##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the fiscal year ended December 31, 2007
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File No. 0-22891
 GEORGIA-CAROLINA BANCSHARES,
INC.
 (Exact name of registrant as specified in its charter)
 Georgia
    
    58-2326075(State of Incorporation)
    
    (I.R.S. Employer Identification Number)
 3527 Wheeler Road 
Augusta, Georgia
    
    
    
    30909(Address of Principal Executive Offices)
    
    
    
    (Zip Code)
 (706) 731-6600
  Securities registered under Section 12(b) of the Act:
 Title of Each Class
    
    Name of each exchange on which registeredNone
    
    None
 Securities registered under Section 12(g) of the Exchange Act:
 
 o þ
 o þ
 þ o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ
  DOCUMENTS INCORPORATED BY REFERENCE




---



##### 



GEORGIA-CAROLINA BANCSHARES, INC.
2007 Form 10-K Annual Report
 TABLE OF CONTENTS
 Item Number
    
    
    
    Page orIn Form 10-K
    
    Description
    
    LocationPART IItem 1.
    
    Business
    
    1Item 1A.
    
    Risk Factors
    
    9Item 1B.
    
    Unresolved Staff Comments
    
    13Item 2.
    
    Properties
    
    14Item 3.
    
    Legal Proceedings
    
    14Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    14PART IIItem 5.
    
    Market for the Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    15Item 6.
    
    Selected Financial Data
    
    17Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operation
    
    18Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    36Item 8.
    
    Financial Statements and Supplementary Data
    
    37Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    37Item 9A.
    
    Controls and Procedures
    
    37Item 9A(T).
    
    Controls and Procedures
    
    37Item 9B.
    
    Other Information
    
    38PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    38Item 11.
    
    Executive Compensation
    
    38Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    38Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    38Item 14.
    
    Principal Accountant Fees and Services
    
    38PART IVItem 15.
    
    Exhibits, Financial Statement Schedules
    
    39Signatures
    
    
    
    42EX-10.7 COMPENSATION ARRANGEMENTS WITH REMER Y. BRINSON, IIIEX-10.10         COMPENSATION ARRANGEMENTS WITH BRADLEY J. GREGORYEX-21.1 SUBSIDIARIES OF THE REGISTRANTEX-23.1 CONSENT OF CHERRY, BEKAERT & HOLLAND, L.L.P.EX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE PFOEX-32.1 SECTION 906 CERTIFICATION OF THE CEO AND THE PFOEX-99.1 FINANCIAL STATEMENTS
  (i)




---



##### Table of Contents



Special Note Regarding Forward-Looking Statements
  
 PART I
 
 Item 1 . Business
 General
     1




---



##### Table of Contents



Branch
    
    Date OpenedHill Street Office, Thomson, Georgia
    
    January 1989Daniel Village Office, Augusta, Georgia
    
    March 1999West Town Office, Martinez, Georgia
    
    October 1999Medical Center Office, Augusta, Georgia
    
    January 2001Furys Ferry Road Office, Martinez, Georgia
    
    April 2002Main Office, Augusta, Georgia
    
    September 2005
    Market Area and Competition
   Asset/Liability Management
  2




---



##### Table of Contents



Correspondent Banking
   Data Processing
  Employees
  Monetary Policies
  Supervision and Regulation
  3




---



##### Table of Contents



The Company
 Bank Holding Company Regulation.
 
    
    acquiring direct or indirect ownership or control of more than 5% of the voting shares
of any bank;
    
    taking any action that causes a bank to become a subsidiary of a bank holding company;
    
    merging or consolidating with another bank holding company; or
    
    acquiring most other operating companies.
   Financial Services Modernization
 
    
    allows bank holding companies that qualify as financial holding companies to engage in
a substantially broader range of non-banking activities than was permissible under prior
law;
    
    allows insurers and other financial services companies to acquire banks;
    
    allows national banks, and some state banks, either directly or through operating
subsidiaries, to engage in certain non-banking financial activities;
    
    removes various restrictions that applied to bank holding company ownership of
securities firms and mutual fund advisory companies; and
    
    establishes the overall regulatory structure applicable to bank holding companies that
also engage in insurance and securities operations.
  4




---



##### Table of Contents



Transactions with Affiliates.
 Tie-In Arrangements.
 Source of Strength.
 Subsidiary Dividends.
  5




---



##### Table of Contents



State Law Restrictions.
 The Bank
 General
 Community Reinvestment Act.
 Insider Credit Transactions
 Federal Deposit Insurance Corporation Improvement Act
 Interstate Banking and Branching.
 6




---



##### Table of Contents



Deposit Insurance and Assessments.
 Capital Adequacy
    7




---



##### Table of Contents



Other Laws and Regulations
 International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001.
  Sarbanes-Oxley Act of 2002
  Privacy.
 8




---



##### Table of Contents



Future Legislation.
 
 Item 1A. Risk Factors
  An economic downturn, especially one affecting Richmond, Columbia and McDuffie counties, could
adversely affect our business.
  Weakness in the economy and in the real estate market, including specific weakness within our
geographic footprint, may adversely affect the Company.
  Weakness in the real estate market, including the secondary residential mortgage loan markets, has
adversely affected us and may continue to adversely affect us.
  9




---



##### Table of Contents



Our loan portfolio includes a substantial amount of commercial real estate and construction and
development loans, which may have more risks than residential or consumer loans
   Many of our borrowers have more than one loan or credit relationship with us.
  Our decisions regarding credit risk and reserves for loan losses may materially and adversely
affect our business.
  
    
    the duration of the credit;
    
    credit risks of a particular customer;
    
    changes in economic and industry conditions; and
    
    in the case of a collateralized loan, risks resulting from uncertainties about the
future value of the collateral.
  10




---



##### Table of Contents



We face strong competition for customers, which could prevent us from obtaining customers and may
cause us to pay higher interest rates to attract deposits.
  Changes in interest rates may reduce our profitability.
  Our recent operating results may not be indicative of our future operating results.
  We could be adversely affected by the loss of one or more key personnel or by an inability to
attract and retain employees.
  11




---



##### Table of Contents



The success of our growth strategy depends on our ability to identify and recruit individuals with
experience and relationships in the markets in which we intend to expand.
  We will face risks with respect to future expansion and acquisitions or mergers.
  Our growth may require us to raise additional capital that may not be available when it is needed
or may not be available on terms acceptable to us.
  12




---



##### Table of Contents



We are subject to extensive regulation that could limit or restrict our activities.
   Efforts to comply with the Sarbanes-Oxley Act have involved significant expenditures, and
non-compliance with the Sarbanes-Oxley Act may adversely affect us.
   
