 2000 over 1999. Average loans increased  $25,344,000 (29%) in 2000 over
1999.

         Year-end balances at December 31, 2000 and 1999 show increases in total
assets  of  $29,787,000  (20%)  from  1999 to  2000.  Total  deposits  increased
$14,010,000   (10%)  from  1999  to  2000  while  total  gross  loans  increased
$30,011,000  (32%) during 2000. Time deposits  increased  $16,082,000 (23%) from
1999 to 2000 while all other deposit  accounts  decreased  $2,072,000  (3%) from
1999 to 2000.  Loan demand  continued to increase due to a strong local economy.
These loan increases  were funded by increases in deposits,  sales of investment
securities,  and an  advance  from the  Federal  Home  Loan  Bank  during  2000.
Non-performing  assets at December 31, 2000 were $255,000 compared to $78,000 at
December 31, 1999. The majority of the increase is  attributable  to an increase
in nonaccrual  loans.  The increase in nonaccrual  loans is primarily due to two
borrowers  with  outstanding  loans  totaling  $175,000  who  were  involved  in
bankruptcy  proceedings at December 31, 2000.  There were no related party loans
which were considered non-performing at December 31, 2000.

         The Bank was most  recently  examined  for safety and  soundness by its
primary  regulatory  authority in October of 1999. There were no recommendations
by the regulatory  authority that, in management's  opinion,  will have material
effects on the Bank's liquidity, capital resources, or operations.

         RESULTS OF OPERATIONS - 2000 VS. 1999. The Company's earnings depend to
a large  degree on net  interest  income,  which is the  difference  between the
interest  income  received  from its earning  assets (such as loans,  investment


                                       13
<PAGE>

securities,  federal funds sold, etc.) and the interest expense which is paid on
deposit liabilities.

         Net  interest  income  in 2000,  which  was  $7,847,000,  increased  by
$1,516,000,  or 24%, over 1999.  The increase is primarily  attributable  to the
increase in interest and fees on loans  offset by increases in interest  expense
on time deposits.  Net yield on average  interest  earning assets (5.13% in 2000
and  4.98% in  1999)  increased  approximately  0.18% in 2000  from  1999.  This
increase was  attributable  to a 0.10%  increase in the net interest rate spread
from 1999 to 2000.

         The provision for loan losses in 2000 was $387,000 compared to $116,000
in 1999.  The  increase in the  provision  for loan losses was  attributable  to
growth  in the loan  portfolio  and  increases  in  non-performing  assets.  The
provision  for  loan  losses  continues  to  reflect  management's  estimate  of
potential loan losses inherent in the portfolio and the creation of an allowance
for loan losses to absorb such losses. The allowance for loan losses represented
approximately  1.5% of total loans  outstanding at December 31, 2000 compared to
1.6% at December 31, 1999.  Net  charge-offs  for 2000 were $48,055  compared to
$74,294 during 1999. A dedicated loan review function is utilized by the Company
which is supplemented by the use of an outside loan review specialist. All loans
$250,000 or more are  reviewed  annually  and placed into  various  loan grading
categories  which assist in developing lists of potential  problem loans.  These
loans are  regularly  monitored  by the loan  review  process  to  ensure  early
identification  of repayment  problems so that adequate  allowances  can be made
through the provision for loan losses.  Management believes that these levels of
allowance are  appropriate  based upon the Company's  loan portfolio and current
economic conditions.

         Other  operating  income in 2000 of $1,417,000  increased  from 1999 by
$89,000 or 7% due primarily to an increase of $116,000 or 17% in service charges
on deposit accounts.  The increase in service charges on deposit accounts is due
primarily  to an  increase in fees that the Bank  charged  during  2000,  and an
increase of $161,000 in commission  income on mortgage  loans.  These  increases
were  offset by  losses on sales of  investment  securities  totaling  $162,000,
resulting  from the sales of  securities  to fund loan growth.  Other  operating
expenses in 2000 of  $5,346,000  increased  by $840,000 or 19% over 1999 levels.
The increase in operating  expenses is  attributable  to an increase in salaries
and employee  benefits  expense of $542,000 or 20%.  This increase is due to the
Bank opening a new branch in January 2000,  experiencing  the first full year of
salaries  expense at the Loan Production  Office,  which opened in July 1999, as
well as merit increases for existing employees.  In addition,  occupancy expense
increased by $184,000 or 34%  primarily due to increased  rent and  depreciation
expense  associated  with  the  opening  of the  Wal-Mart  branch.  Also,  other
operating expenses increased by $114,000 or 9%.

         Income taxes  expressed as a percentage of earnings before income taxes
increased  from 27% in 1999 to 30% in 2000.  This  increase  relates  to a lower
amount of tax-free interest income from state,  county and municipal  investment
securities as compared to 1999.

         RESULTS OF  OPERATIONS  - 1999 VS. 1998.  Net interest  income in 1999,
which was $6,331,000  increased by $597,000,  or 10%, over 1998. The increase is
primarily  attributable  to the increase in interest and fees on loans offset by
increases in interest  expense on time deposits.  Net yield on average  interest
earning assets (4.98% in 1999 and 5.08% in 1998) decreased approximately .10% in
1999 from 1998.  This  decrease  was  associated  with an  increase  in interest
bearing  liabilities  relative to interest  earning assets,  offset in part by a
0.02% increase in the net interest rate spread.



                                       14
<PAGE>

         The provision for loan losses in 1999 was $116,000  compared to $60,720
in  1998.   The  increase  in  the  provision  for  loan  losses  was  primarily
attributable  to growth in the loan  portfolio.  The  provision  for loan losses
continues to reflect management's  estimate of potential loan losses inherent in
the  portfolio  and the creation of an allowance  for loan losses to absorb such
losses.  The allowance for loan losses  represented  approximately 1.6% of total
loans  outstanding  at December 31, 1999  compared to 1.9% at December 31, 1998.
Net  charge-offs  for 1999 were  $74,294  compared to net  recoveries  of $4,170
during 1998.

         Other  operating  income in 1999 of $1,328,000  increased  from 1998 by
$45,000 or 4% due  primarily  to an increase of $19,000 in ATM service  charges,
resulting  from two new ATM's  which were  placed in service  during 1999 and an
increase of $92,000 in commission  income on investment  sales.  These increases
were offset by a decrease in fee income on mortgage  loans of $79,000  from 1998
as a result of  rising  interest  rates on  mortgage  loans  which  resulted  in
decreased demand for these types of loans.  Other operating  expenses in 1999 of
$4,506,000  increased  by  $397,000  or 10% over 1998  levels.  The  increase in
operating  expenses is  attributable  to an increase  in salaries  and  employee
benefits expense of $244,000 or 10%. Also, other operating expenses increased by
$125,000 or 11% with $32,000 in costs attributed to Year 2000 compliance.

         Income taxes  expressed as a percentage of earnings before income taxes
decreased  from 29% in 1998 to 27% in 1999.  This  decrease  relates to a higher
amount of tax-free interest income from state,  county and municipal  investment
securities as compared to 1998.

         INVESTMENTS. The investment portfolio consists of debt securities which
provide the  Company  with a source of  liquidity  and a  long-term,  relatively
stable  source of income.  Additionally,  the  investment  portfolio  provides a
balance to  interest  rate and credit  risk in other  categories  of the balance
sheet  while  providing  a  vehicle  for  the  investment  of  available  funds,
furnishing liquidity,  and supplying securities to pledge as required collateral
for certain deposits.

         LIQUIDITY.  The Company must  maintain,  on a daily  basis,  sufficient
funds to cover the  withdrawals  from  depositors'  accounts  and to supply  new
borrowers with funds. To meet these obligations, the Company keeps cash on hand,
maintains account balances with its correspondent banks, and purchases and sells
federal funds and other short-term  investments.  Asset and liability maturities
are monitored in an attempt to match these to meet  liquidity  needs.  It is the
policy of the Company to monitor its liquidity to meet  regulatory  requirements
and their local funding requirements.

         The Company maintains  relationships with correspondent  banks that can
provide  funds to it on short  notice,  if needed.  Presently,  the  Company has
arrangements  with a  commercial  bank for short term  unsecured  advances up to
$4,400,000.  Additional  liquidity  is  provided  to the  Company  through  FHLB
advances up to $18,100,000.

         Cash  and  cash  equivalents   increased   $5,955,000  to  a  total  of
$22,083,000  at year-end  2000 as cash  provided  by  financing  activities  and
operating activities outpaced amounts used by investing activities. Cash inflows
from  operations  totaled  $2,853,000  in 2000,  while  inflows  from  financing
activities totaled $26,378,000,  most of which were net deposit increases during
2000 of  $14,010,000  and an increase in  borrowings  from the Federal Home Loan
Bank of $13,300,000.



                                       15
<PAGE>

         Investing  activities  used  $23,276,000 of cash and cash  equivalents,
principally composed of net advances of loans to customers of $30,059,000 during
2000,  offset by  proceeds  from the  sales of  investment  securities  totaling
$8,848,000.

         CAPITAL  RESOURCES.  The Company continues to maintain adequate capital
ratios.  The following tables present the Company's  regulatory capital position
at December 31, 2000
<TABLE>
<CAPTION>
                                                                  Risk-Based Capital Ratios
                                                               Actual as of December 31, 2000
                                                               ------------------------------
         <S>                                                              <C>
         Tier 1 Capital                                                   11.4%
         Tier 1 Capital minimum requirement                                4.0%
                                                                          -----
         Excess                                                            7.4%
                                                                          =====

         Total Capital                                                    12.7%
         Total Capital minimum requirement                                 8.0%
                                                                         ------
         Excess                                                            4.7%
                                                                         ======

                                                           Leverage Ratio As of December 31, 2000
                                                           --------------------------------------

         Tier 1 Capital to average total assets                            8.6%
         Minimum leverage requirement                                      3.0%
                                                                         ------
         Excess                                                            5.6%
                                                                         ======

</TABLE>

         For a more complete discussion of the actual and required ratios of the
Company,  see note 11 to the consolidated  financial statements and "Supervision
and Regulation - Capital Adequacy."

         ASSET/LIABILITY  AND INTEREST RATE  SENSITIVITY  MANAGEMENT.  It is the
Company's  objective 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 that are designed
to ensure acceptable  composition of the asset/liability  mix. It is the overall
philosophy of management to support  asset growth  primarily  through  growth of
core  deposits,   which  include  deposits  of  all  categories  made  by  local
individuals,  partnerships and  corporations.  The objective of the policy is to
control  interest  sensitive assets and liabilities so as to minimize the impact
of substantial movements in interest rates on earnings.

         The  asset/liability  mix is  monitored  on a regular  basis.  A report
reflecting the interest sensitive assets and interest  sensitive  liabilities is
prepared and presented to the Board of Directors of the Bank on a monthly basis.

         The  absolute  level  and  volatility  of  interest  rates  can  have a
significant  impact on Oconee's  profitability.  The  objective of interest rate
risk management is to identify and manage the sensitivity of net interest income
to changing  interest  rates,  in order to achieve  Oconee's  overall  financial
goals.   Based  on  economic   conditions,   asset  quality  and  various  other
considerations,  management  establishes  tolerance  ranges  for  interest  rate
sensitivity and manages within these ranges.


                                       16
<PAGE>

         Oconee uses income simulation  modeling as a tool in measuring interest
rate risk and managing interest rate sensitivity.  Simulation modeling considers
not only the impact of changing  market rates of interest on future net interest
income, but also other potential causes of variability.

