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                       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

                          Commission File No. 333-87763

                                NBG BANCORP, INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in Its Charter)


             Georgia                                58-2499542
     -----------------------          ---------------------------------------
    (State of Incorporation)          (I.R.S. Employer Identification Number)


                  2234 West Broad Street
                      Athens, Georgia                           30604
         ----------------------------------------             ---------
         (Address of Principal Executive Offices)             (Zip Code)



                                 (706) 355-3122
                 -----------------------------------------------
                (Issuer's Telephone Number, Including Area Code)


         Securities registered under Section 12(b) of the Exchange Act:


        Title of Each Class                Name of Exchange on Which Registered
        -------------------                -----------------------------------
               None                                           N/A



         Securities registered under Section 12(g) of the Exchange Act:

                     Common Stock, $1.00 par value per share

         Check  whether  the issuer:  (1) has filed all  reports  required to be
filed by Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or
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 in response to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of the  issuer'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|

         The issuer's revenues for its most recent fiscal year were $1,209,601.

         The aggregate  market value of the common stock held by  non-affiliates
of the issuer on March 16, 2001 was  $3,687,600.  As of such date,  no organized
trading market existed for the Common Stock of the issuer.  The aggregate market
value was  computed by reference to the fair market value of the Common Stock of
the issuer  based on recent sales of the Common  Stock.  For the purpose of this
response,  directors,  officers and holders of 5% or more of the issuer's common
stock  are  considered  the  affiliates  of the  issuer at that  date.  Although
directors  and  executive   officers  of  the  registrant  were  assumed  to  be
"affiliates" of the issuer for purposes of this calculation,  the classification
is not to be interpreted as an admission of such status.

         As of March 16, 2001,  there were 741,260 shares of the issuer's common
stock outstanding.

         Transitional Small Business Disclosure Format (check one):

                              Yes |_|   No |X|

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<PAGE>


                                     PART I

             CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

         Some of the statements in this Report,  including,  without limitation,
matters  discussed  under the caption  "Management's  Discussion and Analysis of
Financial  Condition and Results of Operations," as well as oral statements made
by NBG Bancorp, Inc. (the "Company"), The National Bank of Georgia (the "Bank"),
or the  officers,  directors  or  employees  of the  Company  and the Bank,  may
constitute "forward-looking statements" within the meaning of Section 27A of the
Securities  Act of 1933,  as amended  (the  "Securities  Act").  Forward-looking
statements include statements about the competitiveness of the banking industry,
potential  regulatory  obligations,  potential  economic  growth in our  primary
service area, our strategies and other statements that are not historical facts.
When  we use in  this  Report  words  like  "anticipate,"  "believe,"  "expect,"
"estimate"  and similar  expressions,  you should  consider them as  identifying
forward-looking statements. Because forward-looking statements involve risks and
uncertainties,  there are important  factors that could cause actual  results to
differ  significantly  from those  expressed  or implied by the  forward-looking
statements.  Such  forward-looking  statements  are  not  guarantees  of  future
performance and are subject to risks,  uncertainties  and other factors that may
cause the actual  results,  performance or achievements of the Company to differ
materially  from  any  results  expressed  or  implied  by such  forward-looking
statements.  Such factors include, without limitation, (i) increased competition
with other financial institutions,  (ii) lack of sustained growth in the economy
in Athens and Oconee  County,  Georgia,  (iii)  rapid  fluctuations  in interest
rates,  (iv) the  inability  of the Company and the Bank to maintain  regulatory
capital   standards,   and  (v)  changes  in  the   legislative  and  regulatory
environment. Many of such factors are beyond the Company's ability to control or
predict,   and  readers  are  cautioned  not  to  put  undue  reliance  on  such
forward-looking  statements.  The Company  disclaims any obligation to update or
revise any  forward-looking  statements  contained in this Report,  whether as a
result of new information, future events or otherwise.

ITEM 1.  DESCRIPTION OF BUSINESS

         References in this Report to "we," "us," and "our"  collectively  refer
to NBG Bancorp, Inc. and The National Bank of Georgia.

GENERAL

         NBG BANCORP, INC. The Company was incorporated as a Georgia corporation
on  September  23, 1999 to serve as a bank  holding  company for the Bank.  In a
public offering  conducted  during 1999 and 2000, the Company sold and issued an
aggregate  of 741,260  shares of common  stock,  par value  $1.00 per share,  at
$10.00 per  share.  With the prior  approval  of the Board of  Governors  of the
Federal  Reserve  System (the "Federal  Reserve") and the Georgia  Department of
Banking and Finance (the "Georgia  Department"),  the Company  purchased 100% of
the  Bank's  common  stock  by  injecting  approximately  $6,878,600  of the net
proceeds  from the  offering  into the Bank's  capital  accounts on May 2, 2000.
Accordingly, the Company became a registered bank holding company under the Bank
Holding Company Act of 1956, as amended, and the Financial  Institutions Code of
Georgia (the "FICG"). The Company  subsequently  injected an additional $434,000
of additional offering proceeds into the Bank.

         The Company has been  organized to make it easier for the Bank to serve
its future customers  requirements for financial  services.  The holding company
structure will provide  flexibility for expanding the Bank's banking business by
possibly acquiring other financial institutions and providing additional capital
and  banking-related  services.  A holding company structure will make it easier
for the Company to raise  capital for the Bank  because the Company will be able
to issue securities without the need for prior banking  regulatory  approval and
the  proceeds  of debt  securities  issued by the Company can be invested in the
Bank as primary capital.

         At December 31, 2000, the assets of the Company consisted  primarily of
its ownership of the capital stock of the Bank.

<PAGE>

         The  Company's  executive  office is located at the Bank's  facilities,
2234 West  Broad  Street,  Athens,  Georgia,  and its  telephone  number at such
location is (706) 355-3122. See "Item 2. Description of Properties."

BUSINESS OF THE BANK

         The Bank was  organized  as a  national  bank to  conduct a  commercial
banking business from Athens,  Georgia.  The Bank's primary federal regulator is
the  Office of the  Comptroller  of the  Currency  (the  "OCC")  and the  Bank's
deposits are insured by the Federal Deposit Insurance  Corporation (the "FDIC").
The Bank  commenced  operations on May 8, 2000.  The Bank was formed to meet the
banking needs of individuals and small-to medium-sized business.

         The Bank performs banking services  customary for full service banks of
similar size and  character.  Such  services  include  making real estate loans,
commercial  loans and customer loans,  providing other banking  services such as
cash management  services,  travelers checks,  and maintaining  deposit accounts
such as checking  accounts,  money  market  accounts,  savings  accounts,  and a
variety of certificates of deposit and IRA accounts.

LENDING SERVICES

         LENDING  POLICY.  The Bank was  established  to  generally  support the
Athens and Oconee County area.  Consequently,  the Bank aggressively lends money
to  creditworthy  borrowers  within  this  limited  geographic  area.  The  Bank
emphasizes  both  commercial  loans to small- and  medium-sized  businesses  and
professional   concerns  as  well  as  real  estate-related   loans,   including
construction  loans for residential and commercial  properties,  and primary and
secondary  mortgage  loans  for  the  acquisition  or  improvement  of  personal
residences. To a lesser extent, the Bank also makes consumer loans.

         To address the risks  inherent in making loans,  the Bank  maintains an
allowance  for loan losses based on, among other  things,  an  evaluation of the
Bank's loan loss  experience,  the amount of past due and  nonperforming  loans,
current  and  anticipated  economic  changes  and the  values  of  certain  loan
collateral.  Based  upon such  factors,  the  Bank's  management  makes  various
assumptions  and  judgments  about  the  ultimate  collectibility  of  the  loan
portfolio  and provide an  allowance  for  potential  loan  losses  based upon a
percentage of the outstanding balances and for specific loans. However,  because
there are  certain  risks  that  cannot be  precisely  quantified,  management's
judgment of the allowance is necessarily  an  approximation  and imprecise.  The
adequacy  and  methodology  of the  allowance  for loan  losses  is  subject  to
regulatory  examination  and compared to a peer group of financial  institutions
identified by the Bank's regulatory agencies.

         LOAN APPROVAL AND REVIEW. The Bank's loan approval policies provide for
various levels of officer lending authority. When the amount of total loans to a
single borrower exceeds that individual  officer's lending authority,  either an
officer  with a higher  lending  limit or the Bank's Loan  Committee  determines
whether to approve the loan request.  The Bank does not make any loans to any of
its directors or executive  officers unless its Board of Directors  approves the
loan, the terms of the loan are no more favorable than would be available to any
other  applicant with similar  credit factors not affiliated  with the Bank, and
the loan otherwise complies with applicable law.

         LENDING LIMITS.  The Bank's lending activities are subject to a variety
of lending limits imposed by law.  Differing limits apply in some  circumstances
based  on the  type  of  loan  or the  nature  of the  borrower,  including  the
borrower's  relationship to the Bank. In general,  however,  the Bank is able to
loan any one borrower a maximum  amount  equal to either:  (i) 15% of the Bank's
capital and  surplus,  or (ii) 25% of its capital and surplus if the excess over
15% is within  federal  guidelines,  which provide an exception to the 15% limit
for some types of secured debt. The Bank has not yet  established any minimum or
maximum loan limits other than the statutory  lending  limits  described  above.
These  limits  will  increase or decrease  as the Bank's  capital  increases  or
decreases as a result of its earnings or losses,  among other reasons.  The Bank
may sell participations in its loans to other financial institutions in order to
meet all of the lending needs of loan customers.


                                       2
<PAGE>

         CREDIT RISKS. The principal economic risk associated with each category
of loans that the Bank makes is the  creditworthiness of the borrower.  Borrower
creditworthiness  is affected by general economic conditions and the strength of
the services and retail market segments.  General  economic factors  affecting a
borrower's ability to repay include interest, inflation and employment rates, as
well as other factors affecting a borrower's customers, suppliers and employees.

         With respect to real estate loans generally,  the ability of a borrower
to repay a real  estate  loan will  depend  upon a number of  economic  factors,
including employment levels and fluctuations in the value of real estate. In the
case of a real estate  purchase  loan,  the  borrower may be unable to repay the
loans at the end of the loan term and may thus be forced to  refinance  the loan
at a higher  interest rate, or, in certain cases,  the borrower may default as a
result of its  inability to  refinance  the loan.  In either  case,  the risk of
nonpayment  by  the  borrower  is  increased.  In  the  case  of a  real  estate
construction  loan,  there is generally no income from the  underlying  property
during the construction  period, and the developer's  personal obligations under
the loan are  typically  limited.  Each of these  factors  increases the risk of
nonpayment by the borrower.  The Bank also faces additional  credit risks to the
extent that it engages in  adjustable  rate  mortgage  loans.  In the case of an
adjustable rate mortgage,  as interest rates increase,  the borrower's  required
payments increase,  thus increasing the potential for default. The marketability
of all real estate loans, including adjustable rate mortgages, is also generally
affected by the prevailing level of interest rates.

         The risks  associated  with  commercial  loans vary with many  economic
factors,  including the economy in the Athens and Oconee  County area.  The well
established  financial  institutions  in the Athens and Oconee  County  area are
likely to make  proportionately  more loans to large-sized  businesses  than the
Bank  will  make.  Many of the  Bank's  commercial  loans  are made to small- to
medium-sized businesses that may be less able to withstand competitive, economic
and financial pressures than larger borrowers. In addition,  because payments on
loans secured by commercial  property  generally depend to a large degree on the
results of operations and management of the properties,  repayment of such loans
may be subject,  to a greater extent than other loans, to adverse  conditions in
the real estate market or the economy.

         Consumer  loans  generally  involve  more credit risks than other loans
because of the type and nature of the  underlying  collateral  or because of the
absence  of any  collateral.  Consumer  loan  repayments  are  dependent  on the
borrower's  continuing  financial  stability  and  are  likely  to be  adversely
affected by job loss,  divorce and  illness.  Furthermore,  the  application  of
various  federal and state laws,  including  federal  and state  bankruptcy  and
insolvency  laws,  may limit the amount  which can be recovered on such loans in
the case of default. In most cases, any repossessed  collateral will not provide
an adequate  source of repayment of the outstanding  loan balance.  Although the
underwriting  process for consumer  loans  includes a comparison of the value of
the security,  if any, to the proposed loan amount,  the Bank cannot predict the
extent to which the  borrower's  ability to pay, and the value of the  security,
will be affected by prevailing economic and other conditions.

         REAL  ESTATE  LOANS.  The Bank  makes  commercial  real  estate  loans,
construction and development  loans,  and residential  real estate loans.  These
loans include some commercial loans where the Bank takes a security  interest in
real estate out of an abundance of caution and not as the  principal  collateral
for the loan,  but excludes home equity loans,  which are classified as consumer
loans.  As of December 31, 2000, real estate loans comprised 82.7% of the Bank's
loan portfolio.

         o         COMMERCIAL  REAL ESTATE.  Commercial  real estate loan terms
         generally are limited to five years or less,  although  payments may be
         structured on a longer amortization basis.  Interest rates may be fixed
         or  adjustable.  The Bank  generally  charges an  origination  fee.  We
         attempt to reduce  credit risk on our  commercial  real estate loans by
         emphasizing loans on  owner-occupied  office and retail buildings where
         the  ratio of the loan  principal  to the  value of the  collateral  as
         established  by  independent  appraisal  does  not  exceed  80% and net
         projected  cash flow available for debt service equals 120% of the debt
         service  requirement.  In  addition,  the  Bank  may  require  personal
         guarantees  from the  principal  owners of the property  supported by a
         review by the  Bank's  management  of the  principal  owners'  personal
         financial  statements.  Risks  associated  with  commercial real estate
         loans  include  fluctuations  in the  value  of  real


                                       3
<PAGE>

         estate,  new job creation trends,  tenant vacancy rates and the quality
         of the  borrower's  management.  The Bank attempts to limit its risk by
         analyzing  borrowers'  cash  flow and  collateral  value on an  ongoing
         basis.  The Bank competes for real estate loans with  competitors  that
         are well established in its primary service area.

         o           CONSTRUCTION  AND  DEVELOPMENT   LOANS.   Construction  and
         development loans are made both on a pre-sold and speculative basis. If
         the borrower  has entered into an agreement to sell the property  prior
         to  beginning  construction,  then  the loan is  considered  to be on a
         pre-sold  basis.  If the  borrower has not entered into an agreement to
         sell the  property  prior to beginning  construction,  then the loan is
         considered to be on a speculative  basis.  Construction and development
         loans are  generally  made with a term of nine  months and  interest is
         paid periodically.  The ratio of the loan principal to the value of the
         collateral as established by independent  appraisal  generally will not
         exceed 80%.  Speculative  loans are based on the  borrower's  financial
         strength and cash flow position.  Loan proceeds are disbursed  based on
         the  percentage  of  completion  and only  after the  project  has been
         inspected by an  experienced  construction  lender or appraiser.  Risks
         associated with construction loans include fluctuations in the value of
         real estate and new job creation trends.

         o          RESIDENTIAL REAL ESTATE.  The Bank's residential real estate
         loans  consist  of  residential  first and  second  mortgage  loans and
         residential  construction  loans.  The Bank offers  fixed and  variable
         rates on our mortgages with the  amortization  of first  mortgages with
         maturity  dates  of  three  years  and  beyond.  These  loans  are made
         consistent with the Bank's  appraisal  policy and with the ratio of the
         loan principal to the value of collateral as established by independent
         appraisal  generally  not to exceed 95%. We believe these loan to value
         ratios are  sufficient to compensate  for  fluctuations  in real estate
         market  value and to minimize  losses that could result from a downturn
         in the residential  real estate market.  The Bank has opened a mortgage
         department,  which will allow it to originate long term mortgages to be
         sold on the secondary market.  The Bank attempts to limit interest rate
         risk and credit risk on these loans by locking in the interest rate for
         each  loan  with  the  secondary  market  investor  and  receiving  the
         investor's underwriting approval before funding the loan.

         COMMERCIAL  LOANS.  Loans for  commercial  purposes in various lines of
businesses are also one of the primary  components of the Bank's loan portfolio.
The terms of these loans vary by purpose and by type of  underlying  collateral,
if any. The Bank  typically  makes  equipment  loans for a term of five years or
less at fixed or variable  rates,  with the loan fully  amortized over the term.
Equipment loans generally are secured by the financed  equipment,  and the ratio
of the loan principal to the value of the financed equipment or other collateral
is generally 80% or less. Loans to support working capital  typically have terms
not  exceeding  one  year  and  are  usually  secured  by  accounts  receivable,
inventory, or other collateral, as well as personal guarantees of the principals
of the  business.  For  loans  secured  by  accounts  receivable  or  inventory,
principal is typically repaid as the assets securing the loan are converted into
cash,  and for loans  secured  with  other  types of  collateral,  principal  is
typically due at maturity.  The quality of the commercial  borrower's management
and its  ability  both to  evaluate  properly  changes  in the supply and demand
characteristics  affecting  its markets for products and services and to respond
effectively to such changes are significant  factors in a commercial  borrower's
creditworthiness.  As of December 31, 2000,  commercial loans comprised 12.3% of
the Bank's loan portfolio.