 Item 1B. Unresolved Staff Comments
  13




---



##### Table of Contents



Item 2. Properties
  Branch
    
    Date OpenedHill Street Office, Thomson, Georgia
    
    January 1989Daniel Village Office, Augusta, Georgia
    
    March 1999West Town Office, Martinez, Georgia
    
    October 1999Medical Center Office, Augusta, Georgia
    
    January 2001Furys Ferry Road Office, Martinez, Georgia
    
    April 2002Main Office, Augusta, Georgia
    
    September 2005
   
 Item 3 . Legal Proceedings
  
 Item 4 . Submission of Matters to a Vote of Security Holders
  14




---



##### Table of Contents



PART II
 
 Item 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities.
 Market Information
  High
    
    LowFiscal year ended December 31, 2007First Quarter
    
    $
    14.10
    
    
    $
    12.90Second Quarter
    
    $
    14.00
    
    
    $
    12.90Third Quarter
    
    $
    13.50
    
    
    $
    13.00Fourth Quarter
    
    $
    13.20
    
    
    $
    10.90Fiscal year ended December 31, 2006First Quarter
    
    $
    16.00
    
    
    $
    13.82Second Quarter
    
    $
    15.50
    
    
    $
    13.50Third Quarter
    
    $
    16.60
    
    
    $
    13.95Fourth Quarter
    
    $
    16.65
    
    
    $
    12.80
 Holders of Common Stock
  Dividends
   15




---



##### Table of Contents



Equity Compensation Plan Information
  Number of securitiesNumber of
    
    
    
    
    
    remaining availablesecurities to be
    
    
    
    
    
    for future issuanceissued upon
    
    Weighted-average
    
    under equityexercise of
    
    exercise price of
    
    compensation plansoutstanding
    
    outstanding
    
    (excludingoptions, warrants
    
    options, warrants
    
    securitiesand rights
    
    and rights
    
    reflected in columnPlan category
    
    (a)
    
    (b)
    
    (a)) (c)Equity compensation plans approved
by security holders:1997 Stock Option Plan
    
    
    282,055
    
    
    $
    6.98
    
    
    
    2004 Incentive Plan
    
    
    42,386
    
    
    $
    14.71
    
    
    
    286,739Equity compensation plans not
approved by security holders
    
    
    N/A
    
    
    
    N/A
    
    
    
    78,027Total
    
    
    324,441
    
    
    $
    7.99
    
    
    
    364,766
 Director Stock Purchase Plan
  16




---



##### Table of Contents



Item 6. Selected Financial Data
  At and for the Years Ended December 31,($ in thousands, except per share data)2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003Selected Balance Sheet Data:Assets
    
    $
    447,869
    
    
    $
    417,471
    
    
    $
    349,481
    
    
    $
    332,393
    
    
    $
    266,025Investment securities
    
    
    60,393
    
    
    
    55,404
    
    
    
    39,362
    
    
    
    43,375
    
    
    
    35,594Loans, held for investment
    
    
    322,201
    
    
    
    280,883
    
    
    
    248,311
    
    
    
    216,728
    
    
    
    174,567Loans, held for sale
    
    
    39,547
    
    
    
    56,758
    
    
    
    40,064
    
    
    
    56,729
    
    
    
    34,219Allowance for loan losses
    
    
    5,059
    
    
    
    4,386
    
    
    
    3,756
    
    
    
    3,416
    
    
    
    3,164Deposits
    
    
    379,966
    
    
    
    341,342
    
    
    
    304,440
    
    
    
    257,780
    
    
    
    221,656Short-term borrowings
    
    
    17,373
    
    
    
    38,561
    
    
    
    13,342
    
    
    
    46,987
    
    
    
    19,993Accrued interest
    
    
    3,268
    
    
    
    3,214
    
    
    
    1,539
    
    
    
    785
    
    
    
    531Long-term debt
    
    
    10,600
    
    
    
    700
    
    
    
    800
    
    
    
    900
    
    
    
    1,000Other liabilities
    
    
    691
    
    
    
    1,528
    
    
    
    751
    
    
    
    573
    
    
    
    981Shareholders equity
    
    
    35,971
    
    
    
    32,126
    
    
    
    28,609
    
    
    
    25,368
    
    
    
    21,864Selected Results of Operations Data:Interest income
    
    
    29,019
    
    
    
    25,335
    
    
    
    20,876
    
    
    
    16,088
    
    
    
    15,159Interest expense
    
    
    15,706
    
    
    
    11,969
    
    
    
    8,420
    
    
    
    4,468
    
    
    
    4,911Net interest income
    
    
    13,313
    
    
    
    13,366
    
    
    
    12,456
    
    
    
    11,620
    
    
    
    10,248Provision for loan losses
    
    
    909
    
    
    
    898
    
    
    
    1,022
    
    
    
    808
    
    
    
    880Net interest income after provision for
provision for loan losses
    
    
    12,404
    
    
    
    12,468
    
    
    
    11,434
    
    
    
    10,812
    
    
    
    9,368Non-interest income
    
    
    9,932
    
    
    
    9,800
    
    
    
    10,331
    
    
    
    10,571
    
    
    
    15,540Non-interest expense
    
    
    17,816
    
    
    
    17,911
    
    
    
    16,368
    
    
    
    15,714
    
    
    
    16,503Income before taxes
    
    
    4,520
    
    
    
    4,357
    
    
    
    5,397
    
    
    
    5,669
    
    
    
    8,405Income tax expense
    
    
    1,619
    
    
    
    1,460
    
    
    
    1,942
    
    
    
    2,167
    
    
    
    3,373Net income
    
    $
    2,901
    
    
    $
    2,897
    
    
    $
    3,455
    
    
    $
    3,502
    
    
    $
    5,032Per Share DataNet income  basic
    
    $
    0.85
    
    
    $
    0.86
    
    
    $
    1.04
    
    
    $
    1.06
    
    
    $
    1.53Net income  diluted
    
    $
    0.83
    
    
    $
    0.83
    
    
    $
    0.98
    
    
    $
    0.99
    
    
    $
    1.41Book value
    
    $
    10.58
    
    
    $
    9.51
    
    
    $
    8.53
    
    
    $
    7.65
    
    
    $
    6.63Weighted average number of shares outstanding:Basic
    
    
    3,393,224
    
    
    
    3,370,277
    
    
    
    3,336,834
    
    
    
    3,305,534
    
    
    