         Interest   rate   sensitivity   is  a   function   of   the   repricing
characteristics of Oconee's portfolio of assets and liabilities. These repricing
characteristics are the time frames within which the interest earning assets and
liabilities  are  subject to change in  interest  rates  either at  replacement,
repricing  or  maturity  during  the  life  of the  instruments.  Interest  rate
sensitivity  management  focuses  on  the  maturity  structures  of  assets  and
liabilities  and their  repricing  characteristics  during  periods of change in
market interest rates.  Interest rate  sensitivity is measured as the difference
between the volumes of assets and liabilities in Oconee's current portfolio that
are subject to  repricing  at various  time  horizons:  immediate;  one to three
months;  four to twelve  months;  one to five years;  over five years,  and on a
cumulative basis. The differences are known as interest rate sensitivity gap.

         One method to measure a bank's  interest  rate  exposure is through its
repricing gap. The gap is calculated by citing all  liabilities  that reprice or
taking  all  assets  that  reprice  or  mature  within a given  time  frame  and
subtracting all liabilities  that reprice or mature within that time frame.  The
difference  between these two amounts is called the "gap",  the amount of either
liabilities  or  assets  that will  reprice  without  a  corresponding  asset or
liability repricing.

         A negative  gap (more  liabilities  repricing  than  assets)  generally
indicates  that the bank's net interest  income will decrease if interest  rates
rise and will  increase  if  interest  rates  fall.  A  positive  gap  generally
indicates  that the bank's net interest  income will  decrease if rates fall and
will increase if rates rise.

         Oconee also measures its  short-term  exposure to interest rate risk by
simulating  the impact to net interest  income under several rate change levels.
Interest-earning  assets and  interest-bearing  liabilities  are rate shocked to
stress test the impact to the Bank's net  interest  income and margin.  The rate
shock  levels span three 100 basis  point  increments  up and down from  current
interest rates.

         The following table summarizes the amounts of  interest-earning  assets
and  interest-bearing  liabilities  outstanding  at  December  31, 2000 that are
expected to mature,  prepay or reprice in each of the future time periods shown.
Except as stated  below,  the  amount of assets or  liabilities  that  mature or
reprice  during a  particular  period  was  determined  in  accordance  with the
contractual terms of the asset or liability.  Adjustable rate loans are included
in the period in which  interest  rates are next scheduled to adjust rather than
in the  period in which they are due,  and fixed rate loans and  mortgage-backed
securities  are  included  in the  periods in which they are  anticipated  to be
repaid  based on  scheduled  maturities.  The  Company's  savings  accounts  and
interest-bearing demand accounts (NOW and money market deposit accounts),  which
are generally subject to immediate withdrawal, are included in the "Three Months
or Less" category,  although historical  experience has proven these deposits to
be more stable over the course of a year.



                                       17
<PAGE>
<TABLE>
<CAPTION>
                                                                                  At December 31, 2000
                                                                                Maturing or Repricing in
                                                                                ------------------------
                                                                                 (dollars in thousands)

                                                   Three           Four Months
                                                   Months                to           1 to 5           Over 5
                                                   or Less          12 Months          Years            Years            Total
                                                  --------            ------            ------           ------          -------
<S>                                               <C>                 <C>               <C>              <C>             <C>
Interest-earning assets:
  Interest-bearing deposits with banks            $    100              --                --               --                100
  Investment securities                                245               348             3,843           25,621           30,057
  Federal funds sold                                16,990              --                --               --             16,990
  Loans                                             44,620            33,738            44,780              203          123,341
                                                  --------            ------            ------           ------          -------
     Total interest-bearing assets                $ 61,955            34,086            48,623           25,824          170,488
                                                  --------            ------            ------           ------          -------
Interest-bearing liabilities:
  Deposits:
  Savings and demand                              $ 45,188              --                --               --             45,188
  Time deposits                                     18,284            45,121            21,880             --             85,285
  Federal Home Loan Bank advances                     --                --              13,300             --             13,300
  Repurchase agreements                                836              --                --               --                836
                                                  --------            ------            ------           ------          -------

Total interest-bearing liabilities                $ 64,308            45,121            35,180             --            144,609
                                                  --------            ------            ------           ------          -------
Interest sensitive difference per period            (2,353)          (11,035)           13,443           25,824           25,879
                                                  --------            ------            ------           ------          -------
Cumulative interest sensitivity difference          (2,353)          (13,388)               55           25,879
                                                  --------            ------            ------           ------          -------
Cumulative difference to total assets                (1.3%)            (7.4%)            0.0%            14.2%
                                                  --------            ------            ------           -----
</TABLE>


         At December 31, 2000 the difference  between the Company's  liabilities
and assets  repricing  or maturing  within one year was  $13,388,000.  Due to an
excess of liabilities  repricing or maturing within one year, a rise in interest
rates would cause the Company's net interest income to decline.

         Certain  shortcomings are inherent in the method of analysis  presented
in the foregoing table. For example, although certain assets and liabilities may
have similar  maturities  or periods to  repricing,  they may react in different
degrees or at  different  points in time to changes  in market  interest  rates.
Additionally,  certain assets, such as adjustable-rate  mortgages, have features
that restrict changes in interest rates, both on a short-term basis and over the
life of the asset. Changes in interest rates, prepayment rates, early withdrawal
levels and the ability of borrowers to service their debt,  among other factors,
may change significantly from the assumptions made in the table.

         INFLATION.  Inflation impacts the growth in total assets in the banking
industry  and causes a need to  increase  equity  capital at higher  than normal
rates to meet capital adequacy requirements.  The Company copes with the effects
of  inflation  through the  management  of its  interest  rate  sensitivity  gap
position,  by  periodically  reviewing  and adjusting its pricing of services to
consider current costs, and through managing its level of net earnings  relative
to its dividend payout policy.



                                       18
<PAGE>

SELECTED STATISTICAL INFORMATION

         The following section presents statistical  information for the Company
which supplements the financial data discussed elsewhere herein.

INDEX TO SELECTED STATISTICAL INFORMATION

         Table 1 Average Balances and Interest Rates
         Table 2 Volume-Rate Analysis
         Table 3 Investment Portfolio
         Table 4 Loan Portfolio
         Table 5 Allowance for Loan Losses
         Table 6 Deposits
         Table 7 Selected Ratios

         Average  balances  contained  in  the  following  selected  statistical
information generally represent average daily balances for all periods.



                                       19
<PAGE>



TABLE 1

AVERAGE BALANCE SHEETS AND INTEREST RATES

The table  below shows the  year-to-date  average  balance for each  category of
interest  earning  assets and  interest-bearing  liabilities  for the  indicated
periods and the average rate of interest earned or paid thereon.
<TABLE>
<CAPTION>

                                                                                         For the Years Ended December 31,

                                                                       2000                                      1999
                                                      --------------------------------------   -------------------------------------
                                                          Average                     Yield/    Average                      Yield/
                                                          Balance        Interest      Rate     Balance        Interest       Rate
                                                       -------------    ----------    -----   -------------    ---------      ----
<S>                                                    <C>             <C>            <C>      <C>            <C>            <C>
Assets:
Interest earning assets:
   Interest earning deposits                                  76,230         5,206    6.83%         --           --           --

   Investment securities:
      Taxable                                             19,706,949     1,356,630     6.88%     18,573,453    1,163,116      6.26%
      Non-taxable                                         14,562,470       752,648     5.17%     16,219,209      808,336      4.98%
   Federal funds sold                                      6,325,574       404,551     6.40%      5,561,260      294,214      5.28%
   Loans (including loan fees)                           112,270,626    11,518,428    10.26%     86,926,333    8,379,754      9.65%
                                                       -------------    ----------    -----   -------------    ---------      ----
Total interest-earning assets                            152,941,849    14,037,463     9.18%    127,280,255   10,645,420      8.37%

Allowance for loan losses                                 (1,596,322)                            (1,424,606)
Cash and due from banks                                    4,332,515                              5,324,326
Other assets                                               5,092,932                              4,188,340
                                                       -------------                          -------------
      Total assets                                     $ 160,770,974                          $ 135,368,315
                                                       =============                          =============

Liabilities and stockholders' equity:
Interest-bearing liabilities:
   Deposits:
      Interest-bearing demand                             35,981,339     1,180,610     3.28%     35,025,775    1,045,860      2.99%
      Savings                                              9,579,717       195,484     2.04%      9,606,416      192,028      2.00%
      Time                                                74,724,850     4,435,334     5.94%     57,723,166    3,041,875      5.27%
Federal Funds Purchased                                      442,514        29,310     6.62%        136,877        5,295      3.87%
Federal Home Loan Bank Advances                            4,715,027       303,995     6.45%
Securities sold under repurchase agreements                1,161,681        45,593     3.92%        779,715       29,207      3.75%
                                                       -------------    ----------    -----   -------------    ---------      ----
      Total interest bearing liabilities                 126,605,128     6,190,326     4.89%    103,271,949    4,314,265      4.18%

Non-interest bearing deposits                             19,513,375                             18,275,259
Other liabilities                                            523,064                                599,312
                                                       -------------                          -------------
Total liabilities                                        146,641,567                            122,146,520

Stockholders' equity                                      14,129,407                             13,221,795
                                                       -------------                          -------------
      Total  liabilities  and  stockholders' equity    $ 160,770,974                          $ 135,368,315
                                                       =============                          =============

Excess of interest-bearing assets over
   interest-bearing liabilities                           26,336,721                             24,008,306
                                                       =============                          =============
Ratio of interest-earning assets to interest                  120.80%                               123.25%
-bearing liabilities
Net interest income                                                     7,847,137                                6,331,155
Net interest spread                                                                  4.29%                                     4.19%
Net  interest  yield  on  interest  earning assets                                   5.13%                                     4.98%
</TABLE>


(continued)


<TABLE>
<CAPTION>

                                                                                1998
                                                         --------------------------------------------------
                                                              Average                               Yield/
                                                              Balance            Interest            Rate
                                                         ---------------        -----------         -------
<S>                                                      <C>                    <C>                 <C>
Assets:
Interest earning assets:
   Interest earning deposits                                    --                 --                   --
   Investment securities:
      Taxable                                                 16,607,049          1,051,887            6.33%
      Non-taxable                                             13,976,265            704,153            5.04%
   Federal funds sold                                          6,201,576            340,869            5.50%
   Loans (including loan fees)                                76,117,421          7,676,432           10.09%
                                                         ---------------        -----------         -------
Total interest-earning assets                                112,902,311          9,773,341            8.66%

Allowance for loan losses                                     (1,371,765)
Cash and due from banks                                        3,516,984
Other assets                                                   3,912,157
                                                         ---------------
      Total assets                                       $   118,959,687
                                                         ===============

Liabilities and stockholders' equity:
Interest-bearing liabilities:
   Deposits:
      Interest-bearing demand                                 26,784,495            771,894            2.88%
      Savings                                                  8,741,058            203,929            2.33%
      Time                                                    53,995,027          3,043,214            5.64%
Federal Funds Purchased                                             --                 --                --
Federal Home Loan Bank Advances
Securities sold under repurchase agreements                      510,940             20,499            4.01%
                                                         ---------------        -----------         -------
      Total interest bearing liabilities                      90,031,520          4,039,536            4.49%

Non-interest bearing deposits                                 15,970,054
Other liabilities                                                724,339
                                                         ---------------
Total liabilities                                            106,725,913

Stockholders' equity                                          12,233,774
                                                         ---------------
      Total  liabilities  and  stockholders' equity      $   118,959,687
                                                         ===============

Excess of interest-bearing assets over
   interest-bearing liabilities                               22,870,791
                                                         ===============
Ratio of interest-earning assets to interest                     125.40%
-bearing liabilities
Net interest income                                                                5,733,805
Net interest spread                                                                                    4.17%
Net  interest  yield  on  interest  earning assets                                                     5.08%
</TABLE>




Non-accrual  loans and the interest income which was recorded on these loans, if
any, are included in the yield  calculation  for loans in all periods  reported.
Tax-exempt  income is not  calculated on a  tax-equivalent  basis.  Loan fees of
$637,275,  $433,240, and $334,383 are included in the yields for 2000, 1999, and
1998, respectively.