         CONSUMER  LOANS.  The Bank makes a variety of loans to individuals  for
personal,  family  and  household  purposes,  including  secured  and  unsecured
installment and term loans, home equity loans and lines of credit. Consumer loan
repayments depend upon the borrower's financial stability and are more likely to
be adversely  affected by divorce,  job loss,  illness and  personal  hardships.
Because many  consumer  loans are secured by  depreciable  assets such as boats,
cars,  and  trailers  the loan should be  amortized  over the useful life of the
asset. The borrower is generally  required to be employed for at least 12 months
prior to obtaining the loan. The loan officer reviews the borrower's past credit
history,  past income level,  debt history and, when  applicable,  cash flow and
determines  the impact of all of these factors on the ability of the borrower to
make future  payments as agreed.  We believe that the principal  competitors for
consumer loans are the  established  banks in the Athens and Oconee County area.
As of  December  31,  2000,  consumer  loans  comprised  5.0% of the Bank's loan
portfolio.



                                       4
<PAGE>

INVESTMENTS

         In addition to loans,  the Bank makes other  investments  primarily  in
obligations of the United States or  obligations  guaranteed as to principal and
interest by the United States and other taxable securities. No investment in any
of those  instruments  will exceed any applicable  limitation  imposed by law or
regulation.  Our Asset and Liability Management Committee reviews the investment
portfolio on an ongoing basis in order to ensure that the investments conform to
the Bank's policy as set by the Board of Directors.

ASSET AND LIABILITY MANAGEMENT

         Our Asset and Liability  Management Committee manages the Bank's assets
and  liabilities  and  strives to provide  an  optimum  and stable net  interest
margin,  a  profitable  after-tax  return on  assets  and  return on equity  and
adequate liquidity. The committee conducts these management functions within the
framework of written loan and investment policies that the Bank has adopted. The
committee attempts to maintain a balanced position between rate sensitive assets
and rate sensitive liabilities.  Specifically,  it charts assets and liabilities
on a matrix by maturity,  effective duration and interest  adjustment period and
attempts to manage any gaps in maturity ranges.

DEPOSIT SERVICES

         The Bank  offers a variety  of deposit  programs  to  individuals,  and
small-to medium-sized business and other organizations. The Bank offers checking
accounts,  money market  accounts,  savings  accounts,  certificates of deposit,
retirement accounts and other deposit services.  The primary sources of deposits
are residents of, and businesses and their employees  located in, the Athens and
Oconee  County  area,  obtained  through  personal  solicitation  by the  Bank's
officers and directors,  direct mail solicitations and advertisements  published
in the local media.

OTHER BANKING SERVICES

         Other bank  services  include cash  management  services,  safe-deposit
boxes,  travelers checks,  direct deposit of payroll and social security checks,
and automatic drafts for various accounts. The Bank has become associated with a
shared network of automated  teller  machines that its customers are able to use
throughout Georgia and other regions. The Bank may offer annuities, mutual funds
and other financial services through a third party that has not yet been chosen.
The Bank also offers  Mastercard(R)  and VISA(R) credit card services  through a
correspondent  bank as an agent for the Bank.  The Bank will not exercise  trust
powers  during  its  early  years of  operation.  It may in the  future  offer a
full-service  trust  department,  but cannot do so without the prior approval of
the OCC.

         The Bank  also  offers  its  targeted  commercial  customers  a courier
service that picks up non-cash  deposits from the  customer's  place of business
and delivers them to the Bank. We believe that this is an important  service for
our customers because the Bank has only one location.

EMPLOYEES

         As of December 31, 2000,  the Bank had ten full-time  employees and one
part-time  employee.  The Company does not have any  employees  who are not also
employees of the Bank.

MARKET AREA

         The Bank's  primary  service  area is the  approximate  ten mile radius
surrounding  its main  office,  which is located  at 2234 West  Broad  Street in
Athens,  Georgia.  The primary  service area  represents a geographic  area that
includes the City of Athens,  Clarke  County,  and the  northeastern  portion of
Oconee County.  Athens is served by several major thoroughfares,  including U.S.
Highways  29 and 129.  Athens is located  approximately  65 miles  northeast  of
Atlanta.


                                       5
<PAGE>

         The estimated  populations  for Clarke and Oconee Counties in 1998 were
92,281 and 24, 274, respectively. According to The University of Georgia's Selig
Center for Economic Growth (the "Selig  Center"),  from 1993 through 1997 Clarke
County's  population grew at an annual growth rate of 0.8% while Oconee County's
population grew at an annual growth rate of 4.7%.  Clarke County's annual growth
rate is projected to increase to 1.4% through 2003, while Oconee County's annual
growth rate is projected at 4.5%. The number of households within the Athens MSA
has increased from 38,583 in 1980 to nearly 51,000 in 1990.

COMPETITION

         The banking  business is highly  competitive.  The Bank  competes  with
other commercial banks, savings and loan associations,  credit unions, and money
market  mutual funds  operating in its primary  service  area.  Clarke County is
served by at least 12 insured  financial  institutions  operating  a total of 40
retail  branches as of June 30, 2000,  the latest date for which  information is
available.  In  Oconee  County,  as of June 30,  2000,  there  were at least six
insured  financial  institutions  operating  a total of ten retail  branches.  A
number  of these  competitors  are well  established  in the  Company's  primary
service area.

         Some of the Bank's competitors have substantially greater resources and
lending limits than the Bank has, and some competitors  provide other services -
such as extensive and established  branch networks and trust services - that the
Bank does not provide.  As a result of these competitive  factors,  the Bank may
have to pay higher  interest  rates to attract  depositors or extend credit with
lower  interest  rates to attract  borrowers,  thus  decreasing its net interest
margin.

SUPERVISION AND REGULATION

         The  following  discussion  describes  the  material  elements  of  the
regulatory  framework  that  applies  to banks and bank  holding  companies  and
provides certain specific information related to the Company and the Bank.

General

         The  Company is a bank  holding  company  registered  with the  Federal
Reserve  under the Bank Holding  Company  Act. As a result,  the Company and any
future non-bank  subsidiaries are subject to the supervision,  examination,  and
reporting  requirements  of the Bank Holding  Company Act and the regulations of
the Federal Reserve.

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

         o        it may acquire direct or indirect  ownership or control of any
                  voting shares of any bank if, after the acquisition,  the bank
                  holding  company will  directly or  indirectly  own or control
                  more than 5.0% of the bank's voting shares;

         o        it or any of its  non-bank  subsidiaries  may  acquire  all or
                  substantially all of the assets of any bank; or

         o        it may  merge or  consolidate  with  any  other  bank  holding
                  company.



                                       6
<PAGE>

         The Bank Holding Company Act further  provides that the Federal Reserve
may not  approve  any  transaction  that  would  result  in or tend to  create a
monopoly or, substantially lessen competition or otherwise function as restraint
of trade,  unless the  anticompetitive  effects of the proposed  transaction are
clearly  outweighed by the public  interest in meeting the convenience and needs
of the community to be served.  The Federal Reserve is also required to consider
the financial and managerial  resources and future prospects of the bank holding
companies and banks  concerned and the convenience and needs of the community to
be served. The Federal Reserve's  consideration of financial resources generally
focuses on capital adequacy, which is discussed below.

         Under the Riegle-Neal  Interstate Banking and Branching Efficiency Act,
the restrictions on interstate  acquisitions of banks by bank holding  companies
were  repealed.  As a result,  the Company,  and any other bank holding  company
located in Georgia is able to acquire a bank located in any other  state,  and a
bank holding company  located  outside of Georgia can acquire any  Georgia-based
bank,  in  either  case  subject  to  specified  deposit  percentage  and  other
restrictions.  The  legislation  provides  that unless an  individual  state has
elected to prohibit out-of-state banks from operating interstate branches within
its territory, adequately capitalized and managed bank holding companies will be
able to  consolidate  their  multistate  banking  operations  into a single bank
subsidiary and to branch interstate through  acquisitions.  De novo branching by
an out-of-state bank is permitted only if it is expressly  permitted by the laws
of the host state.  Georgia does not permit de novo branching by an out-of-state
bank.  Therefore,  the only method by which an out-of-state bank or bank holding
company  may enter  Georgia is through an  acquisition.  Georgia  has adopted an
interstate banking statute that removes the existing restrictions on the ability
of banks to branch interstate through mergers,  consolidations and acquisitions.
However,  Georgia law prohibits a bank holding company from acquiring control of
a  financial  institution  until  the  target  financial  institution  has  been
incorporated  five  years.  As a result,  no bank  holding  company  may acquire
control of the  Company  until  after the fifth  anniversary  date of the Bank's
incorporation.

         The Bank Holding Company Act generally prohibits bank holding companies
from engaging in activities other than banking or managing or controlling  banks
or other  permissible  subsidiaries  and from  acquiring  or  keeping  direct or
indirect  control  of any  company  engaged in any  activities  other than those
activities that the Federal Reserve  determines to be closely related to banking
or  managing  or  controlling  banks.  The   Gramm-Leach-Bliley  Act  has  added
additional  financial related activities that may be conducted by a bank holding
company that qualifies as a financial holding company. See "- Gramm-Leach-Bliley
Act" below.

         In  determining  whether a  particular  activity  is  permissible,  the
Federal  Reserve  must  consider  whether  the  performance  of such an activity
reasonably  can be expected to produce  benefits to the public,  such as greater
convenience,  increased  competition,  or gains  in  efficiency,  that  outweigh
possible adverse effects, such as undue concentration of resources, decreased or
unfair  competition,  conflicts of interest,  or unsound banking practices.  The
Bank Holding Company Act does not place  territorial  limitations on permissible
non-banking  activities of bank holding companies.  Despite prior approval,  the
Federal Reserve may order a holding company or its subsidiaries to terminate any
activity or to terminate its ownership or control of any subsidiary  when it has
reasonable  cause to believe  that the holding  company's  continued  ownership,
activity  or  control  constitutes  a  serious  risk  to the  financial  safety,
soundness, or stability of any of its bank subsidiaries.

         The  Bank's  deposits  are  insured by the FDIC to the  maximum  extent
provided by law. The Bank is subject to numerous state and federal  statutes and
regulations that will affect its business,  activities and operations, and it is
supervised  and  examined  by one or  more  state  or  federal  bank  regulatory
agencies.

         The OCC regularly  examines the Bank's operations and has the authority
to approve or  disapprove  mergers,  the  establishment  of branches and similar
corporate  actions.  The OCC also has the power to prevent  the  continuance  or
development of unsafe or unsound banking practices or other violations of law.

GRAMM-LEACH-BLILEY ACT

         On  November  12,  1999,   President   Clinton   signed  into  law  the
Gramm-Leach-Bliley   Act  which  implemented  major  changes  to  the  statutory
framework  for  providing  banking  and other  financial  services in the United
States. The Gramm-Leach-Bliley  Act, among other things,  eliminated many of the
restrictions on



                                       7
<PAGE>

affiliations  among  banks and  securities  firms,  insurance  firms,  and other
financial  service  providers.  A  bank  holding  company  that  qualifies  as a
financial  holding  company  is  permitted  to  engage  in  activities  that are
financial in nature or incidental or complimentary to a financial activity.  The
activities  that the  Gramm-Leach-Bliley  Act  expressly  lists as  financial in
nature include insurance activities, providing financial and investment advisory
services, underwriting securities and limited merchant banking activities.

         To  become  eligible  for these  expanded  activities,  a bank  holding
company must qualify as a financial  holding company.  To qualify as a financial
holding  company,  each insured  depository  institution  controlled by the bank
holding  company  must be  well-capitalized,  well-managed,  and have at least a
satisfactory rating under the Community  Reinvestment Act. In addition, the bank
holding  company  must  file a  declaration  with  the  Federal  Reserve  of its
intention to become a financial holding company.  Presently, we have no plans to
become a financial holding company.

         Although  considered  to be one of the most  significant  banking  laws
since Depression-era statutes were enacted, because of our small size and recent
organization,  we do not expect the  Gramm-Leach-Bliley Act to materially affect
our initial products,  services or other business activities.  To the extent the
Gramm-Leach-Bliley  Act allows banks,  securities  firms, and insurance firms to
affiliate, the financial services industry may experience further consolidation.
The  Gramm-Leach-Bliley  Act may have the  result of  increasing  the  amount of
competition  we face from  larger  financial  institutions  and other  companies
offering financial products and services,  many of which have substantially more
financial resources.

PAYMENT OF DIVIDENDS

         The Company is a legal entity  separate and distinct from the Bank. The
principal  sources  of the  Company's  cash  flow,  including  cash  flow to pay
dividends  to its  shareholders,  are  dividends  that the Bank pays to its sole
shareholder,  the Company.  Statutory and  regulatory  limitations  apply to the
Bank's  payment of dividends to the Company as well as to the Company's  payment
of dividends to its shareholders.

         If, in the  opinion  of the OCC,  the Bank were  engaged in or about to
engage in an unsafe or unsound practice, the OCC could require, after notice and
a hearing,  the Bank to cease and desist from the practice.  The federal banking
agencies  have  indicated  that  paying  dividends  that  deplete  a  depository
institution's capital base to an inadequate level would be an unsafe and unsound
banking practice.  Under the Federal Deposit Insurance  Corporation  Improvement
Act, a depository institution may not pay any dividend if payment would cause it
to become  undercapitalized or if it already is undercapitalized.  Moreover, the
federal  agencies have issued policy  statements  that provide that bank holding
companies and insured banks should  generally  only pay dividends out of current
operating earnings. See "- Prompt Corrective Action."

         The  payment  of  dividends  by the  Company  and the  Bank may also be
affected by other factors,  such as the requirement to maintain adequate capital
above regulatory guidelines.

CAPITAL ADEQUACY

         The  Company  and the Bank are  required  to  comply  with the  capital
adequacy  standards  established  by the  Federal  Reserve,  in the  case of the
Company,  and the  OCC,  in the  case  of the  Bank.  The  Federal  Reserve  has
established two basic measures of capital adequacy for bank holding companies: a
risk-based  measure and a leverage measure.  A bank holding company must satisfy
all applicable capital standards to be considered in compliance.

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



                                       8
<PAGE>

         The minimum  guideline for the ratio of total capital to  risk-weighted
assets is 8.0%.  At least half of total  capital  must  comprise  common  stock,
minority  interests  in  the  equity  accounts  of  consolidated   subsidiaries,
noncumulative  perpetual  preferred  stock,  and a limited  amount of cumulative
perpetual preferred stock, less goodwill and certain other intangible assets, or
"Tier 1  Capital."  The  remainder  may  consist  of  subordinated  debt,  other
preferred  stock,  and a  limited  amount  of loan  loss  reserves,  or  "Tier 2
Capital."

         In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding  companies.  These guidelines  provide for a minimum
ratio of Tier 1 Capital to average  assets,  less  goodwill  and  certain  other
intangible  assets,  of 3.0%  for  bank  holding  companies  that  meet  certain
specified  criteria,  including having the highest  regulatory rating. All other
bank holding companies generally are required to maintain a leverage ratio of at
least 3.0%,  plus an additional  cushion of 1.0% to 2.0%.  The  guidelines  also
provide that bank holding companies experiencing internal growth, as will be the
case for the Company, or making acquisitions will be expected to maintain strong
capital positions  substantially  above the minimum  supervisory  levels without
significant reliance on intangible assets. Furthermore,  the Federal Reserve has
indicated that it will consider a bank holding company's Tier 1 Capital leverage
ratio, after deducting all intangibles, and other indicators of capital strength
in evaluating proposals for expansion or new activities.

         The Bank is subject to  risk-based  and leverage  capital  requirements
adopted by the OCC,  which are  substantially  similar  to those  adopted by the
Federal Reserve for bank holding companies.

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

SUPPORT OF SUBSIDIARY INSTITUTIONS

         Under  Federal  Reserve  policy,  we are expected to act as a source of
financial  strength  for,  and to commit  resources to support,  the Bank.  This
support may be required at times when,  without this Federal Reserve policy,  we
might not be inclined to provide it. In  addition,  any capital  loans by a bank
holding  company to a bank will be repaid  only after its  deposits  and certain
other  indebtedness are repaid in full. In the event of a bank holding company's
bankruptcy,  any  commitment  by the bank  holding  company  to a  federal  bank
regulatory  agency to  maintain  the  capital  of a banking  subsidiary  will be
assumed by the bankruptcy trustee and entitled to a priority of payment.

PROMPT CORRECTIVE ACTION

         The Federal Deposit Insurance Corporation Improvement Act establishes a
system of prompt corrective  action to resolve the problems of  undercapitalized
institutions. Under this system, the federal banking regulators have established
five   capital   categories   (well   capitalized,    adequately    capitalized,
undercapitalized,      significantly     undercapitalized     and     critically
undercapitalized),  and are  required  to  take  certain  mandatory  supervisory
actions, and are authorized to take other discretionary actions, with respect to
institutions  in the three  undercapitalized  categories.  The  severity  of the
action will depend upon the capital category in which the institution is placed.
Generally,  subject to a narrow exception,  the banking regulator must appoint a
receiver or conservator for an institution that is critically  undercapitalized.
The federal banking  agencies have specified by regulation the relevant  capital
level for each category.