    3,281,130Diluted
    
    
    3,508,606
    
    
    
    3,489,564
    
    
    
    3,524,294
    
    
    
    3,521,876
    
    
    
    3,560,495
 At and for the Years Ended December 31,2007
    
    2006
    
    2005
    
    2004
    
    2003Performance Ratios:Return on average assets
    
    
    0.69
    %
    
    
    0.78
    %
    
    
    1.00
    %
    
    
    1.19
    %
    
    
    1.92
    %Return on average equity
    
    
    8.39
    %
    
    
    9.57
    %
    
    
    12.80
    %
    
    
    14.86
    %
    
    
    25.97
    %Net interest margin (1)
    
    
    3.36
    %
    
    
    3.81
    %
    
    
    3.78
    %
    
    
    4.14
    %
    
    
    3.96
    %Efficiency ratio (2)
    
    
    6.64
    %
    
    
    77.39
    %
    
    
    71.45
    %
    
    
    70.81
    %
    
    
    63.98
    %Loan to deposit ratio
    
    
    95.21
    %
    
    
    98.92
    %
    
    
    94.72
    %
    
    
    106.08
    %
    
    
    94.19
    %
 17




---



##### Table of Contents



At and for the Years Ended December 31,2007
    
    2006
    
    2005
    
    2004
    
    2003Asset Quality Ratios:Nonperforming loans to total loans
    
    
    3.20
    %
    
    
    0.68
    %
    
    
    0.59
    %
    
    
    0.61
    %
    
    
    0.51
    %Nonperforming assets to total assets
    
    
    2.69
    %
    
    
    0.69
    %
    
    
    0.61
    %
    
    
    0.63
    %
    
    
    0.42
    %Net charge-offs to average total loans
    
    
    0.08
    %
    
    
    0.09
    %
    
    
    0.24
    %
    
    
    0.23
    %
    
    
    0.07
    %Allowance for loan losses to
nonperforming loans
    
    
    43.77
    %
    
    
    191.86
    %
    
    
    219.91
    %
    
    
    205.29
    %
    
    
    299.05
    %Allowance for loan losses to total loans
    
    
    1.40
    %
    
    
    1.30
    %
    
    
    1.30
    %
    
    
    1.25
    %
    
    
    1.52
    %Capital Ratios:Average equity to average assetsLeverage ratio
    
    
    8.18
    %
    
    
    7.85
    %
    
    
    8.14
    %
    
    
    7.98
    %
    
    
    8.48
    %Tier 1 risk-based capital ratio
    
    
    9.39
    %
    
    
    9.25
    %
    
    
    9.91
    %
    
    
    9.11
    %
    
    
    10.38
    %Total risk-based capital ratio
    
    
    10.72
    %
    
    
    10.50
    %
    
    
    11.16
    %
    
    
    10.34
    %
    
    
    11.89
    %Growth Ratios and Other Data:Percentage change in net income
    
    
    0.1
    %
    
    
    (16.2
    %)
    
    
    (1.3
    %)
    
    
    (30.4
    %)
    
    
    51.1
    %Percentage change in diluted net
income per share
    
    
    0.0
    %
    
    
    (15.3
    %)
    
    
    (1.0
    %)
    
    
    (29.8
    %)
    
    
    48.4
    %Percentage change in assets
    
    
    7.3
    %
    
    
    19.5
    %
    
    
    5.1
    %
    
    
    24.9
    %
    
    
    3.4
    %Percentage change in loans
    
    
    7.1
    %
    
    
    17.1
    %
    
    
    5.5
    %
    
    
    31.0
    %
    
    
    (2.1
    %)Percentage change in deposits
    
    
    11.3
    %
    
    
    12.1
    %
    
    
    18.1
    %
    
    
    16.3
    %
    
    
    9.9
    %Percentage change in equity
    
    
    12.0
    %
    
    
    12.3
    %
    
    
    12.8
    %
    
    
    16.0
    %
    
    
    29.4
    %
 
 (1)
    
    Non-tax equivalent.(2)
    
    Computed by dividing non-interest
expense by the sum of net interest
income and non-interest income,
excluding gains and losses on the sale
of assets. 
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations
  Critical Accounting Policies
   18




---



##### Table of Contents



Accounting for Contingencies, Accounting by Creditors for Impairment of a Loan.
   19




---



##### Table of Contents



Consolidated Financial Information
  2007
    
    2006
    
    2005Total Assets
    
    Net Income
    
    Total Assets
    
    Net Income
    
    Total Assets
    
    Net Income(Dollar amounts in thousands)Consolidated
    
    $
    447,869
    
    
    $
    2,901
    
    
    $
    417,471
    
    
    $
    2,897
    
    
    $
    349,481
    
    
    $
    3,455Bank only
    
    $
    447,852
    
    
    $
    3,155
    
    
    $
    417,154
    
    
    $
    3,040
    
    
    $
    349,368
    
    
    $
    3,604
   Results of Operations  Comparison of 2007 and 2006
   20




---



##### Table of Contents



Comparison of 2006 and 2005
  21




---



##### Table of Contents



22




---



##### Table of Contents



Distribution of Assets, Liabilities and Shareholders Equity; Interest Rates and Interest
Differential
  23




---



##### Table of Contents



CONSOLIDATED AVERAGE BALANCE SHEETS
(Dollar amounts in thousands)
 Year Ended December 31,2007
    
    
    2006
    
    
    2005Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    AverageAverage
    
    
    Income/
    
    
    Yield /
    
    
    Average
    
    
    Income/
    
    
    Yield /
    
    
    Average
    
    
    Income/
    
    
    Yield /Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    RateASSETSINTEREST-EARNING ASSETSLoans, net of unearned income
    
    $
    336,434
    
    
    $
    25,998
    
    
    
    7.73
    %
    
    $
    302,778
    
    
    $
    23,144
    
    
    
    7.64
    %
    
    $
    286,924
    
    
    $
    19,263
    
    
    
    6.71
    %Investment securities
    
    
    57,463
    
    
    
    2,760
    
    
    
    4.80
    %
    
    
    47,153
    
    
    
    2,053
    
    
    
    4.35
    %
    
    
    40,951
    
    
    
    1,549
    
    
    
    3.78
    %Fed funds sold & cash in banks
    
    
    4,887
    
    
    
    261
    
    
    
    5.35
    %
    
    
    2,788
    
    
    
    138
    
    
    
    4.95
    %
    
    
    2,008
    
    
    
    64
    
    
    
    3.19
    %Total interest-earning assets
    
    
    398,784
    
    
    