                                       20
<PAGE>

TABLE 2
VOLUME-RATE ANALYSIS

The  following  tables  show a summary  of the  changes in  interest  income and
interest expense  resulting from changes in volume and changes in rates for each
major category of interest earning assets and  interest-bearing  liabilities for
2000 over 1999 and 1999 over 1998.

<TABLE>
<CAPTION>
                                                                  2000 OVER 1999
                                                      INCREASE (DECREASE) DUE TO CHANGES IN:
                                                -----------------------------------------------
                                                   VOLUME              RATE               TOTAL
<S>                                             <C>                  <C>             <C>
Interest income on:
   Investment securities
     Interest-earning deposits                      5,206               --               5,206
     Taxable                                      106,885             86,629           193,514
     Non-taxable                                  (85,627)            29,939           (55,688)
Federal funds sold                                 48,822             61,515           110,337
Loans (including loan fees)                     2,598,431            540,243         3,138,674
                                               ----------         ----------        ----------
     Total interest earning assets              2,673,717            718,326         3,392,043
                                               ----------         ----------        ----------
Interest expense on:
   Deposits:
     Interest bearing demand                       68,505             66,245           134,750
     Savings                                         (544)             4,000             3,456
     Time                                       1,050,886            342,573         1,393,459
  Securities sold under repurchase
  agreements                                        8,027              8,359            16,386
  Federal funds purchased                          20,244              3,771            24,015
  Federal Home Loan Bank
  Advances                                        303,995               --             303,995
                                               ----------         ----------        ----------
     Total interest bearing liabilities
                                                1,451,113            424,948         1,876,061
                                               ----------         ----------        ----------
</TABLE>


Note:    Rate/volume  variances were allocated between rate variances and volume
         variances using a weighted average allocation method.



                                       21
<PAGE>


TABLE 2

VOLUME-RATE ANALYSIS (CONTINUED)
<TABLE>
<CAPTION>
                                                                  1999 OVER 1998
                                                      INCREASE (DECREASE) DUE TO CHANGES IN:
                                               -------------------------------------------------
                                                 VOLUME               RATE               TOTAL
<S>                                             <C>                  <C>             <C>
Interest income on:
   Investment securities
     Taxable                                      131,505            (20,276)           111,229
     Non-taxable                                  113,687             (9,504)           104,183
Federal funds sold                                (32,945)           (13,710)           (46,655)
Loans (including loan fees)                     1,050,369           (347,047)           703,322
                                               ----------         ----------         ----------

     Total interest earning assets              1,262,616           (390,537)           872,079
                                               ----------         ----------         ----------
Interest expense on:
   Deposits:
     Interest bearing demand                      238,076             35,889            273,965
     Savings                                       17,776            (29,677)           (11,901)
     Time                                         203,301           (204,637)            (1,336)
  Federal funds purchased                            --                5,295              5,295
  Securities sold under repurchase
  agreements                                        8,708               --                8,708
                                               ----------         ----------         ----------
     Total interest bearing liabilities           467,861           (193,130)           274,731
                                               ----------         ----------         ----------
</TABLE>


Note:    Rate/volume  variances were allocated between rate variances and volume
         variances using a weighted average allocation method.


                                       22
<PAGE>


TABLE 3
INVESTMENT PORTFOLIO

The following  table  presents the carrying  value of investments by category at
December 31, 2000, 1999, and 1998:

<TABLE>
<CAPTION>
                                                      2000               1999               1998
                                                  -----------        -----------        -----------
<S>                                               <C>                <C>                <C>
HELD TO MATURITY (AT AMORTIZED COST)

     State, county and municipal                  $      --          $      --          $15,303,990


AVAILABLE FOR SALE

     State, county and municipal                  $12,738,644        $16,113,705        $      --
     United States treasuries and agencies          9,448,516          8,248,061          6,291,116
     Mortgage-backed                                7,870,038         12,895,247         13,764,308
                                                  -----------        -----------        -----------
       Totals                                     $30,057,198        $37,257,013        $20,055,424
                                                  ===========        ===========        ===========
</TABLE>



The following  table  presents the  maturities of all  investment  securities at
carrying  value and the  weighted  average  yields for each range of  maturities
presented.

<TABLE>
<CAPTION>
Maturities at                                     United States        Mortgage-          State, County      Weighted
December 31, 2000                                 Treasury and           Backed              and             Average
                                                    Agencies           Securities         Municipal          Yields
                                                    --------           ----------         ---------          ------
<S>                                                  <C>                <C>               <C>                <C>
     Within 1 year                                     --                   --              450,256          7.88%
     After 1 through 5 years                         2,040,367              --            1,802,749          6.90%
     After 5 through 10 years                        6,573,996              --            1,737,241          7.04%
     After 10 years                                    834,153           7,870,038        8,748,398          6.85%
                                                     ---------           ---------       ----------         -----
         Totals                                      9,448,516           7,870,038       12,738,644
                                                     =========           =========       ==========
</TABLE>


Mortgage  backed  securities are included in the maturities  categories in which
they are anticipated to be repaid based on scheduled maturities.



                                       23
<PAGE>


TABLE 4
LOAN PORTFOLIO

The following table presents loans by type at the end of the last 5 years.
<TABLE>
<CAPTION>
                                       2000                  1999                  1998               1997               1996
                                  -------------         -------------         -------------       -------------      -------------
<S>                               <C>                   <C>                   <C>                 <C>                <C>
Commercial, financial and
agricultural                      $  16,487,028         $  12,714,342         $  11,332,765       $  10,570,994      $   9,792,533
Real estate - construction           29,663,443            28,310,935            16,925,962          13,824,372         16,836,092
Real estate - mortgage               64,214,266            40,222,371            38,942,845          38,748,388         34,511,657
Consumer                             12,976,318            12,082,629             9,578,312           9,129,134          7,680,871
                                  -------------         -------------         -------------       -------------      -------------
                                    123,341,055            93,330,277            76,779,884          72,272,888         68,821,153
Less:  Allowance for loan
   losses                            (1,807,671)           (1,469,126)           (1,427,420)         (1,362,530)        (1,202,201)
                                  -------------         -------------         -------------       -------------      -------------
Loans, net                        $ 121,533,384         $  91,861,151         $  75,352,464       $  70,910,358      $  67,618,952
                                  =============         =============         =============       =============      =============
</TABLE>




At December 31, 2000, maturities of loans in the indicated  classifications were
as follows:

                               Commercial,          Real
                              Financial and        Estate
Maturity                      Agricultural      Construction          Total
--------                      ------------      ------------          -----

        Within 1 year        $ 8,666,497        $25,396,534        $34,063,031
        1 to 5 years           7,564,258          4,266,909         11,831,167
        Over 5 years             256,273               --              256,273
                             -----------        -----------        -----------
            Totals           $16,487,028        $29,663,443        $46,150,471
                             ===========        ===========        ===========


As of  December  31,  2000,  the  interest  terms  of  loans  in  the  indicated
classifications for the indicated maturity ranges are as follows:

<TABLE>
<CAPTION>
                                                Fixed              Variable
                                              Interest             Interest
                                                Rates                Rates            Total
                                                -----                -----            -----

<S>                                           <C>               <C>               <C>
Commercial, financial and agricultural
1 to 5 years                                  $6,761,361        $  802,897        $7,564,258
Over 5 years                                  $  256,273              --          $  256,273

Real estate construction

1 to 5 years                                        --          $4,266,909        $4,266,909
Over 5 years                                        --                --                --
</TABLE>


                                       24
<PAGE>



TABLE 4


LOAN PORTFOLIO (CONTINUED)

The following  summarizes  past-due and non-accrual loans, other real estate and
repossessions  and income that would have been reported on non-accrual  loans as
of December 31, 2000, 1999, 1998, 1997, and 1996:

<TABLE>
<CAPTION>
                                                                              December 31,
                                                     2000            1999           1998           1997          1996
                                                     ----            ----           ----           ----          ----

<S>                                                  <C>            <C>             <C>            <C>           <C>
Other real estate and repossessions                  37,265         53,398          40,000         40,000        40,000
Accruing loans 90 days or more past due                 586              -             530          -             -
Non-accrual loans                                   217,919         25,010          30,571          4,000       278,000
Interest on non-accrual  loans which would
have been reported                                    7,200            200           1,500            200        19,000
</TABLE>


A loan is placed on  non-accrual  status when,  in  management's  judgment,  the
collection of interest  appears  doubtful.  As a result of management's  ongoing
review of the loan portfolio, loans are classified as non-accrual generally when
they are past  due in  principal  and  interest  for more  than 90 days or it is
otherwise not  reasonable to expect  collection of principal and interest  under
the original  terms.  Exceptions are allowed for 90 day past due loans when such
loans  are well  secured  and in  process  of  collection.  Generally,  payments
received on non-accrual loans are applied directly to principal.



                                       25
<PAGE>



TABLE 5
ALLOWANCE FOR LOAN LOSSES

The following  table  summarizes  information  concerning the allowance for loan
losses:
<TABLE>
<CAPTION>

                                                           2000           1999            1998             1997            1996
                                                                       (Amounts are presented in thousands)
<S>                                                      <C>             <C>             <C>              <C>             <C>
Balance at beginning of year                             $ 1,469         $ 1,427         $ 1,363          $ 1,202         $ 1,020
Charges-offs:
     Commerce, financial and agricultural                     69              29              18                4              83
     Installment                                              29              74              74               30              47
                                                         -------         -------         -------          -------         -------
         Total charge-offs                                    98             103              92               34             130
                                                         -------         -------         -------          -------         -------
Recoveries:
     Commerce, financial and agricultural                     31              17              73                4               5
     Installment                                              19              12              23               25              26
                                                         -------         -------         -------          -------         -------
         Total recoveries                                     50              29              96               29              31
                                                         -------         -------         -------          -------         -------
Net charge-offs (recoveries)                                  48              74              (4)               5              99

Provisions charged to operations                             387             116              60              166             281
                                                         -------         -------         -------          -------         -------
Balance at end of year                                   $ 1,808         $ 1,469         $ 1,427          $ 1,363         $ 1,202
                                                         =======         =======         =======          =======         =======


Ratios of net charge-offs (recoveries) during the
     period to average loans outstanding during
     the period                                              .04%            .09%           (.01%)            .01%            .15%
                                                         =======         =======         =======          =======         =======
</TABLE>

The Company has a dedicated loan review function. All loans $250,000 or more are
reviewed  annually and placed into various loan grading  categories which assist
in  developing  lists of  potential  problem  loans.  These loans are  regularly
monitored  by the  loan  review  function  to  ensure  early  identification  of
deterioration.  The formal allowance for loan loss adequacy test is performed at
each  calendar  quarter end.  Specific  amounts of loss are estimated on problem
loans  and  historical  loss  percentages  are  applied  to the  balance  of the
portfolio using certain portfolio stratifications.  Additionally, the evaluation
takes into consideration such factors as changes in the nature and volume of the
loan portfolio, current economic conditions, regulatory examination results, and
the existence of loan concentrations.



                                       26
<PAGE>


TABLE 6
DEPOSITS

The average  balance of the deposits and the average rates paid on such deposits
are summarized for the periods indicated in the following table.

<TABLE>
<CAPTION>

                                                                        December 31,
                                             2000                           1999                           1998
                                  --------------------------   ---------------------------       --------------------------
<S>                               <C>                <C>       <C>                  <C>          <C>                 <C>
Deposits:
Non-interest bearing demand       $  19,513,375       --       $ 18,275,259          --          $  15,970,054         --
Interest bearing demand              35,981,339      3.28%       35,025,775          2.99%          26,784,495        2.88%
Savings                               9,579,717      2.04%        9,606,416          2.00%           8,741,058        2.33%

Time                                 74,724,850      5.94%       57,723,166          5.27%          53,995,027        5.64%
                                 --------------      ----      ------------          ----         ------------        ----

                                 $  139,799,281                $120,630,616                      $ 105,490,634
                                 ==============                ============                      =============
</TABLE>



Maturities of time  certificates  of deposit of $100,000 or more  outstanding at
December 31, 2000 are summarized as follows:

Within 3 months                                           $ 4,481,527
After 3 through 6 months                                    4,985,821
After 6 through 12 months                                   7,818,151
After 12 months                                             6,857,769
                                                         ------------
                                                         $ 24,143,268
                                                         ============


                                       27
<PAGE>



TABLE 7
SELECTED RATIOS

The  following  table  sets out  certain  ratios  of the  Company  for the years
indicated.