         An institution that is categorized as  undercapitalized,  significantly
undercapitalized,  or  critically  undercapitalized  is  required  to  submit an
acceptable capital restoration plan to its appropriate federal banking agency. A
bank holding  company must  guarantee that a subsidiary  depository  institution
meets  its  capital  restoration  plan,  subject  to  certain  limitations.  The
controlling  holding company's  obligation to fund a capital restoration plan is
limited to the lesser of 5.0% of an undercapitalized  subsidiary's assets or the
amount required to meet regulatory  capital  requirements.  An  undercapitalized
institution  is also  generally  prohibited  from  increasing



                                       9
<PAGE>

its average  total assets,  making  acquisitions,  establishing  any branches or
engaging  in any  new  line  of  business,  except  under  an  accepted  capital
restoration  plan or with FDIC approval.  In addition,  the appropriate  federal
banking agency may test an undercapitalized institution in the same manner as it
treats a significantly  undercapitalized institution if it determines that those
actions are necessary.

FDIC INSURANCE ASSESSMENTS

         The FDIC  has  adopted  a  risk-based  assessment  system  for  insured
depository  institutions  that  takes into  account  the risks  attributable  to
different  categories and  concentrations of assets and liabilities.  The system
assigns an institution to one of three capital categories: (i) well capitalized;
(ii) adequately capitalized; and (iii) undercapitalized.  These three categories
are substantially  similar to the prompt corrective action categories  described
above,  with the  "undercapitalized"  category  including  institutions that are
undercapitalized,     significantly     undercapitalized,     and     critically
undercapitalized for prompt corrective action purposes. The FDIC also assigns an
institution to one of three supervisory subgroups within each capital group. The
supervisory  subgroup  to  which  an  institution  is  assigned  is  based  on a
supervisory evaluation that the institution's primary federal regulator provides
to the FDIC and  information  that the FDIC  determines  to be  relevant  to the
institution's  financial  condition and the risk posed to the deposit  insurance
funds. The FDIC then determines an institution's insurance assessment rate based
on the  institution's  capital  category  and  supervisory  category.  Under the
risk-based  assessment system, there are nine combinations of capital groups and
supervisory   subgroups  to  which  different   assessment  rates  are  applied.
Assessments  range  from 0 to 27 cents per $100 of  deposits,  depending  on the
institution's capital group and supervisory subgroup.

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

COMMUNITY REINVESTMENT ACT

         The Bank is subject to the  provisions  of the  Community  Reinvestment
Act,  which  requires the OCC, in connection  with its regular  examination of a
bank, to assess the Bank's record of meeting the credit needs of the communities
it serves,  including low- and  moderate-income  neighborhoods,  consistent with
safe and sound banking practices.

         Regulations  promulgated  under the CRA are  intended  to set  distinct
assessment  standards for financial  institutions.  The regulations  provide for
streamlined  procedures for institution's with assets of less than $250 million.
The regulations contain the following three evaluation tests:

         o        A lending test, which compares the institution's  market share
                  of loans in low- and moderate-income areas to its market share
                  of loans in its entire service area;

         o        A service test, which evaluates the provision of services that
                  promote the availability of credit to low- and moderate-income
                  areas; and

         o        An investment test, which evaluates the  institution's  record
                  of investments in  organizations  designed to foster community
                  development,   small-  and   minority-owned   businesses   and
                  affordable   housing   lending,   including  state  and  local
                  government housing or revenue bonds.

         Institutions  are required to make public  disclosure  of their written
CRA evaluations made by regulatory  agencies.  This promotes  enforcement of CRA
requirements   by  providing   the  public  with  the  status  of  a  particular
institution's  community  investment record. In addition to public disclosure of
an institution's CRA assessment, regulatory authorities are required to consider
an  institution's  CRA assessment  when an  institution  applies for approval to
establish  a new branch  which will  accept  deposits,  to  relocate an existing
branch or to merge with another federally regulated financial institution.



                                       10
<PAGE>

RESTRICTIONS ON TRANSACTIONS WITH AFFILIATES

         We are subject to the provisions of Section 23A of the Federal  Reserve
Act. Section 23A places limits on the amount of:

         o        A bank's loans or extensions of credit to affiliates;

         o        A bank's investment in affiliates;

         o        Assets a bank may purchase  from  affiliates,  except for real
                  and personal property exempted by the Federal Reserve;

         o        The amount of loans or  extensions  of credit to third parties
                  collateralized by the securities or obligations of affiliates;
                  and

         o        A bank's  guarantee,  acceptance or letter of credit issued on
                  behalf of an affiliate.


         The total amount of the above  transactions is limited in amount, as to
any one  affiliate,  to 10.0% of a bank's  capital  and  surplus  and, as to all
affiliates  combined,  to 20.0% of a bank's capital and surplus.  In addition to
the  limitation  on  the  amount  of  these  transactions,  each  of  the  above
transactions  must also meet specified  collateral  requirements.  The Bank must
also comply with other  provisions  designed to avoid the taking of  low-quality
assets.

         We are also  subject to the  provisions  of Section  23B of the Federal
Reserve Act which, among other things, prohibits an institution from engaging in
the above  transactions  with affiliates  unless the  transactions  are on terms
substantially  the same,  or at least as  favorable  to the  institution  or its
subsidiaries,  as those prevailing at the time for comparable  transactions with
nonaffiliated companies.

         The Bank is also subject to restrictions on extensions of credit to its
executive  officers,   directors,   principal  shareholders  and  their  related
interests. These extensions of credit (i) must be made on substantially the same
terms, including interest rates and collateral,  as those prevailing at the time
for comparable  transactions with third parties,  and (ii) must not involve more
than the normal risk of repayment or present other unfavorable features.

MONETARY POLICY

      The earnings of the Bank,  as well the  Company,  are affected by domestic
and foreign conditions,  particularly by the monetary and fiscal policies of the
United States government and its agencies. The Federal Reserve has had, and will
continue to have,  an important  impact on the  operating  results of commercial
banks through its power to implement  national  monetary policy in order,  among
other things, to mitigate recessionary and inflationary  pressures by regulating
the national money supply.  The techniques  used by the Federal  Reserve include
setting the reserve  requirements of member banks and  establishing the discount
rate on member bank  borrowings.  The Federal  Reserve also conducts open market
transactions in United States government securities.


ITEM 2.  PROPERTIES

         The  Company's  executive  office  is  located  at  the  Bank's  office
facilities,  2234 West Broad Street,  Athens,  Georgia. The facility consists of
approximately  3,000 square feet and includes one vault,  three offices,  a loan
operations area, five teller stations,  three drive-in windows and one automated
teller machine.  The Bank owns in fee simple with no major encumbrances the real
property on which its office facilities are located.

         The Bank leases additional  office space for operational  activities at
Executive Office Park, 2500 West Broad Street, Suite 207, Athens, Georgia 30606.
The lease for the office space was entered into on April 1, 2000, for a one-year
term to end March 31, 2001. The office space consists of 906 square feet and was
leased at an annual rate of $13.50 per square  foot.  The Bank  expects to renew
this lease for an  additional  one-year term to begin April 1, 2001 at a rate of
$14.00 per square foot.


                                       11
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

         As of the date of this Report, there were no material legal proceedings
to which we, or any of our properties, were subject.


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

         Not applicable.


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         A.       MARKET INFORMATION

         (i)      Market for Common  Equity.  There is  no  established  trading
market for the Company's  common stock,  and an active public  trading market is
not expected to develop in the near future.


                                       12
<PAGE>

         (ii)     Holders of Common Stock.

         As of March 9, 2001,  there were 196 record holders of the common stock
of the Company.

         (iii)    Dividends.

         To date,  the Company has not paid any  dividends on its common  stock.
The Company initially has no source of income other than dividends that the Bank
pays to it. The  Company's  ability to pay  dividends to its  shareholders  will
therefore  depend on the Bank's ability to pay dividends to the Company.  In the
future, the Company may begin income-producing operations independent from those
of the Bank,  which may provide  another source of income from which the Company
could pay dividends to you. However, we can give you no assurance as to when, if
at all, these operations may begin or whether they will be profitable.

         Bank  holding   companies  and  national  banks  are  both  subject  to
significant regulatory  restrictions on the payment of cash dividends.  In light
of these  restrictions  and the need for the  Company and the Bank to retain and
build  capital,  the Boards of  Directors  of the  Company  and the Bank plan to
reinvest  earnings  for the  period  of time  necessary  to  support  successful
operations.  As a result,  the Company does not plan to pay  dividends  until it
recovers any losses  incurred and becomes  profitable,  and its future  dividend
policy will depend on the earnings, capital requirements and financial condition
of the Company and the Bank and on other  factors  that the  Company's  Board of
Directors considers relevant.

         Additionally, regulatory authorities may determine, under circumstances
relating to the financial condition of the Company or the Bank, that the payment
of dividends  would be an unsafe or unsound  practice and may prohibit  dividend
payment. See "Supervision and Regulation - Payment of Dividends."

         B.       USE OF PROCEEDS FROM SALES OF REGISTERED SECURITIES

         On December 6, 1999, the Company  commenced an initial public  offering
of a minimum  of 610,000  shares  and a maximum of 800,000  shares of its common
stock at an offering price of $10.00 per share.  The shares in the offering were
registered  under  the  Securities  Act of  1933,  as  amended,  pursuant  to an
effective  Registration  Statement on Form SB-2 (the  "Registration  Statement,"
registration  number  333-87763).   The  Registration   Statement  was  declared
effective by the Securities and Exchange  Commission  (the "SEC") on December 6,
1999.

         On March 5, 2000, the Company's  board of directors voted to extend the
offering  for a 90-day  period  ending June 3, 2000,  and on May 15,  2000,  the
Company's  board of  directors  voted  again to extend  the stock  offering  for
another 90-day period ending  September 1, 2000. As of May 15, 2000, the minimum
share purchase was reduced to 200 shares of the Company's stock. Prior to May 2,
2000, all  subscription  funds  tendered were  deposited in an  interest-bearing
escrow account with Georgia First Bank, N.A., Gainesville,  Georgia (the "Escrow
Agent") pending completion of certain conditions of the offering.

         As of May 2,  2000,  the  minimum  number  of  shares to be sold in the
offering  had been  attained.  Accordingly,  on May 2, 2000,  the  Escrow  Agent
released the subscription funds to the Bank. Since May 2, 2000, all subscription
funds tendered have been deposited  directly with the Company and have been made
immediately  available  for use by the  Company.  The  stock  offering  ended on
September  1,  2000.  At the  close of the  offering,  the  Company  had  raised
$7,412,600 by selling 741,260 shares from the offering.

         The Company used  $6,878,600 of the net proceeds of the offering on May
2, 2000 to  capitalize  the Bank.  In return,  the Bank issued all of its common
stock to the Company,  and the Company became the Bank's sole  shareholder.  The
Company  subsequently  injected an additional  $434,000 of  additional  offering
proceeds  into the Bank.  The Company is using the remaining net proceeds of the
offering for working capital purposes.


                                       13
<PAGE>


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         The  following  is a  discussion  of our  financial  condition  and the
financial  condition of our subsidiary,  the Bank, at December 31, 2000 and 1999
and the results of operations  for the year ended  December 31, 2000 and for the
period from June 1, 1999,  date of inception,  to December 31, 1999. The purpose
of this discussion is to focus on information about our financial  condition and
our  results of  operations  that are not  otherwise  apparent  from our audited
consolidated financial statements.  Reference should be made to those statements
and the  selected  financial  data  presented  elsewhere  in this  report for an
understanding of the following discussion and analysis.

OVERVIEW

         Our 2000 results were  highlighted by the successful  completion of our
common stock offering and the commencement of banking operations on May 8, 2000.
We believe the Company's capital base will allow for substantial growth in 2001.

Financial Condition at December 31, 2000 and 1999

         The  following  is a summary  of our  balance  sheets  for the  periods
indicated:
                                            December 31,

                                         1999         2000
                                         ----         ----

                                      (Dollars in Thousands)

Cash and due from banks               $ 3,232        $     4
Restricted cash                          --              680
Federal funds sold                      5,020           --
Securities available for sale             207           --
Loans, net                             17,484           --
Premises and equipment                  1,558             11
Other assets                              165              5
                                      -------        -------

                                      $27,666        $   700
                                      =======        =======

Total deposits                        $20,857        $  --
Line of credit                           --               49
Subscribers' deposits                    --              680
Other liabilities                          52            189
Stockholders' equity (deficit)          6,757           (218)
                                      -------        -------

                                      $27,666        $   700
                                      =======        =======


                                       14
<PAGE>


FINANCIAL CONDITION AT DECEMBER 31, 2000 AND 1999

          As of December 31,  2000,  we had total  assets of $27.7  million.  We
raised  $7.4  million  from the sale of  common  stock and have  received  $20.9
million in deposits since the commencement of banking operations on May 8, 2000.
We have invested the proceeds from the stock sale and deposit  growth in Federal
funds sold ($5.0 million), equity securities ($207,000),  loans ($17.7 million),
and premises and  equipment  ($1.6  million).  We have also repaid debt incurred
during the  organizational  period of $250,000.  We expect that loan and deposit
growth will be significant  during the coming year, which is not uncommon for de
novo banks.  We were in the initial  stages of our common  stock  offering as of
December 31, 1999.

          Our investment  portfolio,  consisting solely of equity investments in
the Federal  Reserve  Bank and Federal  Home Loan Bank,  amounted to $207,000 at
December 31, 2000.

          We have approximately 83% of our loan portfolio collateralized by real
estate  located  in our  primary  market  area of  Clarke  County,  Georgia  and
surrounding  counties.  Our real estate  mortgages  and  construction  portfolio
consists of loans collateralized by one- to four-family  residential  properties
(47%),  construction loans to build one- to four-family  residential  properties
(11%),  and  nonresidential  properties  consisting  primarily of small business
commercial  properties (42%). We generally require that loans  collateralized by
real estate not exceed the collateral  values by the following  percentages  for
each type of real estate loan as follows.

              One- to four-family residential properties                85%
              Construction loans on one- to four-family
                 residential properties                                 80%
              Nonresidential property                                   80%

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

         The  specific  economic  and  credit  risks  associated  with  our loan
portfolio,  especially the real estate portfolio,  include,  but are not limited
to, a general downturn in the economy which could affect  unemployment  rates in
our market  area,  general  real  estate  market  deterioration,  interest  rate
fluctuations, deteriorated or non-existing collateral, title defects, inaccurate
appraisals,  financial  deterioration of borrowers,  fraud, and any violation of
banking  protection laws.  Construction  lending can also present other specific
risks to the lender such as whether developers can find builders to buy lots for
home   construction,   whether  the  builders  can  obtain   financing  for  the
construction, whether the builders can sell the home to a buyer, and whether the
buyer  can  obtain  permanent  financing.  Currently,  real  estate  values  and
employment  trends  in our  market  area are  stable  with no  indications  of a
significant downturn in the general economy.

         We  attempt  to reduce  these  economic  and  credit  risks not only by
adhering  to  loan  to  value   guidelines,   but  also  by  investigating   the
creditworthiness  of  the  borrower  and  monitoring  the  borrower's  financial
position.  Also, we establish and  periodically  review our lending policies and
procedures. Banking regulations limit exposure by restricting loan relationships
that exceed 15% of the Bank's unimpaired capital and surplus,  as defined by the
OCC.

LIQUIDITY AND CAPITAL RESOURCES

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

                                       15
<PAGE>

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

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

         At December  31,  2000,  we had loan  commitments  outstanding  of $3.8
million.  Because these  commitments  generally have fixed  expiration dates and
many will expire without being drawn upon, the total  commitment  amounts do not
necessarily  represent future cash requirements.  If needed, we have the ability
on a short-term  basis to borrow and purchase Federal funds from other financial
institutions. At December 31, 2000, we had arrangements with one commercial bank
for short-term advances of $1,500,000.

         At December 31, 2000, our capital ratios were considered adequate based
on regulatory minimum capital  requirements.  Our shareholders' equity increased
during 2000 due to the proceeds  from the sale of common stock of  approximately
$7.4  million  offset  by  stock  offering  costs of  $80,000  and a net loss of
$358,000.

         In the future,  the primary source of funds available to us will be the
payment of dividends by the Bank.  Banking  regulations  limit the amount of the
dividends  that  may be  paid  without  prior  approval  of the  Bank's  primary
regulatory agency, the OCC.  Currently,  no dividends can be paid by the Bank to
the Company without regulatory approval.

         The minimum  capital  requirements  to be considered  well  capitalized
under prompt  corrective action provisions and the actual capital ratios for the
Company and the Bank as of December 31, 2000 are as follows:

<TABLE>
<CAPTION>
                                                            Actual
                                             --------------------------------------
                                                   NBG              The National          Regulatory
                                              Bancorp, Inc.       Bank of Georgia        Requirements
                                             -----------------    -----------------    -----------------
<S>                                                <C>                  <C>                   <C>
         Leverage capital ratios                   28.38%               28.28%                5.00%
         Risk-based capital ratios
              Core capital                         38.48                38.35                 6.00
              Total capital                        39.73                39.60                10.00
</TABLE>


         These ratios will decline as asset growth  continues,  but are expected
to exceed the regulatory minimum requirements.

         At  December  31,  2000,  we had no  material  commitments  for capital
expenditures.