    29,019
    
    
    
    7.28
    %
    
    
    352,719
    
    
    
    25,335
    
    
    
    7.18
    %
    
    
    329,883
    
    
    
    20,876
    
    
    
    6.33
    %NON-INTEREST-EARNING ASSETSCash and due from banks
    
    
    7,530
    
    
    
    
    
    
    
    
    
    
    
    7,404
    
    
    
    
    
    
    
    
    
    
    
    6,235Bank premises and fixed assets
    
    
    10,623
    
    
    
    
    
    
    
    
    
    
    
    10,879
    
    
    
    
    
    
    
    
    
    
    
    9,555Accrued interest receivable
    
    
    2,031
    
    
    
    
    
    
    
    
    
    
    
    1,779
    
    
    
    
    
    
    
    
    
    
    
    1,479Other assets
    
    
    6,746
    
    
    
    
    
    
    
    
    
    
    
    4,010
    
    
    
    
    
    
    
    
    
    
    
    2,598Allowance for loan losses
    
    
    (4,640
    )
    
    
    
    
    
    
    
    
    
    
    (4,039
    )
    
    
    
    
    
    
    
    
    
    
    (3,877
    )Total assets
    
    $
    421,074
    
    
    
    
    
    
    
    
    
    
    $
    372,752
    
    
    
    
    
    
    
    
    
    
    $
    345,873LIABILITIES AND SHAREHOLDERS
EQUITYINTEREST-BEARING DEPOSITSNOW accounts
    
    $
    28,935
    
    
    $
    478
    
    
    
    1.65
    %
    
    $
    29,395
    
    
    $
    497
    
    
    
    1.69
    %
    
    $
    32,212
    
    
    $
    494
    
    
    
    1.53
    %Savings accounts
    
    
    68,691
    
    
    
    2,928
    
    
    
    4.26
    %
    
    
    53,603
    
    
    
    1,994
    
    
    
    3.72
    %
    
    
    56,234
    
    
    
    1,542
    
    
    
    2.74
    %Money market accounts
    
    
    10,982
    
    
    
    307
    
    
    
    2.79
    %
    
    
    18,782
    
    
    
    555
    
    
    
    2.96
    %
    
    
    13,001
    
    
    
    348
    
    
    
    2.68
    %Time accounts
    
    
    222,664
    
    
    
    11,201
    
    
    
    5.03
    %
    
    
    178,982
    
    
    
    7,760
    
    
    
    4.34
    %
    
    
    145,226
    
    
    
    4,742
    
    
    
    3.27
    %Total interest-bearing deposits
    
    
    331,272
    
    
    
    14,914
    
    
    
    4.50
    %
    
    
    280,762
    
    
    
    10,806
    
    
    
    3.85
    %
    
    
    246,673
    
    
    
    7,126
    
    
    
    2.89
    %OTHER INTEREST-BEARING
LIABILITIESBorrowed funds
    
    
    15,721
    
    
    
    792
    
    
    
    5.04
    %
    
    
    21,592
    
    
    
    1,163
    
    
    
    5.39
    %
    
    
    34,052
    
    
    
    1,294
    
    
    
    3.80
    %Total interest-bearing
liabilities
    
    
    346,993
    
    
    
    15,706
    
    
    
    4.53
    %
    
    
    302,354
    
    
    
    11,969
    
    
    
    3.96
    %
    
    
    280,725
    
    
    
    8,420
    
    
    
    3.00
    %NON-INTEREST-BEARING
LIABILITIES AND
SHAREHOLDERS EQUITYDemand deposits
    
    
    34,789
    
    
    
    
    
    
    
    
    
    
    
    36,717
    
    
    
    
    
    
    
    
    
    
    
    36,273Other liabilities
    
    
    4,922
    
    
    
    
    
    
    
    
    
    
    
    3,433
    
    
    
    
    
    
    
    
    
    
    
    1,887Shareholders equity
    
    
    34,370
    
    
    
    
    
    
    
    
    
    
    
    30,248
    
    
    
    
    
    
    
    
    
    
    
    26,988Total liabilities and
shareholders equity
    
    $
    421,074
    
    
    
    
    
    
    
    
    
    
    $
    372,752
    
    
    
    
    
    
    
    
    
    
    $
    345,873Interest rate spread
    
    
    
    
    
    
    
    
    
    
    2.75
    %
    
    
    
    
    
    
    
    
    
    
    3.22
    %
    
    
    
    
    
    
    
    
    
    
    3.33
    %Net interest income
    
    
    
    
    
    $
    13,313
    
    
    
    
    
    
    
    
    
    
    $
    13,366
    
    
    
    
    
    
    
    
    
    
    $
    12,456Net interest margin
    
    
    
    
    
    
    
    
    
    
    3.34
    %
    
    
    
    
    
    
    
    
    
    
    3.79
    %
    
    
    
    
    
    
    
    
    
    
    3.78
    %
 24




---



##### Table of Contents



Year Ended December 31,2007
    
    
    2006
    
    
    2005Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    AverageAverage
    
    
    Income/
    
    
    Yield /
    
    
    Average
    
    
    Income/
    
    
    Yield /
    
    
    Average
    
    
    Income/
    
    
    Yield /Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    RateAverage interest-earning
assets to average total assets
    
    
    
    
    
    
    
    
    
    
    94.71
    %
    
    
    
    
    
    
    
    
    
    
    94.63
    %
    
    
    
    
    
    
    
    
    
    
    95.38
    %Average loans to average
deposits
    
    
    
    
    
    
    
    
    
    
    91.91
    %
    
    
    
    
    
    
    
    
    
    
    95.37
    %
    
    
    
    
    
    
    
    
    
    
    101.41
    %
 Rate/Volume Analysis of Net Interest Income
  Year Ended December 31, 2007
    
    
    Year Ended December 31, 2006Compared with
    
    
    Compared withYear Ended December 31, 2006
    
    
    Year Ended December 31, 2005(in thousands)Increase (Decrease) Due toVolume
    
    
    Rate
    
    
    Total
    
    
    Volume
    
    
    Rate
    
    
    TotalInterest earned on:Tax-exempt securities
    
    $
    64
    
    
    $
    32
    
    
    $
    96
    
    
    $
    31
    
    
    $
    28
    
    
    $
    59Taxable securities
    
    
    379
    
    
    
    232
    
    
    
    611
    
    
    
    200
    
    
    
    245
    
    
    
    445Federal funds sold and cash in
banks
    
    
    106
    
    
    
    17
    
    
    
    123
    
    
    