                                             2000          1999           1998
                                             ----          ----           ----
Net income to:
     Average stockholders' equity           17.46%        16.66%        16.61%
     Average assets                          1.53%         1.63%         1.71%
Dividends to net income                     40.13%        40.85%        35.43%
Average equity to average assets             8.79%         9.77%        10.28%



                                       28
<PAGE>


ITEM 7.  FINANCIAL STATEMENTS.

         The financial statements and the report of independent  accountants are
included in this report beginning at page F-1 of this Form 10-KSB.

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

         During the Bank's two most recent fiscal years, the Bank did not change
accountants  and had no  disagreement  with its  accountants  on any  matters of
accounting principles or practices or financial statement disclosure.

                                    PART III

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

         The  information   contained  under  the  headings  "Information  About
Nominees For Directors and Executive  Officers,"  and  "Compliance  with Section
16(a)" in the  definitive  Proxy  Statement  to be used in  connection  with the
solicitation  of proxies for the Company's  annual meeting of shareholders to be
held on May 7, 2001 to be filed  with the  Securities  and  Exchange  Commission
("SEC"), is incorporated herein by reference.

ITEM 10. EXECUTIVE COMPENSATION.

         The information contained under the heading "Executive Compensation" in
the definitive Proxy Statement to be used in connection with the solicitation of
proxies for the Bank's annual meeting of shareholders to be held on May 7, 2001,
to be filed with the SEC, is incorporated herein by reference.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The information  contained under the heading  "Beneficial  Ownership of
Securities and Voting Rights" in the  definitive  Proxy  Statement to be used in
connection with the solicitation of proxies for the Company 's annual meeting of
shareholders  to be  held  on  May  7,  2001,  to be  filed  with  the  SEC,  is
incorporated herein by reference.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         The information contained under the heading "Certain  Relationships and
Related  Transaction" in the definitive Proxy Statement to be used in connection
with the  solicitation  of  proxies  for all the  Company  's annual  meeting of
shareholders  to be  held  on  May  7,  2001,  to be  filed  with  the  SEC,  is
incorporated herein by reference.



                                       29
<PAGE>

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

         (a)      Financial Statements.
                  ---------------------

                  The following  financial  statements  and notes thereto of the
              Registrant  are located  beginning at page F-1 of this Form 10-KSB
              pursuant to Item 7 of this Report:

                  1.    Report of Independent Certified Public Accountants
                  2.    Balance Sheets  - December 31, 2000 and 1999
                  3.    Statements of Earnings
                           For the Years Ended December 31, 2000, 1999, and 1998
                  4.    Statements of Changes in Stockholders Equity
                           For the Years Ended December 31, 2000, 1999, and 1998
                  5.    Statements of Cash Flows
                           For the Years Ended December 31, 2000, 1999, and 1998
                  6.    Notes to Financial Statements



                                       30
<PAGE>


The  following  exhibits  are required to be filed with this Report on 10-KSB by
Item 601 of Regulation S-B.

3.1      Articles of Incorporation of Oconee Financial Corporation, dated August
         27, 1998.  (included as Exhibit 3.1 to the Bank's 10-KSB filed with the
         SEC on March 30, 1999 and incorporated hereby reference).

3.2      Bylaws of Oconee Financial Corporation, dated August 27, 1998 (included
         as  Exhibit  3.2 to the Bank's  10-KSB  filed with the SEC on March 30,
         1999 and incorporated hereby reference).

4.       See   Exhibits  3.1  and  3.2  for   provisions   of  the  Articles  of
         Incorporation  and Bylaws  which  define  the rights of the  holders of
         Common Stock of the Bank.

4.1      Form of Common Stock Certificate (included as Exhibit 4.1 to the Bank's
         10-KSB  filed with the SEC on March 30,  1999 and  incorporated  hereby
         reference).

10.1     Oconee State Bank 401 (k) Savings Incentive Plan (included as Exhibit 3
         to  the  Bank's  F-1  filed  with  the  FDIC  on  April  30,  1997  and
         incorporated hereby reference.)

10.2     Oconee State Bank  Officer's Cash Incentive Plan (included as Exhibit 3
         to  the  Bank's  F-1  filed  with  the  FDIC  on  April  30,  1997  and
         incorporated hereby reference.)

21.      Subsidiaries of Oconee Financial  Corporation.  (included as Exhibit 21
         to the  Bank's  10-KSB  filed  with  the  SEC on  March  30,  1999  and
         incorporated hereby reference).

24.      Power of Attorney (included herein on signature page).



         (b)      REPORTS ON FORM 8-K.

         The Bank did not file any reports on Form 8-k during the fourth quarter
of 2000.



                                       31
<PAGE>
                          OCONEE FINANCIAL CORPORATION
                       CONSOLIDATED FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

                         Index to Financial Statements


Report of Independent Certified Public Accountants                     F-2
Consolidated Balance Sheets December 31, 2000 and 1999                 F-3
Consolidated Statements of Earnings for the years
   ended December 31, 2000, 1999 and 1998                              F-4
Consolidated Statements of Comprehensive Income for the
   years ended December 31, 2000, 1999 and 1998                        F-5
Consolildated Statements of Changes in Stockholders' Equity
   for the years ended December 31, 2000, 1999 and 1998                F-6
Consolidated Statements of Cash Flows for the years
   ended December 31, 2000, 1999 and 1998                              F 7-8
Notes to Consolidated Financial Statements                             F 9-20

<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders
Oconee Financial Corporation:


We have audited the accompanying consolidated balance sheets of Oconee Financial
Corporation  and  subsidiary  as of December 31, 2000 and 1999,  and the related
consolidated   statements  of  earnings,   comprehensive   income,   changes  in
stockholders'  equity and cash  flows for each of the three  years in the period
ended December 31, 2000. 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  generally   accepted  auditing
standards.  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 consolidated  financial statements referred to above present
fairly,  in all material  respects,  the financial  position of Oconee Financial
Corporation  and subsidiary as of December 31, 2000 and 1999, and the results of
their  operations and their cash flows for each of the three years in the period
ended  December 31, 2000,  in  conformity  with  generally  accepted  accounting
principles.


/s/Porter Keadle Moore, LLP


Atlanta, Georgia
February 23, 2001


                                      F-2
<PAGE>


                                            OCONEE FINANCIAL CORPORATION

                                            CONSOLIDATED BALANCE SHEETS

                                             DECEMBER 31, 2000 AND 1999
<TABLE>
<CAPTION>

                                                       Assets

                                                                                     2000                 1999
                                                                                 ------------         ------------
<S>                                                                             <C>                       <C>

Cash and due from banks, including reserve
   requirements of $1,111,000 and $1,453,000                                    $   4,992,978             6,437,789
Interest-bearing deposits with banks                                                  100,000                  --
Federal funds sold                                                                 16,990,000             9,690,000
                                                                                -------------         -------------
           Cash and cash equivalents                                               22,082,978            16,127,789
Investment securities available for sale                                           30,057,198            37,257,013
Other investments                                                                     765,429               492,629
Mortgage loans held for sale                                                        2,278,613             1,867,390
Loans, net                                                                        121,533,384            91,861,151
Premises and equipment, net                                                         2,218,729             1,625,990
Accrued interest receivable and other assets                                        2,988,828             2,906,606
                                                                                -------------         -------------

                                                                                $ 181,925,159           152,138,568
                                                                                =============         =============

                                        Liabilities and Stockholders' Equity

Deposits:
   Demand                                                                       $  20,064,661            18,735,537
   Interest-bearing demand                                                         37,189,965            37,398,067
   Savings                                                                          7,997,824            11,190,553
   Time                                                                            85,285,167            69,203,052
                                                                                -------------         -------------

           Total deposits                                                         150,537,617           136,527,209

Securities sold under repurchase agreements                                           836,087               865,908
Federal Home Loan Bank advances                                                    13,300,000                  --
Accrued interest payable and other liabilities                                      2,196,120             1,730,832
                                                                                -------------         -------------

           Total liabilities                                                      166,869,824           139,123,949
                                                                                -------------         -------------

Stockholders' equity:
   Common stock, par value $10, authorized 300,000 shares,
     issued and outstanding 179,977 in 2000 and 179,994 in 1999                     1,799,770             1,799,940
   Additional paid-in capital                                                       4,246,832             4,249,160
   Retained earnings                                                                9,178,677             7,701,769
   Accumulated other comprehensive loss                                              (169,944)             (736,250)
                                                                                -------------         -------------

           Total stockholders' equity                                              15,055,335            13,014,619
                                                                                -------------         -------------

                                                                                $ 181,925,159           152,138,568
                                                                                =============         =============
</TABLE>





See accompanying notes to consolidated financial statements.

                                                        F-3
<PAGE>
<TABLE>
<CAPTION>
                                                    OCONEE FINANCIAL CORPORATION

                                                 CONSOLIDATED STATEMENTS OF EARNINGS

                                        FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

                                                                               2000                   1999                   1998
                                                                           ------------           ------------          ------------
<S>                                                                        <C>                       <C>                   <C>
Interest income:
   Interest and fees on loans                                              $ 11,518,428              8,379,754             7,676,432
   Interest on federal funds sold                                               404,551                294,214               340,869
   Interest on investment securities:
     U. S. Treasuries                                                            12,256                116,719               204,356
     U. S. Government agencies                                                1,344,374              1,046,094               847,531
     State, county and municipal                                                752,648                808,336               704,153
   Interest on interest bearing deposits                                          5,206                    303                  --
                                                                           ------------           ------------          ------------
              Total interest income                                          14,037,463             10,645,420             9,773,341
                                                                           ------------           ------------          ------------

Interest expense:
   Interest-bearing demand deposits                                           1,180,610              1,045,860               771,894
   Savings deposits                                                             195,484                192,028               203,929
   Time deposits                                                              4,435,334              3,041,875             3,043,214
    Federal Home Loan Bank advances                                             303,995                   --                    --
   Other                                                                         74,903                 34,502                20,499
                                                                           ------------           ------------          ------------

              Total interest expense                                          6,190,326              4,314,265             4,039,536
                                                                           ------------           ------------          ------------

              Net interest income                                             7,847,137              6,331,155             5,733,805

Provision for loan losses                                                       386,600                116,000                60,720
                                                                           ------------           ------------          ------------

              Net interest income after provision for loan losses             7,460,537              6,215,155             5,673,085
                                                                           ------------           ------------          ------------

Other income:
   Service charges                                                              780,368                664,279               659,014
   Gain (loss) on sale of securities                                           (161,867)                 9,171                14,250
    Mortgage banking income                                                     487,938                327,162               406,033
   Miscellaneous                                                                310,208                327,649               203,997
                                                                           ------------           ------------          ------------

              Total other income                                              1,416,647              1,328,261             1,283,294
                                                                           ------------           ------------          ------------

Other expenses:
   Salaries and employee benefits                                             3,205,107              2,663,419             2,418,512
   Occupancy                                                                    727,866                543,808               516,428
   Other operating                                                            1,413,242              1,299,133             1,174,378
                                                                           ------------           ------------          ------------

              Total other expenses                                            5,346,215              4,506,360             4,109,318
                                                                           ------------           ------------          ------------

              Earnings before income taxes                                    3,530,969              3,037,056             2,847,061

Income tax expense                                                            1,064,187                833,729               815,167
                                                                           ------------           ------------          ------------

              Net earnings                                                 $  2,466,782              2,203,327             2,031,894
                                                                           ============           ============          ============

              Net earnings per share                                       $      13.71                  12.24                 11.29
                                                                           ============           ============          ============

              Weighted average shares outstanding                               179,977                179,998               180,000
                                                                           ============           ============          ============
</TABLE>

See accompanying notes to consolidated financial statements.