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

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


                                       16
<PAGE>

EFFECTS OF INFLATION

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


Results of Operations  For The Year Ended December 31, 2000 and Period from
June 1, 1999, Date of Inception, to December 31, 1999
--------------------------------------------------------------------------------

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

                                             Year Ended          Period Ended
                                          December 31, 2000    December 31, 1999
                                          -----------------    -----------------
                                                    (Dollars in Thousands)

Interest income                             $ 1,089                $  --

Interest expense                                352                      1
                                            -------                -------

Net interest income (expense)                   737                     (1)

Provision for loan losses                       218                   --

Other income                                    120                   --

Other expenses                                  997                    217
                                            -------                -------

Pretax loss                                    (358)                  (218)

Income taxes                                   --                     --
                                            -------                -------

Net loss                                    $  (358)               $  (218)
                                            =======                =======

         We  commenced  our  banking  operations  on May 8,  2000.  Prior to the
commencement,  we were  engaged in  activities  involving  the  formation of the
Company, selling the common stock, and obtaining necessary regulatory approvals.
We incurred operating losses totaling $429,000 during the organizational  period
($218,000 in 1999 and $211,000 in 2000).  We incurred total  organizational  and
stock issue costs of $509,000, of which $80,000 has been recorded as a reduction
in capital  surplus and  $429,000 was  expensed as incurred in  accordance  with
generally accepted accounting  principles.  Through the end of the year 2000, we
had incurred additional operating losses of $147,000.

         Operations during 1999 consisted  primarily of our organizers  engaging
in  organizational  and  preopening  activities  necessary to obtain  regulatory
approvals  and to prepare to  commence  business as a bank.  The  organizational
expenses  incurred  through  December  31,  1999  consisted   primarily  of  the
following:

                  Salaries and wages                              $   174,000
                  Filing and application fees                           9,000
                  Equipment and occupancy expenses                     23,000

         Salaries and wages include the accrual of payments due under employment
contracts  with the Bank's  senior  officers  for services  rendered  during the
organizational  phase of the Company.  The  accruals  amounted to $158,000 as of
December 31, 1999. The  organizational  expenses  through December 31, 1999 were
funded with a


                                       17
<PAGE>

$250,000 line of credit at a commercial  bank. As of December 31, 1999, the line
of credit had a balance of $49,000.  The line of credit accrued  interest at the
lender's  prime rate less 1.00%,  or 7.50% at December  31,  1999.  Interest was
payable at maturity and the line of credit matured on May 23, 2000.

Net Interest Income
-------------------

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

         The net yield on average interest-earning assets during the operational
period from May 8, 2000 to December 31, 2000 was 6.15%.  Average loans were $7.3
million,  average securities were $134,000,  and average Federal funds sold were
$3.2 million. Average  interest-bearing  liabilities were $6.2 million. The rate
earned on average  interest-earning  assets was 9.44%.  The rate paid on average
interest-bearing liabilities was 5.62%.

Provision for Loan Losses
-------------------------

         The provision for loan losses was $218,000 in 2000. The amount provided
was due primarily to the growth of the  portfolio.  Based upon our evaluation of
the loan  portfolio,  we believe  the  allowance  for loan losses is adequate to
absorb  possible  losses on existing  loans that may become  uncollectible.  Our
evaluation  considers  past  due and  classified  loans,  underlying  collateral
values,  and current economic  conditions that may affect the borrower's ability
to repay. As of December 31, 2000, we had no nonperforming  loans or assets. The
allowance for loan losses as a percentage of total loans was 1.23%.

Other Income
------------

         Other operating income consists of service charges on deposit accounts,
mortgage  origination  fees, and other  miscellaneous  revenues and fees.  Other
operating income was $120,000 in 2000.

Non-interest Expense
--------------------

         Other  operating  expense for the year ended December 31, 2000 consists
of salaries and employee benefits  ($602,000),  equipment and occupancy expenses
($158,000), and other operating expenses ($237,000).

Income Tax
----------

         We had no  income  tax  expense  due to a  pre-tax  operating  loss  of
$358,000.   At  December  31,  2000,  we  have   available  net  operating  loss
carryforwards  of  approximately  $316,000 for Federal  income tax purposes.  If
unused, the carryforwards will expire beginning 2020.

Asset/Liability Management
--------------------------

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

         Our  asset/liability  mix is monitored on a regular basis with a report
reflecting  the  interest  rate-sensitive  assets  and  interest  rate-sensitive
liabilities being prepared and presented to the Board of Directors on a periodic
basis. The objective of this policy is to monitor interest rate-sensitive assets
and  liabilities  so as to  minimize  the  impact of  substantial  movements  in
interest  rates on earnings.  An asset or liability is considered to be interest
rate-


                                       18
<PAGE>

sensitive if it will reprice or mature within the time period analyzed,  usually
one year or less. The interest  rate-sensitivity  gap is the difference  between
the interest-earning assets and interest-bearing liabilities scheduled to mature
or reprice within such time period. A gap is considered positive when the amount
of interest  rate-sensitive assets exceeds the amount of interest rate-sensitive
liabilities.   A  gap  is  considered  negative  when  the  amount  of  interest
rate-sensitive  liabilities exceeds the interest rate-sensitive assets. During a
period of rising  interest  rates,  a  negative  gap  would  tend to affect  net
interest  income  adversely,  while a  positive  gap would  tend to result in an
increase in net interest income. Conversely, during a period of falling interest
rates,  a  negative  gap would  tend to result in an  increase  in net  interest
income, while a positive gap would tend to affect net interest income adversely.
If our assets and liabilities were equally flexible and moved concurrently,  the
impact of any  increase or decrease in  interest  rates on net  interest  income
would be minimal.

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

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

         At December 31, 2000, our cumulative one year interest rate-sensitivity
gap ratio was 104%. Our targeted ratio is 80% to 120% in this time horizon. This
indicates that our interest-earning  assets will reprice during this period at a
rate faster than our interest-bearing liabilities.

         The following table sets forth the distribution of the repricing of our
interest-earning  assets and  interest-bearing  liabilities  as of December  31,
2000,   the   interest    rate-sensitivity    gap,   the   cumulative   interest
rate-sensitivity gap, the interest rate-sensitivity gap ratio and the cumulative
interest  rate-sensitivity gap ratio. The table also sets forth the time periods
in which interest-earning assets and interest-bearing liabilities will mature or
may reprice in accordance with their contractual terms.  However, the table does
not  necessarily  indicate the impact of general  interest rate movements on the
net  interest  margin as the  repricing  of  various  categories  of assets  and
liabilities is subject to competitive  pressures and the needs of our customers.
In addition,  various assets and liabilities  indicated as repricing  within the
same period may in fact,  reprice at  different  times within this period and at
different rates.


                                       19
<PAGE>

<TABLE>
<CAPTION>
                                                 After Three         After One
                                 Within           Months but          Year but             After
                                 Three            Within One        Within Five             Five
                                 Months              Year              Years               Years              Total
                             ---------------    ---------------    ---------------     ---------------    ---------------
                                                               (Dollars in Thousands)
<S>                          <C>                <C>                <C>                 <C>                <C>
Interest-earning assets:
   Federal funds sold        $     5,020        $        --        $        --         $        --        $     5,020
   Securities                        207                 --                 --                  --                207
   Loans                           4,789              4,393              7,850                 670             17,702
                             -----------        -----------        -----------         -----------        -----------

                                  10,016              4,393              7,850                 670             22,929
                             -----------        -----------        -----------         -----------        -----------

Interest-bearing
liabilities:
   Interest-bearing demand
      deposits                     5,245                 --                 --                  --              5,245
   Savings                         2,827                 --                 --                  --              2,827
   Certificates, less than
      $100,000                        12              3,784              2,217                  --              6,013
   Certificates, $100,000
      and over                        --              1,973                937                  --              2,910
                             -----------        -----------        -----------         -----------        -----------

                                   8,048              5,757              3,154                  --             16,995
                             -----------        -----------        -----------         -----------        -----------

Interest rate sensitivity
   gap                       $     1,932        $    (1,364)       $     4,696         $       670        $     5,934
                             ===========        ===========        ===========         ===========        ===========
Cumulative interest rate
   sensitivity gap           $     1,932        $       568        $     5,264         $     5,934
                             ===========        ===========        ===========         ===========
Interest rate sensitivity
   gap ratio                        1.24               0.76               2.49                  --
                             ===========        ===========        ===========         ===========

Cumulative interest rate
   sensitivity gap ratio            1.24               1.04              1.31                  .35
                             ===========        ===========        ==========          ===========
</TABLE>



               SELECTED FINANCIAL INFORMATION AND STATISTICAL DATA

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




                                       20
<PAGE>


                    DISTRIBUTION OF ASSETS, LIABILITIES, AND
                              SHAREHOLDERS' EQUITY:
                    INTEREST RATES AND INTEREST DIFFERENTIALS

AVERAGE BALANCES

         The  condensed  average  balance  sheet  for the  period  indicated  is
presented below. (1)

<TABLE>
<CAPTION>
                                                             From May 8, 2000,
                                                     Date of Commencement of Operations,
                                                            to December 31, 2000
                                                            --------------------
                                                           (Dollars in Thousands)
               ASSETS

<S>                                                             <C>
 Cash and due from banks                                        $       576
 Taxable securities                                                     134
 Federal funds sold                                                   3,159
 Loans (2)                                                            7,277
 Allowance for loan losses                                              (82)
 Other assets                                                         1,062
                                                                    -------
                                                                $    12,126

 Total interest-earning assets                                  $    10,570
                                                                     ======

      LIABILITIES AND STOCKHOLDERS' EQUITY

 Deposits:
      Noninterest-bearing demand                                $     1,533
      Interest-bearing demand                                         3,376
      Savings                                                         1,482
      Time                                                            1,332
                                                                    -------
               Total deposits                                   $     7,723

      Other liabilities                                                  29
                                                                    -------
               Total liabilities                                      7,752
      Stockholders' equity                                            4,374
                                                                    -------
                                                                $    12,126

      Total interest-bearing liabilities                        $     6,190
                                                                    =======

----------
(1)       Average  balances were  determined  using the daily  average  balances
          during  the  period  from  May  8,  2000,   date  of  commencement  of
          operations, to December 31, 2000, for each category.

(2)       There were no nonaccrual loans included in average loans.
</TABLE>



                                       21
<PAGE>


INTEREST INCOME AND INTEREST EXPENSE

         The  following  tables set forth the amount of our interest  income and
interest   expense   for  each   category   of   interest-earning   assets   and
interest-bearing   liabilities   and  the  average   interest   rate  for  total
interest-earning  assets and total  interest-bearing  liabilities,  net interest
spread  and net yield on average  interest-earning  assets.  These  rates do not
include the time period prior to the commencement of our banking operations.

<TABLE>
<CAPTION>
                                                                                  Year Ended December 31, 2000
                                                                                                          Average
                                                                              Interest                     Rate
                                                                              --------                     ----
                                                                                    (Dollars in Thousands)
     <S>                                                                     <C>                          <C>
     INTEREST INCOME:
          Interest and fees on loans (1)                                     $       775                  10.65%
          Interest on taxable securities                                               8                   5.97
          Interest on Federal funds sold                                             215                   6.81
          Interest earned during the period prior to
            commencement of banking operations                                        91                      -
                                                                                 -------
          Total interest income                                              $     1,089                   9.44
                                                                                 -------

     INTEREST EXPENSE:
          Interest on interest-bearing
            demand deposits                                                  $       173                   5.12
          Interest on savings deposits                                                83                   5.60
          Interest on time deposits                                                   92                   6.91
          Interest incurred during the period prior to
            commencement of banking operations                                         4                      -
                                                                                --------
          Total interest expense                                                     352                   5.62
                                                                                --------

     NET INTEREST INCOME  $                                                  $       737
                                                                                ========

          Net interest spread                                                                              3.82%
                                                                                                         ======
          Net yield on average interest-earning assets                                                     6.15%
                                                                                                         ======
</TABLE>

(1)       Interest and fees on loans includes $93,000 of loan fee income for the
          year ended December 31, 2000. There was no interest income  recognized
          on nonaccrual loans during 2000.


RATE AND VOLUME ANALYSIS

         Because we commenced our banking  operations in 2000, the change in net
interest income from banking operations is all due to volume.  Therefore, a rate
and volume analysis table is not presented.



                                       22
<PAGE>


                              INVESTMENT PORTFOLIO

Types of Investments

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

<TABLE>

                                                                                     December 31, 2000
                                                                                     -----------------
                                                                                  (Dollars in Thousands)
                   <C>                                                                    <S>
                   Equity securities:
                          Federal Reserve Bank                                            $     206
                          Federal Home Loan Bank                                                  1
                                                                                              -----
                                                                                                207
</TABLE>

MATURITIES

         Equity securities have no contractual maturity.


                                 LOAN PORTFOLIO

TYPES OF LOANS

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

<TABLE>
<CAPTION>

                                                                                  December 31, 2000
                                                                                  -----------------
                                                                               (Dollars in Thousands)
     <C>                                                                            <S>
     Commercial                                                                     $      2,175
     Real estate-construction                                                              1,568
     Real estate-mortgage                                                                 13,073
     Consumer installment loans and other                                                    886
                                                                                        --------
                                                                                          17,702
     Less allowance for loan losses                                                         (218)
                                                                                        --------
                   Net loans                                                        $     17,484
                                                                                        ========
</TABLE>



                                       23
<PAGE>


MATURITIES AND SENSITIVITIES OF LOANS TO CHANGES IN INTEREST RATES

         Total loans as of December  31, 2000 are shown in the  following  table
according to contractual  maturity  classifications  one year or less, after one
year through five years, and after five years.

                                                          (Dollars in Thousands)
     Commercial
          One year or less                                        $ 1,267
          After one year through five years                           518
          After five years                                            390
                                                                  -------
                                                                    2,175
     Construction
          One year or less                                          1,568
          After one year through five years                          --
          After five years                                           --
                                                                  -------
                                                                    1,568
     Other
          One year or less                                          3,227
          After one year through five years                        10,062
          After five years                                            670
                                                                  -------
                                                                   13,959

                                                                  $17,702

The  following  table  summarizes  loans at December 31, 2000 with the due dates
after one year that have  predetermined  and  floating  or  adjustable  interest
rates.

                                                          (Dollars in Thousands)

          Predetermined interest rates                        $     8,520
          Floating or adjustable interest rates                     3,120
                                                                  -------
                                                              $    11,640


                                       24
<PAGE>

RISK ELEMENTS

         Information  with respect to  nonaccrual,  past due,  and  restructured
loans at December 31, 2000 is as follows:

<TABLE>
<CAPTION>
                                                                                  December 31, 2000
                                                                               (Dollars in Thousands)

     <S>                                                                            <C>
     Nonaccrual loans                                                               $        0
     Loans contractually past due ninety days or more
          as to interest or principal payments and still accruing                            0
     Restructured loans                                                                      0
     Loans, now current about which there are serious
          doubts as to the ability of the borrower to comply
          with loan repayment terms                                                          0
     Interest income that would have been recorded on
          nonaccrual and restructured loans under original terms                             0
     Interest income that was recorded on nonaccrual and
          restructured loans                                                                 0
</TABLE>


         It is our policy to discontinue the accrual of interest income when, in
the  opinion  of  management,  collection  of  interest  becomes  doubtful.  The
collection   of  interest   becomes   doubtful   when  there  is  a  significant
deterioration  in the financial  condition of the borrower and full repayment of
principal  and interest is not  expected,  or the  principal or interest is more
than 90 days past due, unless the loan is both  well-secured  and in the process
of collection.

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


                                       25
<PAGE>

                         SUMMARY OF LOAN LOSS EXPERIENCE

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

                                                                   2000
                                                                   ----
                                                          (Dollars in Thousands)

     Average amount of loans outstanding
          (since May 8, 2000)                                    $7,277
                                                                 ======

     Balance of allowance for loan losses
          at beginning of period                                 $ --
                                                                 ------

     Loans charged off                                             --
                                                                 ------

     Loans recovered                                               --
                                                                 ------

     Net charge-offs                                               --
                                                                 ------

     Additions to allowance charged to operating
          expense during period                                     218
                                                                 ------

     Balance of allowance for loan losses
          at end of period                                       $  218
                                                                 ======

     Ratio of net loans charged off during the
     period to average loans outstanding                              -%
                                                                 ======

ALLOWANCE FOR LOAN LOSSES

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

         As of December 31, 2000,  we had made no  allocations  of our allowance
for loan losses to specific categories of loans. Based on our best estimate, the
allocation  of the  allowance  for loan  losses  to types  of  loans,  as of the
indicated dates, is as follows:

<TABLE>
<CAPTION>
                                                                            December 31, 2000
                                                                                            Percent of loans in
                                                                                               each category
                                                                    Amount                    to total loans
                                                                    ------                    --------------
                                                            (Dollars in Thousands)
<S>                                                             <C>                                   <C>
Commercial                                                      $        65                           12.29%
Real estate - construction                                               87                            8.86
Real estate - mortgage                                                   44                           73.85
Consumer installment and other                                           22                            5.00
                                                                       ----                          ------
                                                                $       218                          100.00%
                                                                        ===                          ======
</TABLE>


                                       26
<PAGE>

                                    DEPOSITS

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

<TABLE>
<CAPTION>
                                                                            2000
                                                               ----------------------------
                                                               Amount                Percent
                                                               ------                -------
                                                                      (Dollars in Thousands)
<S>                                                       <C>
     Noninterest-bearing demand deposits                  $     1,533                   --%
     Interest-bearing demand deposits                           3,376                 5.12
     Savings deposits                                           1,482                 5.60
     Time deposits                                              1,332                 6.91
                                                                -----
              Total deposits                              $     7,723
                                                                =====
----------
(1)       Average  balances were  determined  using the daily  average  balances
          during the year for the period from May 8, 2000,  date of commencement
          of operations, to December 31, 2000.
</TABLE>

         The  amounts  of time  certificates  of  deposit  issued in  amounts of
$100,000 or more as of December 31, 2000 are shown below by  category,  which is
based on time remaining  until  maturity of (i) three months or less,  (ii) over
three through six months,  (iii) over six through twelve  months,  and (iv) over
twelve months.
                                                          (Dollars in Thousands)

     Three months or less                                       $          -
     Over three months through six months                                102
     Over six months through twelve months                             1,871
     Over twelve months                                                  937
                                                                      ------
              Total                                             $      2,910
                                                                       =====


                    RETURN ON ASSETS AND STOCKHOLDERS' EQUITY

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

                                                                      2000
                                                                      ----

     Return on assets (1)                                           (2.95)%
     Return on equity (2)                                           (8.18)
     Dividend payout ratio (3)                                       -
     Equity to assets ratio (4)                                     36.07

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


ITEM 7.  FINANCIAL STATEMENTS

         The consolidated  financial statements of the Company,  including notes
thereto, and the report of independent certified public accountants are included
in this Report beginning at page F-1 and are incorporated herein by reference.