    23
    
    
    
    51
    
    
    
    74Net loans and loans held for sale
    
    
    2,573
    
    
    
    281
    
    
    
    2,854
    
    
    
    1,064
    
    
    
    2,817
    
    
    
    3,881Total interest income
    
    $
    3,122
    
    
    $
    562
    
    
    $
    3,684
    
    
    $
    1,318
    
    
    $
    3,141
    
    
    $
    4,459Interest paid on:NOW deposits
    
    
    (8
    )
    
    
    (11
    )
    
    
    (19
    )
    
    
    (43
    )
    
    
    46
    
    
    
    3Money market deposits
    
    
    (230
    )
    
    
    (18
    )
    
    
    (248
    )
    
    
    155
    
    
    
    52
    
    
    
    207Savings deposits
    
    
    561
    
    
    
    373
    
    
    
    934
    
    
    
    (72
    )
    
    
    524
    
    
    
    452Time deposits
    
    
    1,894
    
    
    
    1,547
    
    
    
    3,441
    
    
    
    1,102
    
    
    
    1,916
    
    
    
    3,018Borrowed funds
    
    
    (351
    )
    
    
    (20
    )
    
    
    (371
    )
    
    
    (473
    )
    
    
    342
    
    
    
    (131
    )Total interest expense
    
    $
    1,866
    
    
    $
    1,871
    
    
    $
    3,737
    
    
    $
    669
    
    
    $
    2,880
    
    
    $
    3,549Increase (decrease) in net
interest income
    
    $
    1,256
    
    
    $
    (1,309
    )
    
    $
    (53
    )
    
    $
    649
    
    
    $
    261
    
    
    $
    910
 Deposits
  25




---



##### Table of Contents



Year Ended
    
    Year Ended
    
    Year EndedDecember 31, 2007
    
    December 31, 2006
    
    December 31, 2005Average
    
    
    
    
    
    Average
    
    
    
    
    
    AverageAverage
    
    Rate
    
    Average
    
    Rate
    
    Average
    
    RateAmount
    
    Paid
    
    Amount
    
    Paid
    
    Amount
    
    PaidDeposit CategoryNon-interest
bearing demand
deposits
    
    $
    35,062
    
    
    
    
    
    
    $
    36,717
    
    
    
    
    
    
    $
    36,273
    
    
    
    NOW and
money market deposits
    
    
    39,917
    
    
    
    1.97
    %
    
    
    48,177
    
    
    
    2.18
    %
    
    
    45,213
    
    
    
    1.86
    %Savings deposits
    
    
    68,691
    
    
    
    4.26
    %
    
    
    53,603
    
    
    
    3.72
    %
    
    
    56,234
    
    
    
    2.74
    %Time deposits
    
    
    222,664
    
    
    
    5.03
    %
    
    
    178,982
    
    
    
    4.34
    %
    
    
    145,226
    
    
    
    3.27
    %
  Three months or less
    
    $
    22,489Over three months through six months
    
    
    21,112Over six months through twelve months
    
    
    44,239Over twelve months
    
    
    2,500Total
    
    $
    90,340
 Borrowed Funds
    26




---



##### Table of Contents



Loan Portfolio
       27




---



##### Table of Contents



December 31,Type of Loan
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003(In thousands)Commercial, financial and
agricultural
    
    $
    29,582
    
    
    $
    27,692
    
    
    $
    29,945
    
    
    $
    30,820
    
    
    $
    24,552Real estate  construction
    
    
    89,580
    
    
    
    73,502
    
    
    
    55,737
    
    
    
    46,581
    
    
    
    37,201Real estate  mortgage
    
    
    192,668
    
    
    
    169,141
    
    
    
    152,497
    
    
    
    127,691
    
    
    
    99,179Installment and consumer
    
    
    10,487
    
    
    
    10,609
    
    
    
    10,189
    
    
    
    11,705
    
    
    
    15,500Subtotal
    
    $
    322,317
    
    
    $
    280,944
    
    
    $
    248,368
    
    
    $
    216,797
    
    
    $
    176,432Less:Unearned income and deferred loan
fees
    
    
    (116
    )
    
    
    (61
    )
    
    
    (57
    )
    
    
    (69
    )
    
    
    (65
    )Allowance for possible loan losses
    
    
    (5,059
    )
    
    
    (4,386
    )
    
    
    (3,756
    )
    
    
    (3,416
    )
    
    
    (3,164
    )Total (net of allowance)
    
    $
    317,142
    
    
    $
    276,497
    
    
    $
    244,555
    
    
    $
    213,312
    
    
    $
    173,203
   Due in 1Year or
    
    
    Due in 1 to
    
    
    Due AfterType of Loan
    
    Less
    
    
    5 Years
    
    
    5 Years
    
    
    Total(In thousands)Commercial, financial
and agricultural
    
    $
    19,757
    
    
    $
    9,054
    
    
    $
    771
    
    
    $
    29,582Real estate-construction
    
    
    84,000
    
    
    
    5,580
    
    
    
    
    
    
    
    89,580Total
    
    $
    103,757
    
    
    $
    14,634
    
    
    $
    771
    
    
    $
    119,162
  Loans due after 1 year with predetermined interest rates
    
    $
    11,996Loans due after 1 year with floating interest rates
    
    $
    3,409
 28




---



##### Table of Contents



December 31,2007
    
    2006
    
    2005
    
    2004
    
    2003(Dollars in thousands)Loans accounted for
on a non-accrual
basisNumber
    
    
    65
    
    
    
    49
    
    
    
    73
    
    
    
    75
    
    
    
    58Amount
    
    $
    11,558
    
    
    $
    2,286
    
    
    $
    1,708
    
    
    $
    1,664
    
    
    $
    1,057Accruing loans
which are
contractually past
due 90 days or more
as to principal and
interest paymentsNumber
    
    
    4
    
    
    
    2
    
    
    
    10
    
    
    
    6
    
    
    
    13Amount
    
    $
    18
    
    
    $
    71
    
    
    $
    297
    
    
    $
    444
    
    
    $
    496
    29




---



##### Table of Contents



Summary of Loan Loss Experience
  Years Ended December 31,2007
    
    2006
    
    2005
    
    2004
    
    2003(Dollar amounts in thousands)Allowance, beginning of year
    
    $
    4,386
    
    
    $
    3,756
    
    
    $
    3,416
    
    
    $
    3,164
    
    
    $
    2,436Charge-offs:Commercial, financial and
agricultural
    
    
    163
    
    
    
    106
    
    
    