                                                                F-4
<PAGE>

<TABLE>
<CAPTION>
                                                    OCONEE FINANCIAL CORPORATION

                                           CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                                        FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

                                                                                      2000              1999               1998
                                                                                   ----------        ----------         ----------

<S>                                                                                <C>                <C>                <C>
Net earnings                                                                       $2,466,782         2,203,327          2,031,894
                                                                                   ----------        ----------         ----------

Other comprehensive income, net of income taxes:
  Unrealized gains on securities available for sale:

   Holding gains (losses) arising during period,
      net of tax of $285,057, $(477,457) and $(3,515)                                 465,884          (780,332)            (5,744)
   Reclassification adjustment for losses (gains) included in net
      earnings, net of tax of $61,445, $(3,481) and $(5,410)                          100,422            (5,690)            (8,840)
                                                                                   ----------        ----------         ----------

           Total other comprehensive income (loss)                                    566,306          (786,022)           (14,584)
                                                                                   ----------        ----------         ----------

Comprehensive income                                                               $3,033,088         1,417,305          2,017,310
                                                                                   ==========        ==========         ==========
</TABLE>


See accompanying notes to consolidated financial statements.


                                                                F-5


<PAGE>

<TABLE>
<CAPTION>
                                                    OCONEE FINANCIAL CORPORATION

                                     CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                                        FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

                                                                                                  Accumulated
                                                               Additional                           Other
                                               Common           Paid-In           Retained       Comprehensive
                                               Stock            Capital            Earnings           Income              Total
                                            -----------       -----------        -----------       -----------         -----------
<S>                                         <C>                 <C>                <C>                  <C>             <C>
Balance, December 31, 1997                  $ 1,800,000         4,250,000          5,086,518            64,356          11,200,874

Cash dividends declared
  ($4.00) per share                                --                --             (720,000)             --              (720,000)

Net earnings                                       --                --            2,031,894              --             2,031,894

Change in net unrealized gain (loss)
  on investment securities available
  for sale, net of tax                             --                --                 --             (14,584)            (14,584)
                                            -----------       -----------        -----------       -----------         -----------

Balance, December 31, 1998                    1,800,000         4,250,000          6,398,412            49,772          12,498,184

January 1, 1999 conversion of
  1 share of Oconee State Bank
  stock for 1 share of Oconee
  Financial Corporation stock                      --                --                 --                --                  --

Purchase and retirement of common
    stock                                           (60)             (840)              --                --                  (900)

Cash dividends declared
  ($5.00) per share                                --                --             (899,970)             --              (899,970)

Change in net unrealized gain (loss)
  on investment securities available
  for sale, net of tax                             --                --                 --            (786,022)           (786,022)

Net earnings                                       --                --            2,203,327              --             2,203,327
                                            -----------       -----------        -----------       -----------         -----------

Balance, December 31, 1999                    1,799,940         4,249,160          7,701,769          (736,250)         13,014,619

Purchase and retirement of common
     stock                                         (170)           (2,328)              --                --                (2,498)

Cash dividends declared
  ($5.50) per share                                --                --             (989,874)             --              (989,874)

Net earnings                                       --                --            2,466,782              --             2,466,782

Change in net unrealized gain (loss)
  on investment securities available
  for sale, net of tax                             --                --                 --             566,306             566,306
                                            -----------       -----------        -----------       -----------         -----------

Balance, December 31, 2000                  $ 1,799,770         4,246,832          9,178,677          (169,944)         15,055,335
                                            ===========       ===========        ===========       ===========         ===========
</TABLE>


See accompanying notes to consolidated financial statements.


                                                                F-6
<PAGE>

<TABLE>
<CAPTION>
                                                    OCONEE FINANCIAL CORPORATION

                                                CONSOLIDATED STATEMENTS OF CASH FLOWS

                                        FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

                                                                          2000                   1999               1998
                                                                      ------------          ------------         ------------
<S>                                                                   <C>                     <C>                  <C>
Cash flows from operating activities:
   Net earnings                                                       $  2,466,782            2,203,327            2,031,894
   Adjustments to reconcile net earnings to net
     cash provided by operating activities:
       Depreciation, amortization and accretion                            306,446              248,192              214,733
       Provision for loan losses                                           386,600              116,000               60,720
       Provision for deferred taxes                                       (120,110)             (24,203)             (11,509)
       Loss (gain) on sale of investment securities                        161,867               (9,171)             (14,250)
       Loss (gain) on sale of premises and equipment                        (1,500)                --                 21,428
       Change in:
         Accrued interest receivable                                      (361,304)            (256,152)            (178,321)
         Accrued interest payable                                          248,328              138,876              (33,326)
         Other assets                                                       49,951              (56,104)             (14,890)
         Other liabilities                                                 127,056              (63,856)              50,353
         Mortgage loans held for sale                                     (411,223)             (32,090)          (1,173,453)
                                                                      ------------         ------------         ------------

                Net cash provided by operating activities                2,852,893            2,264,819              953,379
                                                                      ------------         ------------         ------------

Cash flows from investing activities:
   Purchase of other investments                                          (272,800)             (39,800)             (27,000)
   Purchase of investment securities available for sale                 (2,950,769)         (10,236,926)         (13,590,609)
   Purchase of investment securities held to maturity                         --             (1,854,069)          (2,602,423)
   Proceeds from calls and maturities of investment securities
     available for sale                                                  2,077,390            4,788,162            7,683,927
   Proceeds from calls and maturities of investment securities
     held to maturity                                                         --                500,000              575,900
   Proceeds from sales of investment securities available
     for sale                                                            8,847,572            3,130,054            2,503,305
   Proceeds from sales of investment securities
     held to maturity                                                         --                505,000                 --
   Net change in loans                                                 (30,058,833)         (16,624,687)          (4,502,826)
   Purchases of premises and equipment                                    (922,619)            (367,136)            (241,276)
   Proceeds from sales of premises and equipment                             1,500                 --                   --
   Proceeds from sales of other real estate                                  2,736                 --                   --
                                                                      ------------         ------------         ------------

                Net cash used by investing activities                  (23,275,823)         (20,199,402)         (10,201,002)
                                                                      ------------         ------------         ------------

Cash flows from financing activities:
   Net change in deposits                                               14,010,408           20,407,021           11,530,281
   Net change in securities sold under repurchase agreements               (29,821)             307,739              199,333
   Net change in Federal Home Loan Bank advances                        13,300,000                 --                   --
   Dividends paid                                                         (899,970)            (720,000)            (594,000)
   Purchase and retirement of stock                                         (2,498)                (900)                --
                                                                      ------------         ------------         ------------
                Net cash provided by financing activities               26,378,119           19,993,860           11,135,614
                                                                      ------------         ------------         ------------

Net increase in cash and cash equivalents                                5,955,189            2,059,277            1,887,991

Cash and cash equivalents at beginning of year                          16,127,789           14,068,512           12,180,521
                                                                      ------------         ------------         ------------

Cash and cash equivalents at end of year                              $ 22,082,978           16,127,789           14,068,512
                                                                      ============         ============         ============
</TABLE>

                                                                F-7

<PAGE>

<TABLE>
<CAPTION>
                                                    OCONEE FINANCIAL CORPORATION

                                          CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

                                        FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

                                                                                           2000              1999           1998
                                                                                        ---------         ---------      ----------
<S>                                                                                     <C>               <C>              <C>
Supplemental  disclosures  of cash flow  information:
  Cash paid during the year for:
     Interest                                                                           $5,941,998        4,175,389       4,072,862
     Income taxes                                                                       $  869,000          629,000         773,000

Noncash investing and financing activities:
   Change in net unrealized loss on investment
     securities available for sale, net of tax                                          $  566,306          786,022         (14,584)
   Change in dividends payable                                                          $   89,904          179,970         126,000
   Transfer of investment securities held to maturity to
     available for sale                                                                 $     --         16,159,794            --
</TABLE>

See accompanying notes to consolidated financial statements.


                                                                F-8
<PAGE>


                          OCONEE FINANCIAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Organization
      ------------

      Oconee  Financial  Corporation  ("OFC")  received  regulatory  approval to
      operate  as a  bank  holding  company  on  October  13,  1998,  and  began
      operations  effective  January 1, 1999. OFC is primarily  regulated by the
      Federal  Reserve  Bank,  and serves as the  one-bank  holding  company for
      Oconee State Bank.

      Oconee State Bank (the "Bank") commenced  business in 1960 upon receipt of
      its banking  charter  from the Georgia  Department  of Banking and Finance
      (the "DBF").  The Bank is  primarily  regulated by the DBF and the Federal
      Deposit Insurance Corporation and undergoes periodic examinations by these
      regulatory  agencies.  The Bank  provides a full range of  commercial  and
      consumer  banking  services  primarily  in Oconee and Clarke  counties  in
      Georgia.

      Principles of Consolidation
      ---------------------------

      The consolidated  financial statements include the financial statements of
      Oconee Financial Corporation and its wholly owned subsidiary, Oconee State
      Bank  (collectively  called the "Company").  All significant  intercompany
      balances and transactions  have been eliminated in consolidation  for 2000
      and 1999.

      Basis of Presentation
      ---------------------

      The  accounting  principles  followed by the  Company,  and the methods of
      applying  these  principles,  conform with generally  accepted  accounting
      principles ("GAAP") and with general practices in the banking industry. In
      preparing the financial statements in conformity with GAAP,  management is
      required  to make  estimates  and  assumptions  that  affect the  reported
      amounts  in  the  financial   statements.   Actual  results  could  differ
      significantly  from  these  estimates.  Material  estimates  common to the
      banking industry that are particularly  susceptible to significant  change
      in the near term include, but are not limited to, the determination of the
      allowance  for loan  losses  and  valuation  of real  estate  acquired  in
      connection with or in lieu of foreclosure on loans.

      Cash and Cash Equivalents
      -------------------------

      For purposes of reporting cash flows,  cash and cash  equivalents  include
      cash and due from banks,  interest-bearing deposits with banks and federal
      funds sold.

      Investment Securities
      ---------------------

      The Company classifies its securities in one of three categories: trading,
      available for sale, or held to maturity. Trading securities are bought and
      held  principally for sale in the near term.  Held to maturity  securities
      are those  securities  for which the Company has the ability and intent to
      hold the security  until  maturity.  All other  securities not included in
      trading or held to maturity are classified as available for sale.

      Available for sale securities are recorded at fair value. Held to maturity
      securities  are  recorded  at  cost,  adjusted  for  the  amortization  or
      accretion of premiums or discounts.  Unrealized  holding gains and losses,
      net of the  related  tax  effect,  on  securities  available  for sale are
      excluded  from  earnings  and are  reported  as a  separate  component  of
      stockholders'  equity  until  realized.  Transfers of  securities  between
      categories are recorded at fair value at the date of transfer.  Unrealized
      holding gains or losses  associated with transfers of securities from held
      to maturity to available for sale are recorded as a separate  component of
      stockholders'  equity.  The unrealized holding gains or losses included in
      the separate component of stockholders' equity for securities  transferred
      from  available for sale to held to maturity are  maintained and amortized
      into income over the  remaining  life of the security as an  adjustment to
      the yield in a manner  consistent  with the  amortization  or accretion of
      premium or discount on the associated security.

      A  decline  in the  market  value  of any  available  for  sale or held to
      maturity  security  below  cost that is deemed  other  than  temporary  is
      charged to earnings and establishes a new cost basis for the security.