                                       27
<PAGE>

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

         There has been no occurrence requiring a response to this Item.


                                    PART III


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

         Each  person  listed  below has been a director  of the  Company  since
September 23, 1999.  Directors of the Company serve staggered terms, which means
that  one-third of the directors  are elected each year at the Company's  annual
meeting of  shareholders.  The initial term of the Class I directors  expired in
2000.  Each Class I director was elected to serve an additional  three year term
that will expire in 2003. The initial term of the Class II directors  expires in
2001,  and  the  initial  term of the  Class  III  directors  expires  in  2002.
Thereafter,  each director  will serve for a term of three years.  The Company's
officers are  appointed by the Board of Directors and hold office at the will of
the Board of Directors.

         Each person  listed  below is also a director of the Bank.  Each of the
Bank's directors serve for a term of one year and will be elected by the Company
each year at the Bank's annual meeting of shareholders.  The Bank's officers are
appointed  by its Board of  Directors  and will  hold  office at the will of the
Board of Directors.

CLASS I DIRECTORS (TERMS EXPIRING IN 2003)

         John H. Barrett,  age 46, has served as a director of the Company since
1999 and as a  director  of the Bank  since its  organization  in May 2000.  Mr.
Barrett has been in the construction  and development  business in the Southeast
and in the  Athens  area  since  1974.  Mr.  Barrett  is the  founder of Barrett
Properties,  Inc., a property  management company that manages his family's real
estate interests, including approximately 1,500 rental units in the Southeast, a
large number of which are located in Athens.

         Jack L.  Barton,  age 46 has served as a director of the Company  since
1999 and as a  director  of the Bank  since its  organization  in May 2000.  Mr.
Barton  is the  majority  owner of  Lintel,  Inc.,  a holding  company  for Hart
Telephone  Company of  Hartwell,  Georgia.  He has been  employed by the company
since 1976 and currently serves as its Chief Executive Officer.

         Robert E. Burton, age 52, has served as a director of the Company since
1999 and as a  director  of the Bank  since its  organization  in May 2000.  Mr.
Burton is the  co-founder  of Flowers,  Inc., a wholesaler  of balloons and gift
items, and has been the company's Chief Executive Officer since 1971. Mr. Burton
is also active in several real estate investment partnerships.

         Michael R.  Carson,  age 40, has  served as a director  of the  Company
since 1999 and as a director of the Bank since its organization in May 2000. Mr.
Carson also serves as the Executive Vice President-Operations of the Company and
the Bank.  Prior to joining the Bank, Mr. Carson served as Senior Vice President
and Chief  Financial  Officer of The Georgia  National  Bank, a position he held
from  1989 to  1999.  Mr.  Carson  has  also  served  as an  instructor  in bank
operations for the Community  Bankers  Association of Georgia for the last seven
years.


CLASS II DIRECTORS (TERMS EXPIRING IN 2001)

         Michael S.  Gautreaux,  age 51, has served as a director of the Company
since 1999 and as a director of the Bank since its organization in May 2000. Mr.
Gautreaux has been the co-owner of Athens Insurers,  an insurance agency selling
a wide range of insurance products to large and small businesses and individuals
since 1974.


                                       28
<PAGE>

         Ronald L. Hill,  age 48, has served as a director of the Company  since
1999 and as a director of the Bank since its  organization in May 2000. Mr. Hill
has owned and operated two automobile dealerships in Athens,  University Motors,
Inc., a Ford and Mazda dealership,  and University Automotive,  Inc., a Lincoln,
Mercury and Jeep dealership since 1994.


         William S.  Huggins,  age 53, has served as a director  of the  Company
since 1999 and as a director of the Bank since its organization in May 2000. Mr.
Huggins also serves as President and Chief Executive  Officer of the Company and
the Bank.  Prior to joining the Bank,  Mr. Huggins served as President and Chief
Executive Officer and a director of The Georgia National Bank from 1993 to 1999.

         Henry D. Joiner,  age 49, has served as a director of the Company since
1999 and as a  director  of the Bank  since its  organization  in May 2000.  Mr.
Joiner is a real estate broker with Joiner and Associates, an Athens real estate
company  he has  owned  since  1996.  Prior  to 1996,  Mr.  Joiner  owned  ReMax
Associates, an Athens real estate company, and Athena Management Company, a real
estate management company based in Athens.


CLASS III DIRECTORS (TERMS EXPIRING IN 2002)

         Thomas Z. Lanier,  III, age 48, has served as a director of the Company
since 1999 and as a director of the Bank since its organization in May 2000. Mr.
Lanier also serves as the Executive Vice President - Lending of the Bank.  Prior
to joining the Bank,  Mr. Lanier served as the Executive Vice President and as a
director of The Georgia National Bank, a position he held from 1993 to 1999.

         Ted R.  Ridlehuber,  age 61, has served as a  director  of the  Company
since 1999 and as a director of the Bank since its organization in May 2000. Mr.
Ridlehuber  is the owner of Cannon  Financial  Institute,  a financial  services
training and consulting  company  headquartered  in Athens that serves  regional
banking companies  throughout the country, and has served as its Chief Executive
Officer since 1993.

         Thomas W. Scott,  age 37, has served as a director of the Company since
1999 and as a director of the Bank since its organization in May 2000. Mr. Scott
is a  certified  public  accountant  who has  served a variety of  business  and
individual clients through his firm, Thomas W. Scott and Associates, since 1989.
In addition to his  accounting  practice,  Mr. Scott is a partner in a number of
commercial real estate projects.

         Tommy E. Warner,  age 55, has served as a director of the Company since
1999 and as a  director  of the Bank  since its  organization  in May 2000.  Mr.
Warner  has  owned  and  served  as  President  of  several   Blockbuster  Video
franchises,  since 1990. Mr. Warner also manages Warner Properties,  LLC, a real
estate investment company owning residential properties.

         Claude  Williams,  Jr., age 77, has served as a director of the Company
since 1999 and as a director of the Bank since its organization in May 2000. Mr.
Williams  has  managed his  family's  controlling  interest  in Allison  Outdoor
Advertising, Ltd., and co-owned Williamson Outdoor Advertising since 1997.


COMMITTEES OF THE BOARDS OF DIRECTORS

         We have established the following committees of the Board of Directors:

         AUDIT, COMPLIANCE AND COMPENSATION COMMITTEE. The Audit, Compliance and
Compensation  Committee  recommends to the Board of Directors of the Company the
independent  public  accountants  to be selected to audit the  Company's and the
Bank's annual financial statements and approves any special assignments given to
the independent public accountants. The committee also reviews the planned scope
of the annual audit, any changes in accounting  principles and the effectiveness
and  efficiency  of the Bank's  internal  accounting  staff.  Additionally,  the
committee  provides  oversight to the Company's and the Bank's  compliance staff
for adherence with  regulatory  rules and  regulations,  including the Community
Reinvestment  Act. The committee  further  establishes  compensation  levels for
officers  of the  Company  and the Bank,  reviews  management  organization  and
development,  reviews significant  employee benefit programs and establishes and
administers  executive


                                       29
<PAGE>

compensation  programs,  including  the  Company's  Stock Option Plan  described
below.  The committee is chaired by Thomas W. Scott, and also includes Robert E.
Burton, Michael S. Gautreaux and Ted R. Ridlehuber.

         LOAN COMMITTEE. The Bank's Loan Committee reviews any loan request made
by a potential borrower over an established credit threshold for compliance with
the  Bank's  lending  policies  and  federal  and state  rules  and  regulations
governing  extensions of credit. After making this review, the committee decides
whether to extend credit to the potential borrower.  The committee is chaired by
Claude  Williams,  Jr., and also includes  John M. Barrett,  William S. Huggins,
Henry D. Joiner and Thomas Z. Lanier, III.

         ASSET AND  LIABILITY  MANAGEMENT  COMMITTEE.  The  Asset and  Liability
Management  Committee provides guidance to the Company and the Bank in balancing
the yields and  maturities in the Bank's loans and  investments to its deposits.
The  committee is chaired by Tommy E. Warner,  and also includes Jack L. Barton,
Michael R. Carson, Ronald L. Hill and William S. Huggins.


ITEM 10.  EXECUTIVE COMPENSATION

The following table sets forth a summary of  compensation  paid to or accrued on
behalf of the Chief Executive  Officer and the other  executive  officers of the
Company whose aggregate  compensation  exceeded  $100,000 for services  rendered
during the 2000 fiscal year.

<TABLE>
<CAPTION>
                                                  Summary Compensation Table
                                                                                                                 Long Term
                                                                                                               Compensation
                                                               Annual Compensation                                Awards
                                             ---------------------------------------------------------    ----------------------
                                                                                                               Securities
    Name and Principal                                                              Other Annual           Underlying Options
         Position                Year         Salary ($)       Bonus ($)          Compensation ($)                 (#)
----------------------------    ------      -------------    ------------       ----------------------    ----------------------

<S>                              <C>         <C>               <C>                       <C>                      <C>
William S. Huggins,              2000        $ 133,000         $ 15,000                  -0-                      20,884
President and Chief
Executive Officer                1999        $  66,500(1)         -0-                    -0-                        -0-

Thomas Z. Lanier, III            2000        $  97,650         $ 11,000                  -0-                      15,263
Executive Vice President -
Lending                          1999        $  49,500(1)         -0-                    -0-                         -0-


----------
(1) Represents salary accrued from June 29, 1999 to December 31, 1999.

</TABLE>


EMPLOYMENT AGREEMENTS

         The Company and the Bank have entered into  employment  agreements with
William S. Huggins,  Thomas Z. Lanier,  III and Michael R. Carson  regarding Mr.
Huggins'  employment as President and Chief  Executive  Officer of the Bank, Mr.
Lanier's  employment  as Executive  Vice  President-Lending  of the Bank and Mr.
Carson's  employment as Executive Vice  President-Operations  of the Bank. Under
the terms of the agreements,  Mr. Huggins will receive a base salary of $133,000
per year,  Mr.  Lanier  will  receive a base  salary of $99,000 per year and Mr.
Carson will receive a base salary of $84,000 per year.  The  agreements  provide
that at the  end of each  year,  Messrs.  Huggins,  Lanier  and  Carson  will be
entitled  to  receive a cash  bonus,  to be awarded  by the  Company's  Board of
Directors, based on the Bank's performance. Additionally, the agreements provide
that the  Company  will grant  incentive  stock  options to purchase a number of
shares of the  Company  common  stock also based on the Bank's  performance.  If
granted,  the options will become  exercisable in equal annual increments of 20%
beginning  on the  one-year  anniversary  of the date of grant  and will have an
exercise  price of $10.00 per share.  The aggregate and maximum number of shares
that would be granted under the options in the event all performance  goals were


                                       30
<PAGE>

achieved is 49,000 (Messrs. Huggins, Lanier and Carson would each receive 20,884
shares,  15,263 shares and 12,853 shares,  respectively).  The Company will also
provide an automobile to Mr. Huggins.

         The initial  term of the  employment  agreements  commenced on June 29,
1999 and will continue for a period of three years. At the end of the first year
of each agreement,  and at the end of each year thereafter,  each agreement will
be extended for a successive  one-year  period  unless one of the parties to the
agreement  notifies  the other  parties  of his or its  intent not to extend the
agreement. Employment under the employment agreements may be terminated:

         o        by the Company for cause (as defined in the agreements);

         o        by the employee if the Company breaches any material provision
                  of his agreement; or

         o        upon employee's death or disability.

         If the Company or the Bank terminates  employment  without cause or the
employee  terminates  employment  with  cause,  the  Company or the Bank will be
required to pay the  compensation  and  provide the health and dental  insurance
coverage due under the  agreement for a period equal to the greater of 12 months
from the date of  termination  or the remaining  term of the  agreement.  If the
employment  of the employee is terminated  for any reason,  the employee will be
prohibited  from  competing  with  the  Company  or the Bank or  soliciting  its
customers or employees within the geographic area set forth in the agreement for
two years after the date of  termination.  If the  employee  provides  notice of
termination  of  employment  within 90 days  following  a change of control  (as
defined in each  agreement)  the Company  will pay the  employee's  then-current
compensation and benefits for 12 months after termination.

DIRECTOR COMPENSATION

         The  directors  of the  Company  and the Bank  will not be  compensated
separately  for  their  services  as  directors  until  we  become  cumulatively
profitable.  Thereafter,  we will adopt compensatory  policies for our directors
that conform to applicable law.

STOCK OPTION PLAN

         GENERAL.  The Company has adopted a Stock Option Plan that provides the
Company with the  flexibility  to grant the stock  incentives  described in this
section of this Report to key employees,  officers,  directors,  consultants and
advisers of the Company or the Bank for the purpose of giving them a proprietary
interest  in, and to  encourage  them to remain in the employ or service of, the
Company or the Bank. The Company's Board of Directors has reserved 70,000 shares
of the Company  common  stock.  The number of shares  reserved  for issuance may
change in the  event of a stock  split,  recapitalization  or  similar  event as
described in the plan.

         ADMINISTRATION.   The  Company's  Audit,  Compliance  and  Compensation
Committee,  which is comprised of at least two non-employee  directors appointed
by the Company's  Board of Directors,  administers the plan. The Company's Board
of Directors  considers  the standards  contained in both Section  162(m) of the
Internal  Revenue Code of 1986, as currently in effect and Rule  16(b)(3)  under
the  Securities  Exchange Act of 1934, as currently in effect,  when  appointing
members  to  the  Audit,  Compliance  and  Compensation  Committee.  The  Audit,
Compliance and Compensation  Committee and the Company's Board of Directors have
the  authority to grant awards  under the plan,  to determine  the terms of each
award,  to  interpret  the  provisions  of  the  plan  and  to  make  all  other
determinations that they may deem necessary or advisable to administer the plan.

         The plan permits the Audit,  Compliance and  Compensation  Committee or
the Company's  Board of Directors,  to grant stock options to eligible  persons.
Options may be granted on an individual basis or to a group of eligible persons.
Accordingly,  the Audit,  Compliance and Compensation Committee or the Company's
Board of  Directors  determine,  within  the  limits of the plan,  the number of
shares of the Company  common stock  subject to


                                       31
<PAGE>

an option, to whom an option is granted and the exercise price and forfeiture or
termination  provisions of each option. A holder of a stock option generally may
not transfer the option during his or her lifetime.

         OPTION  TERMS.  The plan  provides  for  incentive  stock  options  and
non-qualified stock options. The Audit, Compliance and Compensation Committee or
the  Company's  Board of  Directors,  will  determine  whether  an  option is an
incentive  stock  option or a  non-qualified  stock  option  when it grants  the
option, and the option will be evidenced by an agreement describing the material
terms of the option.

         The Audit, Compliance and Compensation Committee or the Company's Board
of Directors will determine the exercise price of an option.  The exercise price
of an  incentive  stock option may not be less than the fair market value of the
Company  common  stock on the date of the  grant,  or less than 110% of the fair
market value if the participant owns more than 10% of the Company's  outstanding
common stock. When the incentive stock option is exercised,  the Company will be
entitled to place a legend on the certificates representing the shares of common
stock purchased upon exercise of the option to identify them as shares of common
stock  purchased  upon the exercise of an incentive  stock option.  The exercise
price of non-qualified  stock options may be greater than, less than or equal to
the fair  market  value of the  common  stock on the  date  that the  option  is
awarded,  based upon any reasonable  measure of fair market value. The committee
may  permit  the  exercise  price  to be  paid in  cash  or by the  delivery  of
previously  owned shares of common  stock,  and, if permitted in the  applicable
option  agreement,  through a cashless  exercise executed through a broker or by
having a number  of shares of common  stock  otherwise  issuable  at the time of
exercise withheld.