    521
    
    
    
    240
    
    
    
    55Installment and consumer
    
    
    97
    
    
    
    95
    
    
    
    129
    
    
    
    127
    
    
    
    141Real estate  mortgage
    
    
    28
    
    
    
    98
    
    
    
    73
    
    
    
    333
    
    
    
    10288
    
    
    
    299
    
    
    
    723
    
    
    
    700
    
    
    
    206Recoveries:Commercial, financial and
agricultural
    
    
    10
    
    
    
    16
    
    
    
    34
    
    
    
    
    
    
    
    Installment and consumer
    
    
    31
    
    
    
    7
    
    
    
    7
    
    
    
    14
    
    
    
    53Real estate  mortgage
    
    
    11
    
    
    
    8
    
    
    
    
    
    
    
    130
    
    
    
    152
    
    
    
    31
    
    
    
    41
    
    
    
    144
    
    
    
    54Net (charge-offs) recoveries
    
    
    (236
    )
    
    
    (268
    )
    
    
    (682
    )
    
    
    (556
    )
    
    
    (152
    )Provision charged to operations
    
    
    909
    
    
    
    898
    
    
    
    1,022
    
    
    
    808
    
    
    
    880Allowance, end of year
    
    $
    5,059
    
    
    $
    4,386
    
    
    $
    3,756
    
    
    $
    3,416
    
    
    $
    3,164Ratio of net (charge-offs)
recoveries during the period
to average loans outstanding
during the period
    
    
    (.07
    %)
    
    
    (.09
    %)
    
    
    (.24
    %)
    
    
    (.23
    %)
    
    
    (.07
    %)
 Loan Loss Allowance
  30




---



##### Table of Contents



2007
    
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent(Dollar amounts in thousands)Commercial,
financial and
agricultural
    
    $
    562
    
    
    
    9.2
    %
    
    $
    883
    
    
    
    9.9
    %
    
    $
    543
    
    
    
    12.1
    %
    
    $
    581
    
    
    
    14.2
    %
    
    $
    410
    
    
    
    13.9
    %Real estate

construction
    
    
    1,928
    
    
    
    27.8
    %
    
    
    1,442
    
    
    
    26.2
    %
    
    
    1,312
    
    
    
    22.4
    %
    
    
    1,165
    
    
    
    21.5
    %
    
    
    1,100
    
    
    
    21.1
    %Real estate

Mortgage
    
    
    2,247
    
    
    
    59.8
    %
    
    
    1,760
    
    
    
    60.2
    %
    
    
    1,671
    
    
    
    61.4
    %
    
    
    1,432
    
    
    
    58.9
    %
    
    
    1,385
    
    
    
    56.2
    %Consumer and
installment
    
    
    195
    
    
    
    3.2
    %
    
    
    191
    
    
    
    3.7
    %
    
    
    136
    
    
    
    4.1
    %
    
    
    152
    
    
    
    5.4
    %
    
    
    249
    
    
    
    8.8
    %Unallocated
    
    
    127
    
    
    
    
    
    
    
    110
    
    
    
    
    
    
    
    94
    
    
    
    
    
    
    
    86
    
    
    
    
    
    
    
    20
    
    
    
    Total
    
    $
    5,059
    
    
    
    
    
    
    $
    4,386
    
    
    
    
    
    
    $
    3,756
    
    
    
    
    
    
    $
    3,416
    
    
    
    
    
    
    $
    3,164
      31




---



##### Table of Contents



Investments
   December 31,2007
    
    
    2006
    
    
    2005(In thousands)Obligations of the U.S. Treasury and other U.S
government agencies
    
    $
    32,148
    
    
    $
    26,177
    
    
    $
    16,681Mortgage-backed securities
    
    
    19,332
    
    
    
    21,415
    
    
    
    17,041Obligations of States and political subdivisions
    
    
    7,243
    
    
    
    5,681
    
    
    
    3,607Corporate obligations
    
    
    183
    
    
    
    
    
    
    
    1,008Total investment securities
    
    $
    58,906
    
    
    $
    53,273
    
    
    $
    38,337Federal Home Loan Bank stock
    
    
    1,487
    
    
    
    2,131
    
    
    
    1,025Total investment securities and FHLB stock
    
    $
    60,393
    
    
    $
    55,404
    
    
    $
    39,362
 32




---



##### Table of Contents



Maturities of Investment SecuritiesAfter One
    
    After FiveWithin
    
    Through
    
    Through
    
    AfterOne Year
    
    Five Years
    
    Ten Years
    
    Ten Years(In thousands)Obligations of the U.S. Treasury and other U.S.
government agencies
    
    
    1,745
    
    
    
    5,074
    
    
    
    12,939
    
    
    
    12,390Mortgage-backed securities
    
    
    487
    
    
    
    4,173
    
    
    
    
    
    
    
    14,672Obligations of States and political subdivisions
    
    
    
    
    
    
    551
    
    
    
    3,191
    
    
    
    3,501Corporate obligations
    
    
    
    
    
    
    
    
    
    
    183
    
    
    
    Federal home loan bank stock
    
    
    1,487
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    3,719
    
    
    
    9,798
    
    
    
    16,313
    
    
    
    30,563
 Weighted Average YieldsAfter One
    
    After FiveWithin
    
    Through
    
    Through
    
    AfterOne Year
    
    Five Years
    
    Ten Years
    
    Ten YearsObligations of the U.S. Treasury and other U.S.
government agencies
    
    
    4.34
    %
    
    
    4.42
    %
    
    
    5.72
    %
    
    
    5.86
    %Mortgage-backed securities
    
    
    3.42
    %
    
    
    3.92
    %
    
    
    
    
    
    
    5.01
    %Obligations of States and political subdivisions
    
    
    
    
    
    
    3.91
    %
    
    
    5.88
    %
    
    
    6.03
    %Corporate obligations
    
    
    
    
    
    
    
    
    
    
    5.62
    %
    
    
    Federal home loan bank stock
    
    
    5.98
    %
    
    
    
    
    
    
    
    
    
    
    Total weighted average yield
    
    
    4.90
    %
    
    
    4.18
    %
    
    
    5.75
    %
    
    
    5.47
    %
    Return on Equity and Assets
  December 31,2007
    
    2006
    
    2005Return on Average Assets
    
    
    0.69
    %
    
    
    0.78
    %
    
    
    1.00
    %Return on Average Equity
    
    
    8.39
    %
    
    
    9.57
    %
    
    
    12.80
    %Dividend Payout
    
    
    
    
    
    
    
    
    
    
    Equity to Assets
    
    
    8.03
    %
    
    
    7.70
    %
    
    
    8.19
    %
 33




---



##### Table of Contents



Liquidity and Interest Rate Sensitivity
     5 years0  3 mos.
    