      Premiums and  discounts  are  amortized  or accreted  over the life of the
      related security as an adjustment to the yield.  Realized gains and losses
      for  securities  classified as available for sale and held to maturity are
      included in earnings  and are derived  using the  specific  identification
      method for determining the cost of securities sold.


                                      F-9
<PAGE>


                          OCONEE FINANCIAL CORPORATION

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

      Other Investments
      -----------------

      Other  investments  include  Federal Home Loan Bank stock and other equity
      securities  with no readily  determinable  fair  value.  These  investment
      securities are carried at cost.

      Mortgage Loans Held for Sale
      ----------------------------

      Mortgage loans held for sale are carried at the lower of aggregate cost or
      market value.  At December 31, 2000 and 1999,  the cost of mortgage  loans
      held for sale approximates the market value.

      Loans and Allowance for Loan Losses
      -----------------------------------

      Loans are stated at the principal amount outstanding, net of the allowance
      for loan  losses.  Interest  on loans is  calculated  by using the  simple
      interest method on daily balances of the principal amount outstanding.

      Impaired loans are measured based on the present value of expected  future
      cash flows,  discounted at the loan's  effective  interest rate, or at the
      loan's observable market price, or the fair value of the collateral if the
      loan is collateral  dependent.  A loan is impaired when,  based on current
      information  and events,  it is probable that all amounts due according to
      the contractual terms of the loan will not be collected.

      Accrual of interest is discontinued  on a loan when  management  believes,
      after considering  economic  conditions and collection  efforts,  that the
      borrower's  financial  condition  is such that  collection  of interest is
      doubtful.  Interest  previously  accrued  but not  collected  is  reversed
      against  current period earnings when such loans are placed on non-accrual
      status.

      The allowance for loan losses is established  through a provision for loan
      losses  charged to earnings.  Loans are charged  against the allowance for
      loan  losses  when  management  believes  that the  collectibility  of the
      principal  is unlikely.  The  allowance  represents  an amount  which,  in
      management's  judgment,  will be  adequate  to absorb  probable  losses on
      existing loans that may become uncollectible.

      Management's  judgment in  determining  the  adequacy of the  allowance is
      based on evaluations of the  collectibility  of loans.  These  evaluations
      take into  consideration  such factors as changes in the nature and volume
      of the loan  portfolio,  current  economic  conditions that may affect the
      borrower's  ability  to pay,  overall  portfolio  quality  and  review  of
      specific  problem loans.  In determining the adequacy of the allowance for
      loan losses,  management  uses a loan  grading  system that rates loans in
      seven  different  categories.  Grades  four  through  seven  are  assigned
      allocations of loss based on standard  regulatory  loss  percentages.  All
      other loans are assigned loss allocations  based on historical credit loss
      percentages.  The  combination of these results are compared  quarterly to
      the recorded  allowance for loan losses.  Management uses an external loan
      review program to challenge and  corroborate  the internal  grading system
      and  provide  additional  analysis  in  determining  the  adequacy  of the
      allowance and the future provisions for estimated loan losses.

      While management uses available  information to recognize losses on loans,
      future  additions to the  allowance  may be necessary  based on changes in
      economic  conditions.  In addition,  various  regulatory  agencies,  as an
      integral  part of  their  examination  process,  periodically  review  the
      Company's allowance for loan losses. Such agencies may require the Company
      to recognize  additions to the allowance based on judgments different than
      those of management.

      Premises and Equipment
      ----------------------

      Premises and equipment are stated at cost less  accumulated  depreciation.
      Depreciation is computed primarily using the straight-line method over the
      estimated useful lives of the assets. When assets are retired or otherwise
      disposed  of, the cost and related  accumulated  depreciation  are removed
      from the  accounts,  and any gain or loss is reflected in earnings for the
      period. The cost of maintenance and repairs which do not improve or extend
      the useful life of the respective  asset is charged to income as incurred,
      whereas significant  renewals and improvements are capitalized.  The range
      of estimated  useful lives for premises  and  equipment  are  generally as
      follows:

         Buildings and improvements                            5 - 40 years
         Furniture and equipment                               3 - 10 years



                                      F-10
<PAGE>


                          OCONEE FINANCIAL CORPORATION

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

      Securities Sold Under Repurchase Agreements
      -------------------------------------------

      Securities  sold under  repurchase  agreements  are  treated as  financing
      activities, and are carried at the amounts at which the securities will be
      repurchased as specified in the respective agreements.

      Income Taxes
      ------------

      Deferred  tax assets and  liabilities  are  recognized  for the future tax
      consequences  attributable to differences  between the financial statement
      carrying  amounts of existing assets and liabilities and their  respective
      tax bases.  Additionally,  the recognition of future tax benefits, such as
      net  operating  loss  carryforwards,   is  required  to  the  extent  that
      realization of such benefits is more likely than not.  Deferred tax assets
      and  liabilities are measured using enacted tax rates expected to apply to
      taxable  income in the  years in which  the  assets  and  liabilities  are
      expected to be recovered or settled. The effect on deferred tax assets and
      liabilities  of a change in tax rates is  recognized in income tax expense
      in the period that includes the enactment date.

      In the event the  future  tax  consequences  of  differences  between  the
      financial  reporting  bases and the tax bases of the Company's  assets and
      liabilities   result  in  deferred  tax  assets,   an  evaluation  of  the
      probability of being able to realize the future benefits indicated by such
      assets is required.  A valuation  allowance is provided for the portion of
      the  deferred  tax asset when it is more likely than not that some portion
      or all of the deferred tax asset will not be  realized.  In assessing  the
      realizability  of  the  deferred  tax  assets,  management  considers  the
      scheduled reversals of deferred tax liabilities,  projected future taxable
      income, and tax planning strategies.

      Profit Sharing Plan
      -------------------

      The Company has a  contributory  profit sharing plan which is available to
      substantially   all   employees   subject  to  certain   age  and  service
      requirements.  Contributions  to the plan are  determined  annually by the
      Board of Directors.  The total  contribution by the Company for 2000, 1999
      and 1998 was approximately $180,900, $127,100 and $203,200, respectively.

      Mortgage Banking Income
      -----------------------

      Mortgage  banking  income  represents  net gains from the sale of mortgage
      loans and fees received from borrowers and loan  investors  related to the
      Bank's origination of single-family residential mortgage loans.

      Net Earnings Per Common Share
      -----------------------------

      Earnings  per common  share are based on the  weighted  average  number of
      common shares outstanding during the period while the effects of potential
      common  shares  outstanding  during  the period  are  included  in diluted
      earnings per share. The Company had no potential common shares outstanding
      during 2000, 1999 and 1998.

      Reclassification
      ----------------

      Reclassifications  of  certain  amounts  in the 1999  and  1998  financial
      statements  have  been  made  to  conform  with  the  financial  statement
      presentation  for  2000.  The  reclassifications  have  no  effect  on net
      earnings or shareholders' equity as previously reported.

      Derivative Instruments and Hedging Activities
      ---------------------------------------------

      Effective  July 1,  1999,  the  Company  adopted  Statement  of  Financial
      Accounting Standards No. 133,  "Accounting for Derivative  Instruments and
      Hedging  Activities"  ("SFAS No. 133"),  which establishes  accounting and
      reporting standards for hedging activities and for derivative  instruments
      including derivative instruments embedded in other contracts.  It requires
      the fair value  recognition of derivatives as assets or liabilities in the
      financial  statements.  At the date of initial application,  an entity may
      transfer  any held to maturity  security  into the  available  for sale or
      trading  categories  without  calling into question the entity's intent to
      hold other  securities  to maturity in the  future.  In 1999,  the Company
      transferred  all held to maturity  investment  securities to available for
      sale under this provision of SFAS No. 133. The held to maturity securities
      had amortized costs of  approximately  $16,160,000 and net unrealized loss
      of  approximately  $41,000.  The result of the  transfer  was to  decrease
      stockholders' equity by approximately  $22,000,  which represented the net
      of tax  effect  of the  unrealized  losses  associated  with  the  held to
      maturity investments transferred.


                                      F-11
<PAGE>


                          OCONEE FINANCIAL CORPORATION

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(2)   CORPORATE REORGANIZATION

      Effective January 1, 1999, the Bank completed the process of converting to
      the holding company form of operation.  Oconee  Financial  Corporation has
      become the parent of the Bank. OFC is a Georgia, one-bank holding company,
      headquartered in Watkinsville, Georgia.

      The Bank's  shareholders  approved the holding company  reorganization  on
      December 15, 1998.  Regulatory  approval was received on October 13, 1998.
      The holding  company  conversion was completed  successfully on January 1,
      1999.  As a result  of the  conversion,  each  share of Bank $10 par value
      common stock was converted into one share of OFC $10 par value stock.  OFC
      is now the sole shareholder of the Bank.

(3)   INVESTMENT SECURITIES

      Investment securities available for sale at December 31, 2000 and 1999 are
as follows:
<TABLE>
<CAPTION>
                                                                        December 31, 2000
                                              -------------------------------------------------------------------
                                                                    Gross            Gross            Estimated
                                               Amortized         Unrealized        Unrealized            Fair
                                                 Cost              Gains             Losses              Value
                                             -----------        -----------        -----------        -----------
          <S>                                <C>                     <C>               <C>              <C>
          U.S. Treasuries and
          Government agencies                $ 9,543,711             34,544            129,739          9,448,516
          State, county and municipal         12,739,772            128,240            129,368         12,738,644
          Mortgage-backed securities           8,047,641               --              177,603          7,870,038
                                             -----------        -----------        -----------        -----------


          Total                              $30,331,124            162,784            436,710         30,057,198
                                             ===========        ===========        ===========        ===========

<CAPTION>

                                                                        December 31, 1999
                                              -------------------------------------------------------------------
                                                                    Gross            Gross            Estimated
                                               Amortized         Unrealized        Unrealized            Fair
                                                 Cost              Gains             Losses              Value
                                             -----------        -----------        -----------        -----------
          <S>                                <C>                     <C>               <C>              <C>
          U.S. Treasuries and
          Government agencies                $ 8,377,169             35,759            164,867          8,248,061
          State, county and municipal         16,698,398             48,493            633,186         16,113,705
          Mortgage-backed securities          13,368,181              2,665            475,599         12,895,247
                                             -----------        -----------        -----------        -----------

          Total                              $38,443,748             86,917          1,273,652         37,257,013
                                             ===========        ===========        ===========        ===========
</TABLE>

       The amortized cost and fair value of investment  securities available for
       sale at December  31, 2000,  by  contractual  maturity,  are shown below.
       Expected  maturities  will differ  from  contractual  maturities  because
       borrowers  have the right to call or prepay  obligations  with or without
       call or prepayment penalties.

                                                      Amortized      Estimated
                                                         Cost        Fair Value
                                                      ---------      ---------

               Due within one year                   $  449,909        450,256
               Due from one to five years             3,834,877      3,843,116
               Due from five to ten years             8,364,554      8,311,237
               Due after ten years                    9,634,143      9,582,551
               Mortgage-backed securities             8,047,641      7,870,038
                                                      ---------      ---------

                                                   $ 30,331,124     30,057,198
                                                     ==========     ==========

       Proceeds  from sales of  securities  available  for sale during 2000 were
       $8,847,572.  Gross  gains of $2,861  along with gross  losses of $164,728
       were realized on 2000 sales.  Proceeds from sales of securities available
       for sale  during  1999 were  $3,130,054.  Gross gains of $7,895 and gross
       losses of $7,546  were  realized on 1999  sales.  Proceeds  from sales of
       securities available for sale during 1998 were $2,503,305. Gross gains of
       $14,695 and gross losses of $445 were realized on 1998 sales.


                                      F-12
<PAGE>


                          OCONEE FINANCIAL CORPORATION

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(3)    INVESTMENT SECURITIES, CONTINUED

       During 1999, the Company  determined  that a municipal bond classified as
       held to maturity was deemed an unacceptable investment security for banks
       by the DBF. The bond was sold during 1999 for $505,000.  A gain of $8,822
       was realized on the sale.