         The Audit, Compliance and Compensation Committee or the Company's Board
of  Directors,  will  also  determine  the  term of an  option.  The  term of an
incentive  stock option or  non-qualified  stock option may not exceed ten years
from the date of grant,  but any incentive stock option granted to a participant
who owns more than 10% of the  Company's  outstanding  common  stock will not be
exercisable  after the  expiration  of five  years  after the date the option is
granted.  Subject to any further limitations in the applicable  agreement,  if a
participant's  employment  terminates,  an incentive stock option will terminate
and  become  unexercisable  no  later  than  three  months  after  the  date  of
termination  of  employment.  If,  however,  termination of employment is due to
death or disability,  one year will be substituted for the  three-month  period.
Incentive  stock  options are also subject to the further  restriction  that the
aggregate  fair market  value,  determined  as of the date of the grant,  of the
Company  common  stock as to which any  incentive  stock  option  first  becomes
exercisable  in any  calendar  year is limited to  $100,000  per  recipient.  If
incentive stock options  covering more than $100,000 worth of the Company common
stock first  become  exercisable  in any one calendar  year,  the excess will be
non-qualified  options.  For purposes of determining which options, if any, have
been granted in excess of the $100,000  limit,  options  will be  considered  to
become exercisable in the order granted.

         TERMINATION  OF OPTIONS.  The terms of  particular  options may provide
that they  terminate,  among other  reasons,  upon the holder's  termination  of
employment or other status with the Company or the Bank,  upon a specified date,
upon the holder's  death or  disability,  or upon the  occurrence of a change in
control of the  Company.  An  agreement  may provide  that if the holder dies or
becomes disabled,  the holder's estate or personal  representative  may exercise
the option.  The Audit,  Compliance and Compensation  Committee or the Company's
Board of  Directors,  may,  within  the  terms  of the  plan and the  applicable
agreement,  cancel,  accelerate,  pay or continue an option that would otherwise
terminate for the reasons discussed above.

         REORGANIZATIONS. The plan provides for an appropriate adjustment in the
number  and kind of shares  subject to  unexercised  options in the event of any
change in the  outstanding  shares of common  stock by reason of a stock  split,
stock dividend,  combination or  reclassification  of shares,  recapitalization,
merger  or   similar   event.   In  the  event  of  some   types  of   corporate
reorganizations,  the  Audit,  Compliance  and  Compensation  Committee  or  the
Company's  Board  of  Directors,  may,  within  the  terms  of the  plan and the
applicable  agreement,  substitute,  cancel,  accelerate,  cancel  for  cash  or
otherwise adjust the terms of an option.

         AMENDMENT AND TERMINATION OF THE PLAN. The Company's Board of Directors
has the  authority  to amend or  terminate  the  plan.  The  Company's  Board of
Directors is not required to obtain  shareholder  approval to terminate the plan
or, generally, to amend the plan, but may condition any amendment or termination
of the plan


                                       32
<PAGE>

upon  shareholder  approval  if  it  determines  that  shareholder  approval  is
necessary or appropriate  under tax,  securities,  or other laws.  However,  any
action by the Company's  Board of Directors may not adversely  affect the rights
of a holder of a stock option without the holder's consent.

         FEDERAL  INCOME TAX  CONSEQUENCES.  The following  discussion  outlines
generally the federal  income tax  consequences  of  participation  in the plan.
Individual circumstances may vary and each participant should rely on his or her
own tax counsel for advice  regarding  federal  income tax  treatment  under the
plan.

         o                 INCENTIVE  STOCK  OPTIONS.  A  participant  will  not
                  recognize  income upon the grant of an incentive stock option.
                  A participant who exercises an incentive stock option will not
                  be taxed when he or she  exercises  the option or a portion of
                  the option.  Instead, the participant will be taxed when he or
                  she sells the shares of common stock  purchased  upon exercise
                  of the incentive stock option.  The participant  will be taxed
                  on the difference between the price he or she paid for the the
                  Company  common stock and the amount for which he or she sells
                  the stock. If the participant  does not sell the shares of the
                  Company common stock prior to two years from the date of grant
                  of the  incentive  stock option and one year from the date the
                  stock is transferred to him or her, the gain will be a capital
                  gain and the Company will not get a  corresponding  deduction.
                  If the  participant  sells the  shares of the  Company  common
                  stock at a gain before that time, the  difference  between the
                  amount  the  participant  paid for the stock and the lesser of
                  its fair  market  value on the date of  exercise or the amount
                  for which the stock is sold will be taxed as  ordinary  income
                  and  the  Company  will be  entitled  to a  corresponding  tax
                  deduction.  If the participant sells the shares of the Company
                  common  stock for less than the  amount he or she paid for the
                  stock  prior  to the one- or  two-year  period  indicated,  no
                  amount will be taxed as  ordinary  income and the loss will be
                  taxed as a capital loss. Exercise of an incentive stock option
                  may  subject a  participant  to, or  increase a  participant's
                  liability for, the alternative minimum tax.

         o                 NON-QUALIFIED   OPTIONS.   A  participant   will  not
                  recognize  income upon the grant of a non-qualified  option or
                  at any time before the  exercise of the option or a portion of
                  the option.  When the  participant  exercises a  non-qualified
                  option or  portion  of the  option,  he or she will  recognize
                  compensation  taxable as ordinary income in an amount equal to
                  the  excess of the fair  market  value of the  Company  common
                  stock on the date the option is exercised  over the price paid
                  for the stock,  and the  Company  will then be  entitled  to a
                  corresponding deduction.

         Depending  upon the time period for which shares of the Company  common
stock are held after exercising an option, the sale or other taxable disposition
of shares acquired by exercising a non-qualified option generally will result in
a short- or long-term  capital gain or loss equal to the difference  between the
amount realized on the disposition and the fair market value of such shares when
the non-qualified option was exercised.

         Special  rules apply to a  participant  who  exercises a  non-qualified
option by paying the  exercise  price,  in whole or in part,  by the transfer of
shares of the Company  common stock to the Company and to a  participant  who is
subject to the reporting  requirements of Section 16 of the Securities  Exchange
Act of 1934, as currently in effect.

         The following table sets forth certain information  regarding the grant
of stock options in 2000 to the persons named in the Summary Compensation Table.


                                       33
<PAGE>

<TABLE>
<CAPTION>
                                            Option Grants in Last Fiscal Year

                                                    Individual Grants

                                                            % of Total
                          Number of Securities            Options Granted            Exercise or
                           Underlying Options             to Employees in             Base Price          Expiration
Name                           Granted (#)                  Fiscal Year                 ($/Sh)               Date
---------------------   ---------------------------  ----------------------------  -------------------  ----------------
<S>                              <C>                           <C>                      <C>                  <C>
William S. Huggins               20,884                        40.16                    $10.00               (1)

Thomas Z. Lanier, III            15,263                        29.35                    $10.00               (2)

---------------
(1)      The  expiration  date for an option to purchase  6,000 shares is May 8,
         2010, and the expiration  date for an option to purchase  14,884 shares
         is December 31, 2010.
(2)      The  expiration  date for an option to purchase  4,385 shares is May 8,
         2010, and the expiration  date for an option to purchase  10,878 shares
         is December 31, 2010.
</TABLE>


         The  following  table  sets forth  certain  information  regarding  the
exercise  of  stock  options  in  2000  by the  persons  named  in  the  Summary
Compensation  Table and the value of options  held by such persons at the end of
such fiscal year.

                    Aggregated Option Exercises in Last Fiscal Year
                           and Fiscal Year-end Option Values
<TABLE>
<CAPTION>
                              Number of Securities          Value of Unexercised
                             Underlying Unexercised         In-the-Money Options
                              Options at FY-End (#)              at FY-End ($)
Name                        Exercisable/Unexercisable    Exercisable/Unexercisable(1)
----                        -------------------------    ----------------------------
<S>                                 <C>                               <C>
William S. Huggins                  0/20,884                          0/0

Thomas Z. Lanier, III
                                    0/15,263                          0/0

---------------
(1)      Dollar values  calculated by  determining  the  difference  between the
         estimated  fair market value of the Company's  common stock at December
         31, 2000 ($10.00) and the exercise  price of such  options.  Because no
         organized  trading  market exists for the Company's  common stock,  the
         fair market  value was  computed by  reference  to recent  sales of the
         Company's common stock.
</TABLE>


                                       34
<PAGE>


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information regarding the shares
of the Company's  common stock owned as of March 1, 2000, (i) by each person who
beneficially  owned more than 5% of the shares of the  Company's  common  stock,
(ii) by each of the Company's  directors and the  Company's  executive  officers
named in the summary compensation table above, and (iii) by all of the Company's
directors and executive officers as a group.

<TABLE>
<CAPTION>
                                                          Shares of Common Stock                 Percent of
                  Beneficial Owner                         Beneficially Owned(1)             Outstanding Shares
                  ----------------                         ---------------------             ------------------
<S>                                                                  <C>                               <C>
DIRECTORS AND EXECUTIVE OFFICERS

John H. Barrett                                                      50,000                            6.7
325 Red Oak Trail
Athens, Georgia  30606

Jack L. Barton                                                       25,000                            3.4
1100 Shoals Pointe
Athens, Georgia  30606

Robert E. Burton                                                     50,000                            6.7
105 Post Oak Trail
Athens, Georgia  30606

Michael R. Carson                                                    10,000                            1.3
210 Waterford Way
Athens, Georgia  30606

Michael S. Gautreaux                                                 15,000                            2.0
1522 Highway 330
Bogart, Georgia  30622

Ronald L. Hill                                                       10,000                            1.3
1516 Annapolis Way
Grayson, Georgia  30017

William S. Huggins                                                   25,000                            3.4
1051 Ridge Pointe
Athens, Georgia  30606

Henry D. Joiner                                                      25,000                            3.4
410 Millstone Circle
Athens, Georgia  30606

Thomas Z. Lanier, III                                                22,500                            3.0
240 Oak Bend Drive
Athens, Georgia  30606

Ted R. Ridlehuber                                                    40,000                            5.4
211 McWhorter Drive
Athens, Georgia  30606
</TABLE>


                                                       35
<PAGE>

<TABLE>
<CAPTION>
                                                          Shares of Common Stock                 Percent of
                  Beneficial Owner                         Beneficially Owned(1)             Outstanding Shares
                  ----------------                         ---------------------             ------------------
<S>                                                                  <C>                               <C>
Thomas W. Scott                                                      20,000                            2.7
265 Lullwater Road
Athens, Georgia  30606

Tommy E. Warner                                                      50,000                            6.7
180 Wedgefield Lane
Athens, Georgia  30606

Claude Williams, Jr.                                                 30,000                            4.0
570 Sprindale Street
Athens, Georgia  30606

All directors and executive officers as a group
(13 Persons)....................................                    372,500                           50.3

----------
*  Less than 1%
(1)  Determined in accordance with Rule 13d-3 under the Securities  Exchange Act
     of 1934,  as amended  (the  "Exchange  Act").  Information  with respect to
     beneficial ownership is based upon information furnished by each owner.
</TABLE>


ITEM 12.  CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS

      The Company and the Bank has banking and other  business  transactions  in
the ordinary  course of business with  directors and officers of the Company and
the Bank,  including members of their families or corporations,  partnerships or
other  organizations  in which these  directors  and officers have a controlling
interest.  Transactions  between  the  Company  or the  Bank  and  any of  their
directors or officers:

         o are on substantially the same terms, including price or interest rate
and collateral, as those prevailing at the time for comparable transactions with
unrelated parties,  and any banking transactions will not be expected to involve
more  than the  normal  risk of  collectibility  or  present  other  unfavorable
features to the Company or the Bank;

         o are on  terms  no less  favorable  than  could  be  obtained  from an
unrelated third party; and

         o are approved by a majority of the directors,  including a majority of
the directors who do not have an interest in the transaction.


                                       36
<PAGE>


                                     PART IV

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

         (a)  Exhibits.  Periodic  reports,  registration  statements  and other
information  filed by the Company  with the SEC  pursuant  to the  informational
requirements  of the  Securities  Act of 1993,  as  amended  and the  Securities
Exchange Act of 1934, as amended may be inspected and copied at the SEC's Public
Reference Room, 450 Fifth Street, N.W.,  Washington,  D.C. 20549, and the public
may obtain  information on the operation of the Public Reference Room by calling
the  SEC  at   1-800-SEC-0330.   The  SEC  also   maintains  an  Internet   site
(http://www.sec.gov)  that makes available  reports,  proxy statements and other
information regarding the Company.

Exhibit        Description
-------        -----------

3.1            Articles of Incorporation of NBG Bancorp  (Incorporated herein by
               reference  to the  exhibit  of the same  number of NBG  Bancorp's
               Registration  Statement on Form SB-2 filed on September  24, 1999
               (Commission File No. 333-87763))

3.2            Bylaws of NBG Bancorp  (Incorporated  herein by  reference to the
               exhibit  of  the  same  number  of  NBG  Bancorp's   Registration
               Statement  on Form SB-2 filed on November  18,  1999  (Commission
               File No. 333-87763))

4.2            See Exhibits 3.1 and 3.2 hereto for provisions of the Articles of
               Incorporation  and  Bylaws  of NBG  Bancorp  defining  rights  of
               holders of the Common Stock.

4.3            Form of  Organizer  Warrant  Agreement  (Incorporated  herein  by
               reference  to the  exhibit  of the same  number of NBG  Bancorp's
               Registration  Statement  on Form SB-2 filed on November  18, 1999
               (Commission File No. 333-87763))

10.1           Letter  Agreement for purchase of main office property dated June
               1, 1999  (Incorporated  herein by reference to the exhibit of the
               same number of NBG Bancorp's  Registration Statement on Form SB-2
               filed on November 18, 1999 (Commission File No. 333-87763))

10.2*          Employment  Agreement,  dated November 15, 1999, by and among The
               National  Bank of  Georgia  (Proposed),  NBG  Bancorp,  Inc.  and
               William  S.  Huggins  (Incorporated  herein by  reference  to the
               exhibit  of  the  same  number  of  NBG  Bancorp's   Registration
               Statement  on Form SB-2 filed on November  18,  1999  (Commission
               File No. 333-87763))

10.3              [RESERVED]

10.4*          Employment  Agreement,  dated November 15, 1999, by and among The
               National Bank of Georgia (Proposed), NBG Bancorp, Inc. and Thomas
               Z. Lanier,  III (Incorporated  herein by reference to the exhibit
               of the same number of NBG  Bancorp's  Registration  Statement  on
               Form  SB-2  filed  on  November  18,  1999  (Commission  File No.
               333-87763))

10.5*          Employment  Agreement,  dated November 15, 1999, by and among The
               National  Bank of  Georgia  (Proposed),  NBG  Bancorp,  Inc.  and
               Michael  R.  Carson  (Incorporated  herein  by  reference  to the
               exhibit  of  the  same  number  of  NBG  Bancorp's   Registration
               Statement  on Form SB-2 filed on November  18,  1999  (Commission
               File No. 333-87763))

10.6           Loan  Agreement  between NBG  Bancorp,  Inc.,  as  Borrower,  and
               Georgia First Bank, N.A. as Lender, and Organizers as Guarantors.
               (Incorporated  herein by  reference  to the  exhibit  of the same
               number of NBG Bancorp's Registration Statement on Form SB-2 filed
               on December 1, 1999 (Commission File No. 333-87763))

10.7           NBG  Bancorp,  Inc.  Stock  Option Plan  (Incorporated  herein by
               reference  to the  exhibit  of the same  number of NBG  Bancorp's
               Registration  Statement  on Form SB-2 filed on November  18, 1999
               (Commission File No. 333-87763))

10.8           Form of NBG Bancorp,  Inc.  Incentive Stock Option  (Incorporated
               herein by  reference  to the  exhibit  of the same  number of NBG
               Bancorp's  Registration  Statement on Form SB-2 filed on November
               18, 1999 (Commission File No. 333-87763))

10.9           Form   of  NBG   Bancorp,   Inc.   Non-Qualified   Stock   Option
               (Incorporated  herein by  reference  to the  exhibit  of the same
               number of NBG Bancorp's Registration Statement on Form SB-2 filed
               on November 18, 19999 (Commission File No. 333-87763))


                                       37
<PAGE>

10.10          Escrow  Agreement,  dated as of November 10, 1999, by and between
               NBG Bancorp,  Inc.  and Georgia  First Bank,  N.A.  (Incorporated
               herein by  reference  to the  exhibit  of the same  number of NBG
               Bancorp's  Registration  Statement on Form SB-2 filed on November
               18, 1999 (Commission File No. 333-87763))

10.11          Form of Organizer  Warrant  Agreement  (contained in Exhibit 4.3)
               (Incorporated  herein by  reference  to the  exhibit  of the same
               number of NBG Bancorp's Registration Statement on Form SB-2 filed
               on December 1, 1999 (Commission File No. 333-87763))

21.1           Subsidiaries of the Registrant

*   Compensation  Plan or  Arrangement  required  to be  listed as an
    exhibit to Form 10-KSB.

         (b)      Reports on Form 8-K.  No reports on Form 8-K were  required to
be filed by NBG Bancorp during the fourth quarter of 2000.