    
    3  12 mos.
    
    
    1  5 years
    
    
    or more
    
    
    TotalTaxable securities
    
    $
    999
    
    
    $
    1,233
    
    
    $
    9,247
    
    
    $
    40,184
    
    
    $
    51,663Tax-exempt securities
    
    
    
    
    
    
    
    
    
    
    551
    
    
    
    6,692
    
    
    
    7,243Federal funds sold and cash in banks
    
    
    6,744
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,744Loans
    
    
    204,841
    
    
    
    40,346
    
    
    
    112,138
    
    
    
    4,423
    
    
    
    361,748Total rate sensitive assets
    
    
    212,584
    
    
    
    41,579
    
    
    
    121,936
    
    
    
    51,299
    
    
    
    427,398NOW and money market deposits
    
    
    37,155
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,155Savings deposits
    
    
    73,184
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    73,184Time deposits
    
    
    70,641
    
    
    
    141,768
    
    
    
    26,921
    
    
    
    5
    
    
    
    239,335Total rate sensitive deposits
    
    
    180,980
    
    
    
    141,768
    
    
    
    26,921
    
    
    
    5
    
    
    
    349,674Borrowed funds
    
    
    27,373
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,373Total rate sensitive liabilities
    
    
    208,353
    
    
    
    141,768
    
    
    
    26,921
    
    
    
    5
    
    
    
    377,047Excess of rate sensitive assets less rate
sensitive liabilities
    
    $
    4,231
    
    
    $
    (100,189
    )
    
    $
    95,015
    
    
    $
    51,294
    
    
    $
    50,351Cumulative ratio of rate sensitive assets
to liabilities
    
    
    102
    %
    
    
    73
    %
    
    
    100
    %
    
    
    113
    %Cumulative gap
    
    $
    4,231
    
    
    $
    (95,958
    )
    
    $
    (943
    )
    
    $
    50,351
 34




---



##### Table of Contents



Capital Resources
    MinimumDecember 31, 2007
    
    Regulatory RequirementBankTier 1 Capital ratio
    
    
    9.41
    %
    
    
    4.0
    %Total risk-based capital ratio
    
    
    10.74
    %
    
    
    8.0
    %Leverage ratio
    
    
    8.51
    %
    
    
    4.0
    %Company  ConsolidatedTier 1 Capital ratio
    
    
    9.39
    %
    
    
    4.0
    %Total risk-based capital ratio
    
    
    10.72
    %
    
    
    8.0
    %Leverage ratio
    
    
    8.18
    %
    
    
    4.0
    %
   Market Risk
    35




---



##### Table of Contents



Off-Balance Sheet Arrangements
   At
    
    
    AtDecember 31, 2007
    
    
    December 31, 2006(In thousands)Commitments to extend credit
    
    $
    40,492
    
    
    $
    79,828Standby letters of credit
    
    
    1,912
    
    
    
    2,389$
    42,404
    
    
    $
    82,217
 Contractual Obligations
  Payments Due by Period (in thousands)Less than
    
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    
    1 year
    
    

13 years
    
    
    35 years
    
    
    5 yearsLong-Term Debt
    
    $
    13,041
    
    
    $
    524
    
    
    $
    1,027
    
    
    $
    1,000
    
    
    $
    10,490Capital Lease Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Lease Obligations
    
    
    578
    
    
    
    286
    
    
    
    292
    
    
    
    
    
    
    
    Service Contract Obligations
    
    
    586
    
    
    
    118
    
    
    
    239
    
    
    
    229
    
    
    
    Time Deposits
    
    
    251,072
    
    
    
    222,907
    
    
    
    27,737
    
    
    
    423
    
    
    
    5$
    265,277
    
    
    $
    223,835
    
    
    $
    29,295
    
    
    $
    1,652
    
    
    $
    10,495
 
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk
  36




---



##### Table of Contents



Item 8 . Financial Statements and Supplementary Data
         
 Item 9 . Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure .
  
 Item 9A . Controls and Procedures .
  
 Item 9A(T) . Controls and Procedures .
 (a) Evaluation of Disclosure Controls and Procedures
  (b) Managements Annual Report on Internal Control over Financial Reporting
  37




---



##### Table of Contents



Item 9B . Other Information .
  
 PART III
  
 Item 10 . Directors, Executive Officers and Corporate Governance.
  
 Item 11 . Executive Compensation .
  
 Item 12 . Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters .
  
 Item 13 . Certain Relationships and Related Transactions, and Director Independence .
  
 Item 14 . Principal Accountant Fees and Services
  38




---



##### Table of Contents



PART IV
 
 Item 15 . Exhibits, Financial Statement Schedules .
 (a)1.
 Report of Independent Registered Public Accounting FirmConsolidated Statements of Financial Condition as of
December 31, 2007 and 2006Consolidated Statements of Income for the years ended
December 31, 2007, 2006 and 2005Consolidated Statements of Comprehensive Income
for the years ended December 31, 2007, 2006 and 2005Consolidated Statements of Shareholders Equity for
the years ended December 31, 2007, 2006 and 2005Consolidated Statements of Cash Flows for the years ended
December 31, 2007, 2006 and 2005Notes to Consolidated Financial Statements
 (a)2.
  (a)3 & (b). :
 ExhibitNumber
    
    
    
    Description of Exhibit3.1
    
    
    
    Articles of Incorporation of the Company (incorporated
herein by reference to the exhibit of the same number in
the Companys Registration Statement on Form SB-2 under
the Securities Act of 1933, as amended, Registration No.
333-69763, previously filed with the Commission).3.1.1
    
    
    
    Articles of Amendment to the Articles of Incorporation of
the Company (incorporated herein by reference to the
exhibit of the same number in the Companys Annual Report
on Form 10-KSB for the year ended December 31, 2000,
previously filed with the Commission).3.2
    
    
    
    By-Laws of the Company (incorporated herein by reference
to the exhibit of the same number in the Companys
Registration Statement on Form SB-2 under the Securities
Act of 1933, as amended
 39




---



##### Table of Contents



ExhibitNumber
    
    
    
    Description of Exhibit(Registration No. 333-69763)).10.1
    
    
    
    Employment Agreement dated October 6, 1997 between the
Company and Patrick G. Blanchard (incorporated herein by
reference to the exhibit of the same number in the
Companys Quarterly Report on Form 10-QSB for the quarter
ended September 30, 1997, previously filed with the
Commission).10.1.1
    