       Securities  with  a  carrying  value  of  approximately  $16,817,000  and
       $14,747,000 at December 31, 2000 and 1999, respectively,  were pledged to
       secure public deposits and for other purposes as required by law.

(4)    LOANS

       Major  classifications  of  loans  at  December  31,  2000  and  1999 are
summarized as follows:

<TABLE>
<CAPTION>
                                                            2000                1999
                                                        ------------        ------------

          <S>                                           <C>                   <C>
          Commercial, financial and agricultural        $ 16,487,028          12,714,342
          Real estate - mortgage                          64,214,266          40,222,371
          Real estate - construction                      29,663,443          28,310,935
          Consumer                                        12,976,318          12,082,629
                                                        ------------        ------------

                Total loans                              123,341,055          93,330,277
          Less allowance for loan losses                   1,807,671           1,469,126
                                                        ------------        ------------
                Total net loans                         $121,533,384          91,861,151
                                                        ============        ============
</TABLE>

       The Bank grants loans and  extensions of credit  primarily to individuals
       and a variety  of firms  and  corporations  located  in  certain  Georgia
       counties including Oconee and Clarke. Although the Bank has a diversified
       loan  portfolio,   a  substantial   portion  of  the  loan  portfolio  is
       collateralized  by improved and  unimproved  real estate and is dependent
       upon the real estate market.

       Changes in the allowance for loan losses were as follows:

<TABLE>
<CAPTION>

                                                                  2000                1999                1998
                                                              -----------         -----------         -----------
<S>                                                           <C>                   <C>                 <C>
          Balance at beginning of year                        $ 1,469,126           1,427,420           1,362,530
          Amounts charged off                                     (97,676)           (102,981)            (91,925)
          Recoveries on amounts previously charged off             49,621              28,687              96,095
          Provision for loan losses                               386,600             116,000              60,720
                                                              -----------         -----------         -----------

          Balance at end of year                              $ 1,807,671           1,469,126           1,427,420
                                                              ===========         ===========         ===========
</TABLE>

(5)   PREMISES AND EQUIPMENT

      Major classifications of premises and equipment are summarized as follows:

<TABLE>
<CAPTION>
                                                  2000              1999
                                               ---------          ---------
           <S>                                 <C>                <C>
          Land                                 $  459,929           459,929
          Buildings and improvements            1,796,481         1,721,021
          Furniture and equipment               2,321,947         1,502,881
                                               ----------        ----------
                                                4,578,357         3,683,831
          Less accumulated depreciation         2,359,628         2,057,841
                                               ----------        ----------
                                               $2,218,729         1,625,990
                                               ==========        ==========
</TABLE>

      Depreciation  expense was  $329,780,  $235,802  and $222,525 for the years
      ended December 31, 2000, 1999 and 1998, respectively.



                                      F-13
<PAGE>


                          OCONEE FINANCIAL CORPORATION

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(6)   DEPOSITS

      The  aggregate  amounts of  certificates  of deposit,  each with a minimum
      denomination of $100,000,  were approximately  $24,143,000 and $10,182,000
      at December 31, 2000 and 1999, respectively.

      At December 31, 2000, the scheduled maturities of certificates of deposits
are as follows:

                2001                                      $     63,378,709
                2002                                            19,969,338
                2003                                               826,902
                2004                                               520,003
                2005 and thereafter                                590,215
                                                              ------------
                                                          $     85,285,167
                                                              ============
(7)   INCOME TAXES

      The  components of income tax expense in the statements of earnings are as
follows:
<TABLE>
<CAPTION>
                                              2000                1999               1998
                                          -----------         -----------         -----------
          <S>                             <C>                     <C>                 <C>
          Current                         $ 1,184,297             857,932             826,676
          Deferred                           (120,110)            (24,203)            (11,509)
                                          -----------         -----------         -----------

          Total income tax expense        $ 1,064,187             833,729             815,167
                                          ===========         ===========         ===========
</TABLE>


      The  differences  between  income tax expense  and the amount  computed by
      applying the statutory  federal income tax rate to earnings  before income
      taxes are as follows:

<TABLE>
<CAPTION>
                                                        2000                1999               1998
                                                    -----------         -----------         -----------
<S>                                                 <C>                   <C>                   <C>
          Pretax income at statutory rates          $ 1,200,529           1,032,599             968,000
          Add (deduct):
          Tax exempt interest income                   (258,405)           (279,293)           (243,794)
          Non-deductible interest expense                38,178              34,719              37,162
          State taxes, net of federal effect             78,896              69,836              56,488
          Other                                           4,989             (24,132)             (2,689)
                                                    -----------         -----------         -----------

                                                    $ 1,064,187             833,729             815,167
                                                    ===========         ===========         ===========
</TABLE>

      The  following  summarizes  the sources and expected tax  consequences  of
      future  taxable  deductions  (income)  which comprise the net deferred tax
      asset.  The net  deferred  tax  asset is a  component  of other  assets at
      December 31, 2000 and 1999.

<TABLE>
<CAPTION>
                                                                                      2000              1999
                                                                                   ---------         ---------
           <S>                                                                      <C>                 <C>
          Deferred income tax assets:
              Allowance for loan losses                                            $ 599,990           471,478
              Other real estate                                                       25,952            25,952
              Unrealized losses on investment securities available for sale          103,982           450,484
              Other                                                                    7,544            13,283
                                                                                   ---------         ---------
                      Total gross deferred income tax assets                         737,468           961,197
          Deferred income tax liabilities, consisting of
              premises and equipment                                                 (47,436)          (44,773)
                                                                                   ---------         ---------
                      Net deferred income tax asset                                $ 690,032           916,424
                                                                                   =========         =========
</TABLE>


                                      F-14
<PAGE>


                          OCONEE FINANCIAL CORPORATION

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(8)   FEDERAL HOME LOAN BANK ADVANCES

      The Bank has an agreement with the Federal Home Loan Bank ("FHLB") whereby
      the FHLB agreed to provide the Bank credit  facilities  under an Agreement
      for Advances and Security Agreement.  Any amounts advanced by the FHLB are
      secured  under a blanket  floating  lien on all of the  Bank's  1-4 family
      first  mortgage  loans.  The  Bank  may  draw  advances  up to  75% of the
      outstanding  balance of these loans based on the agreement  with the FHLB.
      At December 31, 2000,  the Bank had one advance  outstanding in the amount
      of $13,300,000, which matures in August 2003, and calls for interest to be
      paid quarterly at a fixed rate of 6.34%. The Bank had no advances from the
      FHLB at December 31, 1999.

 (9)  RELATED PARTY TRANSACTIONS

      The Company conducts  transactions with directors and executive  officers,
      including companies in which they have beneficial interests, in the normal
      course of business. It is the policy of the Company that loan transactions
      with  directors  and officers be made on  substantially  the same terms as
      those  prevailing at the time made for comparable  loans to other persons.
      The following is a summary of activity for related party loans for 2000:

             Beginning balance                               $ 2,503,000
             New loans                                         5,522,000
             Repayments                                       (4,014,000)
                                                               ---------

             Ending balance                                  $ 4,011,000
                                                               =========

      Deposits  with  related  parties  totaled  approximately   $5,710,000  and
      $5,142,000 as of December 31, 2000 and 1999, respectively.

 (10) 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  include  commitments  to extend
      credit,  standby  letters  of  credit  and  financial  guarantees.   Those
      instruments involve, to varying degrees, elements of credit risk in excess
      of the amount  recognized in the balance  sheet.  The contract  amounts of
      those  instruments  reflect  the  extent  of  involvement  the Bank has in
      particular classes of financial instruments.

      The  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 and financial  guarantees written 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.

      In most cases,  the Company does require  collateral or other  security to
      support financial instruments with credit risk.

<TABLE>
<CAPTION>

                                                                                           Contractual Amount

                                                                                           2000           1999
                                                                                           ----           ----

<S>                                                                                     <C>              <C>
           Financial instruments whose contract amounts represent credit risk:
                Commitments to extend credit                                            $ 25,237,000     18,516,000
                Standby letters of credit and
                  financial guarantees written                                            $  736,000        609,000
</TABLE>

      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.
      Commitments  generally have fixed  expiration  dates or other  termination
      clauses and may require  payment of a fee.  Since many of the  commitments
      may expire without being drawn upon, the total  commitment  amounts do not
      necessarily represent future cash requirements. The Company evaluates each
      customer's  creditworthiness  on  a  case-by-case  basis.  The  amount  of
      collateral  obtained,  if deemed  necessary by the Bank, upon extension of
      credit is based on management's credit evaluation.  Collateral held varies
      but may include  unimproved  and  improved  real estate,  certificates  of
      deposit, or personal property.


                                      F-15
<PAGE>


                          OCONEE FINANCIAL CORPORATION

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(10)  COMMITMENTS, CONTINUED

      Standby letters of credit and financial guarantees written are conditional
      commitments  issued by the  Company  to  guarantee  the  performance  of a
      customer  to a third  party.  Those  guarantees  are  primarily  issued to
      businesses  in the  Company's  delineated  trade  area.  The  credit  risk
      involved  in  issuing  letters of credit is  essentially  the same as that
      involved in extending loan facilities to customers. The Company holds real
      estate,  equipment,   automobiles  and  customer  deposits  as  collateral
      supporting those commitments for which collateral is deemed necessary.

(11)  REGULATORY MATTERS

      The  Company  is  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 Company's financial statements. Under
      capital  adequacy  guidelines  and the  regulatory  framework  for  prompt
      corrective  action,  the 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 capital  amounts and  classification  are also  subject to
      qualitative judgments by the regulators about components, risk weightings,
      and other factors.

      Quantitative measures established by regulation to ensure capital adequacy
      require the Bank to maintain  minimum amounts and ratios (set forth in the
      table  below) of total and Tier 1 capital (as defined in the  regulations)
      to risk-weighted  assets (as defined),  and of Tier 1 capital (as defined)
      to average assets (as defined).  Management  believes,  as of December 31,
      2000, that the Bank meets all capital adequacy requirements to which it is
      subject.

      As of  December  31,  2000,  the most  recent  notification  from the FDIC
      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 1 risk-based and Tier 1
      leverage  ratios as set forth in the  table.  There are no  conditions  or
      events since that notification  that management  believes have changed the
      institution's category.

      The capital  ratios for the Company are  essentially  the same as those of
      the Bank.  Therefore,  only the Bank's capital ratios are presented in the
      following table (in thousands):
<TABLE>
<CAPTION>
                                                                                                          To Be Well
                                                                                                        Capitalized Under
                                                                               For Capital              Prompt Corrective
                                                        Actual               Adequacy Purposes          Action Provisions
                                                 -----------------------   ----------------------    ------------------------
                                                 Amount          Ratio     Amount           Ratio     Amount            Ratio
                                                -------          -------   -------          -----     -------           ------
<S>                                             <C>              <C>        <C>              <C>       <C>              <C>
          AS OF DECEMBER 31, 2000:
             Total Capital
               (to Risk-Weighted Assets)        $16,682          12.7%      $10,535          8.0%      $13,169          10.0%
             Tier 1 Capital
               (to Risk-Weighted Assets)        $15,036          11.4%      $ 5,268          4.0%      $ 7,901           6.0%
             Tier 1 Capital
               (to Average Assets)              $15,036           8.6%      $ 7,015          4.0%      $ 8,769           5.0%

          AS OF DECEMBER 31, 1999
             Total Capital
               (to Risk-Weighted Assets)        $14,966          14.6%      $ 8,226          8.0%      $10,283          10.0%
             Tier 1 Capital
               (to Risk-Weighted Assets)        $13,678          13.3%      $ 4,113          4.0%      $ 6,170           6.0%
             Tier 1 Capital
               (to Average Assets)              $13,678           9.2%      $ 5,962          4.0%      $ 7,452           5.0%
</TABLE>



                                      F-16
<PAGE>


                          OCONEE FINANCIAL CORPORATION

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(12)  DIVIDEND LIMITATIONS

      Dividends  paid by the Bank are the primary  source of funds  available to
      the Company for payment of  dividends  to its  shareholders  and for other
      working capital needs.  Banking  regulations limit the amount of dividends
      that may be paid without  prior  approval of the  regulatory  authorities.
      These restrictions are based on the level of regulatory classified assets,
      the prior year's net  earnings,  and the ratio of equity  capital to total
      assets.  Approximately  $1,240,000  is available  for payment of dividends
      from the Bank to the Company in 2001.