                                       38


<PAGE>



                                NBG BANCORP, INC.
                                 AND SUBSIDIARY

                          CONSOLIDATED FINANCIAL REPORT
                                DECEMBER 31, 2000

                                TABLE OF CONTENTS


                                                                           PAGE

INDEPENDENT AUDITOR'S REPORT...............................................F-2

FINANCIAL STATEMENTS

     CONSOLIDATED BALANCE SHEETS...........................................F-3
     CONSOLIDATED STATEMENTS OF OPERATIONS.................................F-4
     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT).............F-5
     CONSOLIDATED STATEMENTS OF CASH FLOWS.................................F-6
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS...........................F-7-21



                                      F-1
<PAGE>


                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors
Nbg Bancorp, Inc. and Subsidiary
Athens, Georgia


         We have audited the  accompanying  consolidated  balance  sheets of NBG
BANCORP,  INC. AND  SUBSIDIARY as of December 31, 2000 and 1999, and the related
consolidated  statements of operations,  stockholders' equity (deficit) and cash
flows for the year ended  December  31,  2000 and the period  from June 1, 1999,
date of inception,  to December 31, 1999.  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  financial  statements  referred to above  present
fairly, in all material respects,  the financial  position of NBG Bancorp,  Inc.
and  subsidiary  as of  December  31,  2000 and 1999,  and the  results of their
operations  and their cash flows for the year ended  December  31,  2000 and the
period from June 1, 1999, date of inception, to December 31, 1999, in conformity
with generally accepted accounting principles.



/s/ Mauldin & Jenkins, LLC


Atlanta, Georgia
January 24, 2001




                                      F-2


<PAGE>








                                                NBG BANCORP, INC.
                                                 AND SUBSIDIARY

                                           CONSOLIDATED BALANCE SHEETS
                                           DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>

                                                                                2000                   1999
                                                                            ------------           ------------


                                                     ASSETS
                                                     ------
<S>                                                                         <C>                    <C>
Cash and due from banks                                                     $  3,231,524           $      3,894
Restricted cash                                                                     --                  680,405
Federal funds sold                                                             5,020,000                   --
Securities available-for-sale                                                    206,900                   --

Loans                                                                         17,701,381                   --
Less allowance for loan losses                                                   217,810                   --
                                                                            ------------           ------------
          Loans, net                                                          17,483,571                   --

Premises and equipment                                                         1,558,534                 11,225
Other assets                                                                     165,414                  4,483
                                                                            ------------           ------------

          TOTAL ASSETS                                                      $ 27,665,943           $    700,007
                                                                            ============           ============

                                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                                 ----------------------------------------------

Deposits
    Noninterest-bearing                                                     $  3,862,706           $       --
    Interest-bearing                                                          16,994,752                   --
                                                                            ------------           ------------
           Total deposits                                                     20,857,458                   --
    Line of credit                                                                  --                   48,968
    Subscribers' deposits                                                           --                  680,405
    Other liabilities                                                             51,319                188,661
                                                                            ------------           ------------
          TOTAL LIABILITIES                                                   20,908,777                918,034
                                                                            ------------           ------------

Commitments and contingencies

Stockholders' equity (deficit)
    Preferred stock, $1 par value; 1,000,000 shares authorized;
        no shares issued and outstanding                                            --                     --
    Common stock, $1 par value, 10,000,000 shares authorized;
        741,260 and 1 shares issued and outstanding, respectively                741,260                      1
    Capital surplus                                                            6,591,578                   --
    Accumulated deficit                                                         (575,672)              (218,028)
                                                                            ------------           ------------

          TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                 6,757,166               (218,027)
                                                                            ------------           ------------

          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)              $ 27,665,943           $    700,007
                                                                            ============           ============
</TABLE>

See Notes to Consolidated Financial Statements.


                                                       F-3
<PAGE>




                                                NBG BANCORP, INC.
                                                 AND SUBSIDIARY
<TABLE>
<CAPTION>

                                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                  YEAR ENDED DECEMBER 31, 2000 AND PERIOD FROM
                              JUNE 1, 1999, DATE OF INCEPTION, TO DECEMBER 31, 1999




                                                                                     2000                 1999
                                                                                 -----------           -----------
<S>                                                                              <C>                   <C>
INTEREST INCOME
    Loans                                                                        $   774,823           $      --
    Taxable securities                                                                 7,989                  --
    Federal funds sold                                                               215,494                  --
    Deposits in other banks                                                           91,383                  --
                                                                                 -----------           -----------
          TOTAL INTEREST INCOME                                                    1,089,689                  --
                                                                                 -----------           -----------

INTEREST EXPENSE
    Deposits                                                                         348,054                  --
    Other borrowings                                                                   4,332                 1,297
                                                                                 -----------           -----------
          TOTAL INTEREST EXPENSE                                                     352,386                 1,297
                                                                                 -----------           -----------

          NET INTEREST INCOME (EXPENSE)                                              737,303                (1,297)
PROVISION FOR LOAN LOSSES                                                            217,810                  --
                                                                                 -----------           -----------
          NET INTEREST INCOME (EXPENSE) AFTER PROVISION FOR LOAN LOSSES              519,493                (1,297)
                                                                                 -----------           -----------

OTHER INCOME
    Service charges on deposit accounts                                               16,198                  --
    Mortgage origination fees                                                         92,679                  --
    Other operating income                                                            11,035                  --
                                                                                 -----------           -----------
          TOTAL OTHER INCOME                                                         119,912                  --
                                                                                 -----------           -----------

OTHER EXPENSES
    Salaries and employee benefits                                                   601,779               173,749
    Equipment and occupancy expenses                                                 158,450                22,864
    Other operating expenses                                                         236,820                20,118
                                                                                 -----------           -----------
          TOTAL OTHER EXPENSES                                                       997,049               216,731
                                                                                 -----------           -----------

          LOSS BEFORE INCOME TAXES                                                  (357,644)             (218,028)

INCOME TAXES                                                                            --                    --
                                                                                 -----------           -----------

          NET LOSS                                                               $  (357,644)          $  (218,028)
                                                                                 ===========           ===========

LOSSES PER SHARE                                                                 $     (0.48)          $      --
                                                                                 ===========           ===========
</TABLE>

See Notes to Consolidated Financial Statements.


                                                         F-4

<PAGE>



                                                         NBG BANCORP, INC.
                                                          AND SUBSIDIARY
<TABLE>
<CAPTION>
                                     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                                           YEAR ENDED DECEMBER 31, 2000 AND PERIOD FROM
                                       JUNE 1, 1999, DATE OF INCEPTION, TO DECEMBER 31, 1999



                                             COMMON STOCK                                                              TOTAL
                                    -----------------------------           CAPITAL           ACCUMULATED          STOCKHOLDERS'
                                      SHARES            PAR VALUE           SURPLUS             DEFICIT          EQUITY (DEFICIT)
                                    -----------        -----------        -----------         -----------        ----------------
<S>               <C> <C>               <C>            <C>                <C>                 <C>                 <C>
BALANCE, JUNE 1, 1999
  (DATE OF INCEPTION)                      --          $      --          $      --           $      --           $      --
    Net loss                               --                 --                 --              (218,028)           (218,028)
    Issuance of common stock                  1                  1               --                  --                     1
                                    -----------        -----------        -----------         -----------         -----------
BALANCE, DECEMBER 31, 1999                    1                  1               --              (218,028)           (218,027)
    Net loss                               --                 --                 --              (357,644)           (357,644)
    Issuance of common stock            741,259            741,259          6,671,340                --             7,412,599
    Stock offering costs                   --                 --              (79,762)               --               (79,762)
                                    -----------        -----------        -----------         -----------         -----------
BALANCE, DECEMBER 31, 2000              741,260        $   741,260        $ 6,591,578         $  (575,672)        $ 6,757,166
                                    ===========        ===========        ===========         ===========         ===========
</TABLE>


See Notes to Consolidated Financial Statements.



                                                                F-5
<PAGE>



                                        NBG BANCORP, INC.
                                         AND SUBSIDIARY

                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                          YEAR ENDED DECEMBER 31, 2000 AND PERIOD FROM
                      JUNE 1, 1999, DATE OF INCEPTION, TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
                                                                 2000                  1999
                                                             ------------         ------------
<S>                                                          <C>                  <C>
OPERATING ACTIVITIES
    Net loss                                                 $   (357,644)        $   (218,028)
    Adjustments to reconcile net loss to net cash
        used in operating activities:
        Depreciation                                               71,620                  992
        Provision for loan losses                                 217,810                 --
        Increase in interest receivable                          (107,972)                --
        Increase in interest payable                               39,397                  329
        Increase (decrease) in accrued expenses                  (176,739)             188,332
        Other operating activities                                (53,128)              (4,483)
                                                             ------------         ------------

              Net cash used in operating activities              (366,656)             (32,858)
                                                             ------------         ------------

INVESTING ACTIVITIES
    Purchases of securities available-for-sale                   (206,900)                --
    Net increase in Federal funds sold                         (5,020,000)                --
    Net increase in loans                                     (17,701,381)                --
    Purchase of premises and equipment                         (1,618,760)             (12,217)
                                                             ------------         ------------

            Net cash used in investing activities             (24,547,041)             (12,217)
                                                             ------------         ------------

FINANCING ACTIVITIES
    Net increase in deposits                                   20,857,458                 --
    Proceeds from line of credit                                  200,882               48,968
    Repayment of line of credit                                  (249,850)                --
    Proceeds from issuance of common stock                      7,332,837                    1
                                                             ------------         ------------

            Net cash provided by financing activities          28,141,327               48,969
                                                             ------------         ------------

Net increase in cash and due from banks                         3,227,630                3,894

Cash and due from banks at beginning of period                      3,894                 --
                                                             ------------         ------------

Cash and due from banks at end of year                       $  3,231,524         $      3,894
                                                             ============         ============

SUPPLEMENTAL DISCLOSURES
    Cash paid for interest                                   $    312,989         $        968
</TABLE>

See Notes to Consolidated Financial Statements.


                                               F-6
<PAGE>


                                NBG BANCORP, INC.
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Nature of Business
         ------------------

           NBG Bancorp,  Inc. (the  "Company")  is a bank holding  company whose
           business is conducted by its  wholly-owned  subsidiary,  The National
           Bank of Georgia (the "Bank").  The Bank is a commercial  bank located
           in Athens, Clarke County,  Georgia. The Bank provides a full range of
           banking  services in its primary market area of Clarke County and the
           surrounding  counties.  The Bank commenced its banking  operations on
           May 8, 2000.

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

           The  consolidated  financial  statements  include the accounts of the
           Company and its subsidiary. Significant intercompany transactions and
           accounts are eliminated in consolidation.

           The preparation of financial  statements in conformity with generally
           accepted accounting  principles requires management to make estimates
           and  assumptions  that  affect  the  reported  amounts  of assets and
           liabilities as of the balance sheet date and the reported  amounts of
           revenues and expenses  during the reporting  period.  Actual  results
           could  differ  from  those  estimates.  Material  estimates  that are
           particularly  susceptible  to  significant  change  in the near  term
           relate to the  determination  of the  allowance  for loan  losses and
           deferred taxes.

         Cash, Due From Banks and Cash Flows
         -----------------------------------

           For  purposes  of  reporting  cash  flows,  cash and due  from  banks
           includes  cash on hand,  cash  items in  process  of  collection  and
           amounts due from banks. Cash flows from loans, Federal funds sold and
           deposits are reported net.

           The Company  maintains  amounts due from banks which,  at times,  may
           exceed Federally insured limits.  The Company has not experienced any
           losses in such accounts.

         Restricted Cash
         ---------------

           At December 31, 1999,  subscribers' deposits of $680,405 were held in
           escrow.  The escrow  agreement  prohibited the release of funds until
           the Company had received  approval for its  application for a charter
           from the regulatory authorities. All subscriptions, including accrued
           interest,  were to be returned in full if these  conditions  were not
           met. All funds were released from escrow on May 3, 2000.



                                       F-7
<PAGE>




                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         Securities
         ----------

           All securities are classified as  available-for-sale  and recorded at
           fair value with  unrealized  gains and losses  excluded from earnings
           and  reported  in  other  comprehensive  income.   Restricted  equity
           securities  without a readily  determinable fair value are classified
           as available-for-sale and recorded at cost.

           Interest and  dividends,  amortization  of premiums and  accretion of
           discounts are recognized in interest income.  Gains and losses on the
           sale of securities are determined  using the specific  identification
           method.  Declines  in the fair value of  securities  below their cost
           that are deemed to be other than  temporary are reflected in earnings
           as realized losses.

         Loans
         -----

           Loans are reported at their  outstanding  unpaid  principal  balances
           less the allowance for loan losses. Interest income is accrued on the
           unpaid balance.

           Loan  origination fees and direct costs of origination are recognized
           at the time the loan is recorded.  Because net loan  origination fees
           and  costs  are not  material,  the  results  of  operations  are not
           materially  different  than the  results  which  would be obtained by
           accounting  for all  fees  and  costs in  accordance  with  generally
           accepted accounting principles.

           The  accrual  of  interest  on  loans  is   discontinued   when,   in
           management's  opinion, the borrower may be unable to meet payments as
           they  become  due,  unless  the loan is  well-secured.  All  interest
           accrued but not  collected for loans that are placed on nonaccrual or
           charged off is reversed against  interest income.  Interest income is
           subsequently   recognized  only  to  the  extent  cash  payments  are
           received, until returned to accrual status.

           The allowance for loan losses is established  through a provision for
           loan  losses  charged  to  expense.  Loans are  charged  against  the
           allowance  when  management   believes  the   collectibility  of  the
           principal  is  unlikely.  Subsequent  recoveries  are credited to the
           allowance.

           The allowance is an amount that management  believes will be adequate
           to absorb estimated  losses in the loan portfolio.  The allowance for
           loan losses is  evaluated  on a regular  basis by  management  and is
           based upon  management's  periodic review of the nature and volume of
           the loan portfolio, adverse situations that may affect the borrower's
           ability to repay,  estimated  value of any underlying  collateral and
           prevailing  economic   conditions.   This  evaluation  is  inherently
           subjective  as  it  requires   estimates  that  are   susceptible  to
           significant  revision  as  more  information  becomes  available.  In
           addition,   regulatory  agencies,   as  an  integral  part  of  their
           examination process,  periodically review the Company's allowance for
           loan  losses,  and may require the Company to make  additions  to the
           allowance based on their judgment about information available to them
           at the time of their examinations.


                                       F-8
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         Loans (Continued)
         -----------------

           A loan is considered impaired when it is probable the Company will be
           unable  to  collect  all  principal  and  interest  payments  due  in
           accordance with the contractual terms of the loan agreement. Impaired
           loans are measured based on the present value of expected future cash
           flows  discounted at the loan's  effective  interest rate, the loan's
           observable  market price,  or the fair value of the collateral if the
           loan is collateral dependent.  The amount of impairment,  if any, and
           any subsequent changes are included in the allowance for loan losses.

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

           Land is carried at cost.  Premises and  equipment are carried at cost
           less accumulated  depreciation.  Depreciation is computed principally
           by the  straight-line  method over the estimated  useful lives of the
           assets.

         Transfers of Financial Assets
         -----------------------------

           Transfers  of  financial  assets  are  accounted  for as sales,  when
           control   over  the  assets  has  been   surrendered.   Control  over
           transferred  assets is deemed to be  surrendered  when (1) the assets
           have been isolated from the Company,  (2) the transferee  obtains the
           right (free of conditions that constrain it from taking  advantage of
           that right) to pledge or exchange the transferred assets, and (3) the
           Company does not  maintain  effective  control  over the  transferred
           assets through an agreement to repurchase them before their maturity.

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

           Deferred income tax assets and  liabilities are determined  using the
           balance sheet method.  Under this method,  the net deferred tax asset
           or liability is determined  based on the tax effects of the temporary
           differences  between  the book and tax bases of the  various  balance
           sheet assets and liabilities and gives current recognition to changes
           in tax rates and laws.

         Losses Per Share
         ----------------

           Losses per share are  computed by dividing  net loss by the  weighted
           average  number  of  shares of  common  stock  outstanding.  Weighted
           average shares  outstanding as of December 31, 2000 were 741,260,  or
           the number of shares sold in the Company's  initial public  offering.
           The  dilutive  effect  of  potential  common  shares  does not have a
           material  effect on  diluted  losses per share and is  therefore  not
           presented. Potential common shares consist of stock options and stock
           warrants. Losses per share for the period ended December 31, 1999 has
           not  been  presented  due to only one  organizational  share of stock
           outstanding.


                                       F-9
<PAGE>




                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         Stock Compensation Plans
         ------------------------

           Statement  of  Financial   Accounting  Standards  ("SFAS")  No.  123,
           Accounting for Stock-Based  Compensation,  encourages all entities to
           adopt a fair value based  method of  accounting  for  employee  stock
           compensation  plans,  whereby  compensation  cost is  measured at the
           grant date based on the value of the award and is recognized over the
           service period, which is usually the vesting period. However, it also
           allows an entity to continue to measure  compensation  cost for those
           plans using the intrinsic value based method of accounting prescribed
           by Accounting  Principles Board Opinion No. 25,  Accounting for Stock
           Issued to Employees, whereby compensation cost is the excess, if any,
           of the quoted  market  price of the stock at the grant date (or other
           measurement date) over the amount an employee must pay to acquire the
           stock.  Stock options and warrants  issued under the  Company's  plan
           have no intrinsic  value at the grant date,  and under Opinion No. 25
           no compensation  cost is recognized for them. The Company has elected
           to continue with the accounting methodology in Opinion No. 25.