    
    
    Amendment No. 1 to Employment Agreement dated October 6,
1997 between First Bank of Georgia, the Company and
Patrick G. Blanchard, dated September 30, 1998
(incorporated herein by reference to the exhibit of the
same number in the Companys Registration Statement on
Form SB-2, as amended, Registration No. 333-69763,
previously filed with the Commission).10.1.2
    
    
    
    Amendment No. 2 to Employment Agreement dated October 6,
1997 between First Bank of Georgia, the Company and
Patrick G. Blanchard, dated December 23, 1998
(incorporated herein by reference to the exhibit of the
same number in the Companys Registration Statement on
Form SB-2, as amended, Registration No. 333-69763,
previously filed with the Commission).10.2
    
    
    
    1997 Stock Option Plan (incorporated herein by reference
to the exhibit of the same number in the Companys Annual
Report on Form 10-KSB for the year ended December 31,
2002, previously filed with the Commission).10.3
    
    
    
    Directors Stock Purchase Plan (incorporated herein by
reference to the exhibit of the same number in the
Companys Annual Report on Form 10-KSB for the year ended
December 31, 2002, previously filed with the Commission).10.4
    
    
    
    2005 Incentive Plan (incorporated herein by reference to
Appendix A of the Companys Proxy Statement for its 2005
Annual Meeting of Shareholders, filed with the Commission
on May 5, 2005).10.5
    
    
    
    Form of Incentive Stock Option Agreement under the
Companys 2005 Incentive Plan (incorporated herein by
reference to the exhibit of the same number in the
Companys Annual Report on Form 10-KSB for the year ended
December 31, 2005, previously filed with the Commission).10.6
    
    
    
    Severance Protection Agreement between First Bank of
Georgia and Remer Y. Brinson, III, dated September 4,
2000 (incorporated herein by reference to the exhibit of
the same number in the Companys Annual Report on Form
10-K for the year ended December 31, 2006, previously
filed with the Commission).
 40




---



##### Table of Contents



ExhibitNumber
    
    
    
    Description of Exhibit10.7*
    
    
    
    Compensation Arrangements with Remer Y. Brinson, III.10.8
    
    
    
    First Bank of Georgia Annual Incentive Plan for Patrick
G. Blanchard and Remer Y. Brinson, III (incorporated
herein by reference to the exhibit of the same number in
the Companys Annual Report on Form 10-K for the year
ended December 31, 2006, previously filed with the
Commission).10.9
    
    
    
    Severance Protection Agreement between First Bank of
Georgia and Bradley J. Gregory, dated August 24, 2006
(incorporated herein by reference from Exhibit 10.1
contained in the Current Report on Form 8-K dated August
24, 2006, previously filed with the Commission).10.10*
    
    
    
    Compensation Arrangements with Bradley J. Gregory.14.1
    
    
    
    Code of Ethics (incorporated herein by reference from
Exhibit 99.2 contained in the Companys Annual Report on
Form 10-KSB for the year ended December 31, 2004,
previously filed with the Commission).21.1 *
    
    
    
    Subsidiaries of the Registrant.23.1 *
    
    
    
    Consent of Cherry, Bekaert & Holland, L.L.P.31.1 *
    
    
    
    Certification of President and Chief Executive Officer
Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.31.2 *
    
    
    
    Certification of Acting Principal Financial Officer
Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.32.1 *
    
    
    
    Certifications Pursuant to Section 906 of Sarbanes-Oxley
Act of 2002.99.1 *
    
    
    
    Financial Statements.
 
 *
    
    Filed herewith. 41




---



##### Table of Contents



SIGNATURES
  GEORGIA-CAROLINA BANCSHARES, INC.By:
    /s/ Patrick G. BlanchardDate:  March 28, 2008
    
    Patrick G. BlanchardPresident and Chief Executive Officer

(principal executive officer)Date:  March 28, 2008
    By:
    /s/ Bradley J. Gregory, Sr.Bradley J. Gregory, Sr.Senior Vice President & Chief Financial Officer
(principal financial and accounting officer) 42




---



##### Table of Contents



DIRECTORS
    
    DATE/s/ Patrick G. Blanchard
    
    March 28, 2008Patrick G. Blanchard/s/ Remer Y. Brinson, III
    
    March 28, 2008Remer Y. Brinson, III/s/ Mac A. Bowman
    
    March 28, 2008Mac A. Bowman/s/ Larry DeMeyers
    
    March 28, 2008Larry DeMeyers/s/ Philip G. Farr
    
    March 28, 2008Philip G. Farr/s/ Samuel A. Fowler, Jr.
    
    March 28, 2008Samuel A. Fowler, Jr./s/ Arthur J. Gay, Jr.
    
    March 28, 2008Arthur J. Gay, Jr./s/ J. Randall Hall
    
    March 28, 2008J. Randall Hall/s/ John W. Lee
    
    March 28, 2008John W. Lee/s/ Robert N. Wilson, Jr.
    
    March 28, 2008Robert N. Wilson, Jr./s/ Hugh L. Hamilton, Jr.
    
    March 28, 2008Hugh L. Hamilton, Jr./s/ William G. Hatcher, Sr.
    
    March 28, 2008William G. Hatcher/s/ George H. Inman
    
    March 28, 2008George H. Inman/s/ David W. Joesbury, Sr.
    
    March 28, 2008David W. Joesbury/s/ James L. Lemley, M.D.
    
    March 28, 2008James L. Lemley, M.D./s/ Julian W. Osbon
    
    March 28, 2008Julian W. Osbon/s/ Bennye M. Young
    
    March 28, 2008Bennye M. Young/s/ A. Montague Miller
    
    March 28, 2008A. Montague Miller
 43




---



##### Table of Contents



EXHIBITNUMBER
    
    DESCRIPTION OF EXHIBIT10.7
    
    Compensation Arrangements with Remer Y. Brinson, III.10.10
    
    Compensation Arrangements with Bradley J. Gregory.21.1
    
    Subsidiaries of the Registrant23.1
    
    Consent of Cherry, Bekaert & Holland, L.L.P.31.1
    
    Certification of President and Chief Executive Officer Pursuant to
Section 302 of Sarbanes-Oxley Act of 200231.2
    
    Certification of Acting Principal Financial Officer Pursuant to
Section 302 of Sarbanes-Oxley Act of 200232.1
    
    Certifications Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.99.1
    
    Financial Statements
 44