 (13) FAIR VALUE OF FINANCIAL INSTRUMENTS

      The Company is required to disclose fair value information about financial
      instruments,  whether or not  recognized on the face of the balance sheet,
      for which it is practicable to estimate that value.  The assumptions  used
      in the estimation of the fair value of the Company's financial instruments
      are detailed below. Where quoted prices are not available, fair values are
      based on  estimates  using  discounted  cash  flows  and  other  valuation
      techniques. The use of discounted cash flows can be significantly affected
      by the  assumptions  used,  including  the discount  rate and estimates of
      future cash flows.  The following  disclosures  should not be considered a
      surrogate of the liquidation value of the Company, but rather a good faith
      estimate of the  increase or  decrease in value of  financial  instruments
      held by the Company since purchase, origination, or issuance.

         Cash and Cash Equivalents
         -------------------------

         For cash,  due from banks,  interest  bearing  deposits  with banks and
         federal  funds sold,  the carrying  amount is a reasonable  estimate of
         fair value.

         Investment Securities
         ---------------------

         Fair  values  for  investment  securities  are based on  quoted  market
         prices.

         Other Investments
         -----------------

         The carrying amount of other investments approximates fair value.

         Loans and Mortgage Loans Held for Sale
         --------------------------------------

         The fair value of fixed  rate loans is  estimated  by  discounting  the
         future cash flows using the current  rates at which similar loans would
         be made to borrowers  with similar  credit  ratings.  For variable rate
         loans, the carrying amount is a reasonable estimate of fair value.

         Deposits and Securities Sold Under Repurchase Agreements
         --------------------------------------------------------

         The fair value of demand  deposits,  interest-bearing  demand deposits,
         savings, and securities sold under repurchase  agreements is the amount
         payable  on  demand  at the  reporting  date.  The fair  value of fixed
         maturity certificates of deposit is estimated by discounting the future
         cash flows using the rates  currently  offered for  deposits of similar
         remaining maturities.

         FHLB Advances
         -------------

         The fair value of FHLB  advances  is  estimated  based upon  discounted
         future  cash flows  using a discount  rate  comparable  to the  current
         market rate for such borrowings.

         Commitments to Extend Credit and Standby Letters of Credit
         ----------------------------------------------------------

         Because  commitments to extend credit and standby letters of credit are
         made using variable rates, the contract value is a reasonable  estimate
         of fair value.

         Limitations
         -----------

         Fair value  estimates  are made at a specific  point in time,  based on
         relevant  market   information  and  information  about  the  financial
         instrument. These estimates do not reflect any premium or discount that
         could result from  offering for sale at one time the  Company's  entire
         holdings of a particular financial instrument. Because no market exists
         for a significant portion of the Company's financial instruments,  fair
         value  estimates  are  based on many  judgments.  These  estimates  are
         subjective  in  nature  and  involve   uncertainties   and  matters  of
         significant judgment and therefore cannot be determined with precision.
         Changes in assumptions could significantly affect the estimates.


                                      F-17
<PAGE>


                          OCONEE FINANCIAL CORPORATION

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(13)  FAIR VALUE OF FINANCIAL INSTRUMENTS, CONTINUED

         Limitations, continued
         -----------

         Fair value  estimates  are based on existing on and  off-balance  sheet
         financial  instruments  without  attempting  to  estimate  the value of
         anticipated  future  business  and the value of assets and  liabilities
         that are not considered financial  instruments.  Significant assets and
         liabilities that are not considered  financial  instruments include the
         deferred income taxes and premises and equipment.  In addition, the tax
         ramifications  related to the  realization of the unrealized  gains and
         losses can have a significant  effect on fair value  estimates and have
         not been considered in the estimates.

      The carrying  amount and estimated fair values of the Company's  financial
      instruments at December 31, 2000 and 1999 are as follows:
<TABLE>
<CAPTION>
                                                                      2000                            1999
                                                           --------------------------      -----------------------------
                                                             Carrying      Estimated        Carrying        Estimated
                                                              Amount       Fair Value        Amount         Fair Value
                                                           ----------      -----------      --------        ------------
                                                                  (In thousands)                   (In thousands)
<S>                                                         <C>               <C>             <C>             <C>
          Assets:
            Cash and cash equivalents                       $ 22,083          22,083          16,128          16,128
            Investment securities available for sale        $ 30,057          30,057          37,257          37,257
            Loans and mortgage loans held for sale          $123,812         122,497          93,729          95,232
            Other investments                               $    765             765             493             493
          Liabilities:
            Deposits and securities sold under
                 repurchase agreement                       $151,374         151,507         137,393         137,409
            FHLB Advances                                   $ 13,300          13,503            --              --
          Unrecognized financial instruments:
            Commitments to extend credit                    $ 25,237          25,237          18,516          18,516
            Standby letters of credit                       $    736             736             609             609
</TABLE>

 (14)  OTHER OPERATING EXPENSES

       Components  of other  operating  expenses  which are  greater  than 1% of
       interest income and other income are as follows:

<TABLE>
<CAPTION>

                                                                                         2000          1999         1998
                                                                                         ----          ----         ----
<S>                                                                                  <C>             <C>          <C>
       Postage expense                                                               $ 138,217       130,345      118,154
</TABLE>

                                      F-18
<PAGE>


                          OCONEE FINANCIAL CORPORATION

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(15)   OCONEE FINANCIAL CORPORATION (PARENT COMPANY ONLY) FINANCIAL INFORMATION


                                 Balance Sheets

                           December 31, 2000 and 1999

                                     Assets
<TABLE>
<CAPTION>
                                                   2000               1999
                                               -----------        -----------
<S>                                            <C>                    <C>
          Cash                                 $ 1,174,375            970,959
          Investment in subsidiary              14,866,161         12,941,972
          Other assets                               7,544             10,959
                                               -----------        -----------
                                               $16,048,080         13,923,890
                                               ===========        ===========

                        Liabilities and Stockholders' Equity


          Other liabilities                    $   992,745            909,271
          Stockholders' equity                  15,055,335         13,014,619
                                               -----------        -----------
                                               $16,048,080         13,923,890
                                               ===========        ===========
</TABLE>



                                      F-19
<PAGE>

<PAGE>


                          OCONEE FINANCIAL CORPORATION

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(15)  OCONEE FINANCIAL CORPORATION (PARENT COMPANY ONLY) FINANCIAL INFORMATION,
      CONTINUED
<TABLE>
<CAPTION>

                                                     Statement of Earnings

                                         For the Years Ended December 31, 2000 and 1999


                                                                                 2000                1999
                                                                             -----------         -----------
<S>                                                                          <C>                   <C>
          Dividends from subsidiary                                          $ 1,122,878           1,015,947

          Other expenses                                                          22,533              68,392
                                                                             -----------         -----------


               Earnings before income taxes and equity in
                 undistributed earnings of subsidiary                          1,100,345             947,555
                                                                             -----------         -----------
          Income tax benefit                                                       8,554              25,962


               Earnings before equity in undistributed earnings
                 of subsidiary                                                 1,108,899             973,517

          Equity in undistributed earnings of subsidiary                       1,357,883           1,229,810
                                                                             -----------         -----------

               Net earnings                                                  $ 2,466,782           2,203,327
                                                                             ===========         ===========

                                Statement of Cash Flows

                    For the Years Ended December 31, 2000 and 1999

                                                                                 2000                1999
                                                                             -----------         -----------
          Cash flows from operating activities:

            Net earnings                                                     $ 2,466,782           2,203,327
            Adjustments to reconcile net earnings
               to net cash provided by operating activities:
                 Equity in undistributed earnings of subsidiary               (1,357,883)         (1,229,810)
                 Change in:
                   Other assets                                                    3,415             (10,959)
                   Other liabilities                                              (6,430)              9,301
                                                                             -----------         -----------
                            Net cash provided by operating activities          1,105,884             971,859
                                                                             -----------         -----------
          Cash flows from financing activities:
             Dividends paid                                                     (899,970)               --
            Purchase and retirement of common stock                               (2,498)               (900)
                                                                             -----------         -----------

                            Net cash used by financing activities               (902,468)                (900)
                                                                             -----------         -----------

          Change in cash                                                         203,416             970,959
          Cash at beginning of year                                              970,959
                                                                             -----------         -----------
          Cash at end of year                                                $ 1,174,375             970,959
                                                                             ===========         ===========
          Supplemental disclosure of cash flow information:
            Noncash investing activities:
               Change in unrealized gain on securities
                 available for sale                                          $   566,306             786,022
               Change in dividends payable                                   $    89,904             899,970
</TABLE>



                                      F-20

<PAGE>

                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934,  the Registrant has duly caused this Report on Form 10-KSB
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Watkinsville, State of Georgia, on the 28th of March, 2001.

                                           OCONEE STATE BANK

                                           (REGISTRANT)

                                           By:   /s/ B. Amrey Harden
                                              ---------------------------------
                                                    B. Amrey Harden
                                           Title:   President

                        POWER OF ATTORNEY AND SIGNATURES

         KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below  constitutes and appoints B. Amrey Harden or Douglas D. Dickens and either
of  them  (with  full  power  in  each  to  act  alone),   as  true  and  lawful
attorneys-in-fact,  with full  power of  substitution,  for him and in his name,
place and  stead,  in any and all  capacities,  to sign any  amendments  to this
Report on Form 10-KSB and to file the same, with all exhibits  thereto and other
documents in connection therewith, with the SEC, hereby ratifying and confirming
all that said attorney-in-fact, or their substitute or substitutes, may lawfully
do or cause to be done by virtue thereof.

         Pursuant to the requirements of the Securities Act of 1934, this Report
on Form  10-KSB  has been  signed by the  following  persons  in the  capacities
indicated on the 28th day of March 2001.


<PAGE>




<TABLE>
<CAPTION>
Signature                                            Title
---------                                            -----
<S>                                                  <C>
/s/ G. Robert Bishop                                 Director
-------------------------------------
G. Robert Bishop

/s/ Jimmmy L. Christopher                            Director
-------------------------------------
Jimmy L. Christopher

/s/ Douglas D. Dickens                               Chairman of the Board of Directors
-------------------------------------
Douglas D. Dickens

/s/ Walter T. Evans, Sr.                             Director
-------------------------------------
Walter T. Evans, Sr.

/s/ John A. Hale                                     Vice Chairman of the Board, Director
-------------------------------------
John A. Hale

/s/ B. Amrey Harden                                  President and Chief Executive Officer, Director
-------------------------------------
B. Amrey Harden

/s/ Donald L. Jesweak                                Senior Vice President and Senior Lending Officer
-------------------------------------
Donald L. Jesweak

/s/ Henry C. Maxey                                   Director
-------------------------------------
Henry C. Maxey

/s/ Carl R. Nichols                                  Director
-------------------------------------
Carl R. Nichols

/s/ Ann Breedlove Powers                             Director
-------------------------------------
Ann Breedlove Powers

/s/ Jerry K. Wages                                   Executive Vice President and Chief Financial
-------------------------------------                Officer, Corporate Secretary, and Director
Jerry K. Wages

/s/ Virginia S. Wells                                Director
------------------------------------
Virginia S. Wells
</TABLE>