         Recent Developments
         -------------------

           In June 1998, the Financial  Accounting  Standards  Board issued SFAS
           No.  133,   Accounting   for  Derivative   Instruments   and  Hedging
           Activities, effective for fiscal years beginning after June 15, 2000.
           This Statement  establishes  accounting  and reporting  standards for
           derivative  instruments  and hedging  activities,  including  certain
           derivative instruments embedded in other contracts, and requires that
           an entity  recognize all  derivatives as assets or liabilities in the
           balance sheet and measure them at fair value.  If certain  conditions
           are met, an entity may elect to  designate a  derivative  as follows:
           (a) a hedge  of the  exposure  to  changes  in the  fair  value  of a
           recognized asset or liability or an unrecognized firm commitment, (b)
           a hedge of the  exposure  to  variable  cash  flows  of a  forecasted
           transaction,  or (c) a hedge of the foreign  currency  exposure of an
           unrecognized  firm  commitment,  an  available-for-sale  security,  a
           foreign  currency  denominated  forecasted  transaction,   or  a  net
           investment in a foreign corporation. The Statement generally provides
           for  matching  the timing of the  recognition  of the gain or loss on
           derivatives designated as hedging instruments with the recognition of
           the changes in the fair value of the item being hedged.  Depending on
           the type of hedge,  such  recognition will be in either net income or
           other  comprehensive  income.  For a derivative  not  designated as a
           hedging  instrument,  changes in fair value will be recognized in net
           income in the period of change.  Management  is currently  evaluating
           the impact of adopting this  Statement on the  financial  statements,
           but does not anticipate that it will have a material impact.

NOTE 2.  SECURITIES

         As of December 31, 2000,  securities  available-for-sale  were composed
         entirely of restricted  equity  securities of the Federal  Reserve Bank
         and Federal Home Loan Bank totaling $206,900.  There were no unrealized
         gains or losses  associated with these securities.  In addition,  these
         securities were not pledged for any purpose.


                                       F-10
<PAGE>




                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3.  LOANS AND ALLOWANCE FOR LOAN LOSSES

         The  composition  of loans as of  December  31, 2000 is  summarized  as
         follows:

          Commercial                                         $  2,175,000
          Real estate - construction                            1,568,000
          Real estate - mortgage                               13,073,000
          Consumer instalment and other                           885,381
                                                             ------------
                                                               17,701,381

          Allowance for loan losses                              (217,810)
                                                             ------------
          Loans, net                                         $ 17,483,571
                                                             ============

         Changes in the allowance for loan losses as of December 31, 2000 are as
         follows:

          BALANCE, BEGINNING OF YEAR                         $   --
            Provision for loan losses                         217,810
            Loans charged off                                    --
            Recoveries of loans previously charged off           --
                                                             --------
          BALANCE, END OF YEAR                               $217,810
                                                             ========


         Management  has  identified no amounts of impaired  loans as defined by
         SFAS No. 114,  Accounting by Creditors for  Impairment of a Loan, as of
         and for the year ended December 31, 2000.

         In the ordinary  course of business,  the Company has granted  loans to
         certain related parties,  including directors,  executive officers, and
         their affiliates.  The interest rates on these loans were substantially
         the  same  as  rates  prevailing  at the  time of the  transaction  and
         repayment terms are customary for the type of loan.  Changes in related
         party loans for the year ended December 31, 2000 are as follows:

          BALANCE, BEGINNING OF YEAR                         $      --
             Advances                                           2,760,307
             Repayments                                          (189,149)
                                                              -----------
          BALANCE, END OF YEAR                               $  2,571,158
                                                              ===========

NOTE 4.  PREMISES AND EQUIPMENT

         Premises and equipment is summarized as follows:

                                                       December 31,
                                            --------------------------------
                                                 2000               1999
                                            -----------         -----------

          Land and improvements             $   700,000         $      --
          Buildings and improvements            381,885                --
          Equipment                             548,100              12,217
                                            -----------         -----------
                                              1,629,985              12,217
          Accumulated depreciation              (71,451)               (992)
                                            -----------         -----------
                                            $ 1,558,834         $    11,225
                                            ===========         ===========

                                       F-11
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 5.  DEPOSITS

         The aggregate  amount of time deposits in  denominations of $100,000 or
         more at December 31, 2000 was  $2,910,064.  At December  31, 2000,  the
         scheduled maturities of time deposits are as follows:

                    2001                              $   5,770,865
                    2002                                  2,238,958
                    2003                                    600,033
                    2004                                    101,721
                    2005                                    211,757
                                                      -------------
                                                      $   8,923,334
                                                      =============

         Related party deposits totaled $4,951,526 as of December 31, 2000.


NOTE 6.  EMPLOYEE AND DIRECTOR BENEFITS

         Stock Warrants
         --------------

           In recognition of the efforts and financial  risks  undertaken by the
           Company's   organizers,   the  Company   granted  each  organizer  an
           opportunity  to  purchase  one share of common  stock for each  share
           purchased in the Company's  common stock offering.  The warrants vest
           over a five year period from the date the Bank  commenced  operations
           and are  exercisable  in whole or in part  during the ten year period
           following  the date the Bank  commenced  operations,  at an  exercise
           price equal to $10 per share. The warrants are  nontransferable,  but
           shares   issued   pursuant  to  the  exercise  of  warrants  will  be
           transferable,  subject to compliance with applicable securities laws.
           At December 31, 2000, there were 372,500 warrants outstanding.

         Stock Options
         -------------

           The Company has adopted a stock  option plan during 2000 which grants
           key  employees  options  to  purchase  shares of common  stock of the
           Company.  Option  prices  and terms  are  determined  by a  committee
           appointed by the Board of Directors. The plan provides 70,000 options
           to purchase common shares of the Company. At December 31, 2000, there
           were 50,000 options outstanding.



                                       F-12
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 6.  EMPLOYEE AND DIRECTOR BENEFITS (CONTINUED)

         Other pertinent  information  related to the options and warrants is as
         follows:

<TABLE>
<CAPTION>
                                                                                                 YEAR ENDED
                                                                                             DECEMBER 31, 2000
                                                                                       ------------------------------
                                                                                                          WEIGHTED-
                                                                                                           AVERAGE
                                                                                                           EXERCISE
                                                                                          NUMBER            PRICE
                                                                                       ------------      ------------
                <S>                                                                       <C>            <C>
               Options and warrants outstanding, beginning of year                             -         $       -
                  Granted                                                                  422,500             10.00
                  Exercised                                                                    -                 -
                                                                                       ------------
               Options and warrants outstanding, end of year, none exercisable             422,500             10.00
                                                                                       ============

               Weighted-average fair value of options and warrants
                  granted during the year                                                                $      4.15
</TABLE>


<TABLE>
<CAPTION>

                                                                                                         WEIGHTED-
                                                                                                         AVERAGE
                                                                                                        REMAINING
                                                                                         PRICE           CONTRACTUAL
                                                                        NUMBER           RANGE          LIFE IN YEARS
                                                                      ------------   ------------    ----------------
               <S>                                                        <C>        <C>                    <C>
               Options and warrants outstanding, none exercisable         422,500    $     10.00            9.35
                                                                      ============
</TABLE>


         The  Company  applies  Opinion  25  and  related   Interpretations   in
         accounting  for  the  stock  options  and  warrants.   Accordingly,  no
         compensation  cost has been  recognized.  As of December 31,  2000,  no
         options or warrants were exercisable,  therefore,  proforma disclosures
         required by SFAS No. 123 are not presented.

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

                                                                  Year Ended,
                                                                 December 31,
                                                                     2000
                                                                -------------

                    Dividend yield                                        -
                    Expected life                                    10 years
                    Expected volatility                                   -
                    Risk-free interest rate                             5.45%




                                       F-13
<PAGE>




                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 7.  INCOME TAXES

         Income taxes consist of the following:

                                                      YEARS ENDED DECEMBER 31,
                                                    ----------------------------
                                                       2000              1999
                                                    ---------         ---------

               Current                              $    --           $    --
               Deferred                              (134,590)          (82,275)
               Change in valuation allowance          134,590            82,275
                                                    ---------         ---------
                              Income tax            $    --           $    --
                                                    =========         =========

         The Company's  income tax differs from the amounts computed by applying
         the Federal  income tax statutory  rates to loss before income taxes. A
         reconciliation of the differences is as follows:

<TABLE>
<CAPTION>
                                                                              YEARS ENDED DECEMBER 31,
                                                       --------------------------------------------------------------
                                                                    2000                            1999
                                                       -------------------------------   ----------------------------
                                                           AMOUNT          PERCENT           Amount        Percent
                                                       ---------------   -------------   ---------------  -----------

               <S>                                     <C>                    <C>        <C>                <C>
               Income tax (benefit) at statutory rate  $    (121,599)         34  %      $     (74,130)      34  %
                   Other items                                   334          -                     -        -
                   State tax (benefit)                       (13,325)          4                (8,145)       4
               Change in valuation allowance                  134,590        (38)               82,275      (38)
                                                       ---------------   -------------   ---------------  -----------
               Income tax                              $          -           -   %      $          -        -   %
                                                       ===============   =============   ===============  ===========
</TABLE>


         The components of deferred income taxes are as follows:

<TABLE>
<CAPTION>
                                                                                       DECEMBER 31,
                                                                                 ------------------------
                                                                                   2000            1999
                                                                                 --------        --------
               <S>                                                               <C>             <C>
               Deferred tax assets:
                  Loan loss reserves                                             $ 19,169        $   --
                  Preopening and organization expenses                            124,814          82,275
                  Net operating loss carryforward                                 119,347            --
                  Other                                                                70            --
                                                                                 --------        --------
                                                                                  263,400          82,275

               Valuation allowance                                                216,865          82,275
                                                                                 --------        --------
                                                                                   46,535            --
                                                                                 --------        --------

               Deferred tax liabilities:
                  Depreciation                                                      3,112            --
                  Cash basis adjustment for income tax reporting purposes          43,423            --
                                                                                 --------        --------
                                                                                   46,535            --
                                                                                 --------        --------

               Net deferred taxes                                                $   --          $   --
                                                                                 ========        ========
</TABLE>


                                                     F-14
<PAGE>



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 8.  COMMITMENTS AND CONTINGENCIES

         The Company is 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 and standby letters of credit.  They involve,  to varying
         degrees,  elements of credit risk and  interest  rate risk in excess of
         the amount recognized in the balance sheets.

         The Company's exposure to credit loss in the event of nonperformance by
         the other party to the financial  instrument for  commitments to extend
         credit and standby  letters of credit is represented by the contractual
         amount of those instruments.  The Company uses the same credit policies
         in  making  commitments  and  conditional  obligations  as it does  for
         on-balance sheet instruments. A summary of the Company's commitments as
         of December 31, 2000 is as follows:


               Commitments to extend credit        $3,726,000
               Standby letters of credit               30,000
                                                   ----------
                                                   $3,756,000
                                                   ==========

         Commitments  to extend  credit are  agreements to lend to a customer as
         long as there  is no  violation  of any  condition  established  in the
         contract.  Since many of the commitments are expected to expire without
         being  drawn  upon,  the total  commitment  amounts do not  necessarily
         represent  future  cash   requirements.   The  Company  evaluates  each
         customer's  creditworthiness  on a  case-by-case  basis.  The amount of
         collateral obtained,  if deemed necessary by the Company upon extension
         of credit, is based on management's credit evaluation of the customer.

         Standby  letters of credit are  conditional  commitments  issued by the
         Company to guarantee  the  performance  of a customer to a third party.
         Those  guarantees  are primarily  issued to support  public and private
         borrowing arrangements.  The credit risk involved in issuing letters of
         credit is essentially  the same as that involved in extending  loans to
         customers.  Collateral is required in instances which the Company deems
         necessary.

         In the normal  course of  business,  the Company is involved in various
         legal  proceedings.   In  the  opinion  of  management,  any  liability
         resulting from such proceedings would not have a material effect on the
         Company's financial statements.



                                       F-15
<PAGE>




                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9.  CONCENTRATIONS OF CREDIT

         The Company originates primarily commercial,  residential, and consumer
         loans to  customers  in Clarke  County and  surrounding  counties.  The
         ability of the  majority  of the  Company's  customers  to honor  their
         contractual  loan  obligations  is  dependent  on the  economy in these
         areas.  Eighty-three percent of the Company's loan portfolio is secured
         by real  estate,  of which a  substantial  portion  is  secured by real
         estate  in  the   Company's   market   area.   The  other   significant
         concentrations of credit by type of loan are set forth in Note 3.

         The Company, as a matter of policy, does not generally extend credit to
         any single  borrower or group of related  borrowers in excess of 15% of
         unimpaired   capital  and  unimpaired   surplus,   as  defined  by  the
         Comptroller of the Currency, or approximately $1,043,000.

NOTE 10. REGULATORY MATTERS

         The Bank is subject to certain  restrictions on the amount of dividends
         that may be declared without prior regulatory approval. At December 31,
         2000, no dividends could be declared without regulatory approval.

         The Company and the Bank are also subject to various regulatory capital
         requirements  administered by the federal banking agencies.  Failure to
         meet minimum capital  requirements can initiate certain mandatory,  and
         possibly  additional  discretionary  actions  by  regulators  that,  if
         undertaken,  could  have a  direct  material  effect  on the  financial
         statements.  Under  capital  adequacy  guidelines  and  the  regulatory
         framework for prompt corrective  action,  the Company and 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 Company and the Bank to maintain  minimum amounts
         and ratios of Total and Tier I capital to  risk-weighted  assets and of
         Tier I capital to average assets.  Management believes,  as of December
         31,  2000,   the  Company  and  the  Bank  met  all  capital   adequacy
         requirements  to which they are subject.

         As of December 31, 2000, the most recent  notification from the Federal
         Deposit Insurance Corporation  categorized the Bank as well capitalized
         under the  regulatory  framework for prompt  corrective  action.  To be
         categorized as well  capitalized,  the Bank must maintain minimum Total
         risk-based,  Tier I risk-based, and Tier I leverage ratios as set forth
         in the  following  table.  There are no conditions or events since that
         notification that management believes have changed the Bank's category.
         The  holding  company  is  not  subject  to  prompt  corrective  action
         provisions;  therefore, consolidated ratios have not been presented for
         this item.



                                       F-16
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 10. REGULATORY MATTERS (CONTINUED)

         The  Company  and the Bank's  actual  capital  amounts and ratios as of
         December 31, 2000 are presented in the following table:

<TABLE>
<CAPTION>
                                                                                                           To be Well
                                                                                For Capital             Capitalized Under
                                                                                 Adequacy               Prompt Corrective
                                                        Actual                   Purposes               Action Provisions
                                               -------------------------  ------------------------  --------------------------
                                                   Amount       Ratio        Amount        Ratio       Amount         Ratio
                                               ------------  -----------  -----------   ----------  ------------   -----------
                                                                           (Dollars in Thousands)
                                               -------------------------------------------------------------------------------
     <S>                                            <C>         <C>           <C>          <C>           <C>          <C>
     December 31, 2000:
     Total Capital to Risk Weighted Assets:
        Consolidated                                6,975       39.73%        1,405        8.00%           N/A           N/A
        Bank                                        6,953       39.60%        1,405        8.00%         1,756        10.00%
     Tier I Capital to Risk Weighted Assets:
        Consolidated                                6,757       38.48%          703        4.00%           N/A           N/A
        Bank                                        6,735       38.35%          703        4.00%         1,054         6.00%
     Tier I Capital to Average Assets:
        Consolidated                                6,757       28.38%          953        4.00%           N/A           N/A
        Bank                                        6,735       28.28%          953        4.00%         1,191         5.00%
</TABLE>


NOTE 11. FAIR VALUE OF FINANCIAL INSTRUMENTS

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



                                       F-17
<PAGE>


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 11. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

         The  following  methods  and  assumptions  were used by the  Company in
         estimating fair value disclosures for financial instruments.

         Cash, Due From Banks, and Federal Funds Sold:
         ---------------------------------------------

           The carrying  amounts of cash, due from banks, and Federal funds sold
           approximate fair values.

         Securities:
         -----------

           The carrying values of equity securities with no readily determinable
           fair value approximate fair values.

         Loans:
         ------

           For  variable-rate   loans  that  reprice   frequently  and  have  no
           significant  change in credit risk, fair values are based on carrying
           values.  For  other  loans,  the  fair  values  are  estimated  using
           discounted  cash flow analyses,  using interest rates currently being
           offered for loans with similar terms to borrowers with similar credit
           quality.   Fair  values  for  impaired  loans  are  estimated   using
           discounted cash flow analyses or underlying collateral values.

         Deposits:
         ---------

           The  carrying  amounts  of demand  deposits,  savings  deposits,  and
           variable-rate  certificates of deposit approximate their fair values.
           Fair values for  fixed-rate  certificates  of deposit  are  estimated
           using a discounted cash flow  calculation that applies interest rates
           currently  being offered on  certificates to a schedule of aggregated
           expected monthly maturities on time deposits.

         Accrued Interest:
         -----------------

           The  carrying  amounts of  accrued  interest  approximate  their fair
           values.

         Off-balance Sheet InstrumentS:
         ------------------------------

           Fair values of the Company's  off-balance sheet financial instruments
           are based on fees currently charged to enter into similar agreements.
           Since the majority of the  Company's  off-balance  sheet  instruments
           consist of nonfee-producing,  variable-rate commitments,  the Company
           has determined they do not have a distinguishable fair value.



                                       F-18
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 11. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

           The  estimated  fair  values and  carrying  amounts of the  Company's
           financial instruments as of December 31, 2000 were as follows:
<TABLE>
<CAPTION>
                                                                                       Carrying            Fair
                                                                                        Amount             Value
                                                                                    -------------     --------------
                  <S>                                                               <C>               <C>
                  Financial assets:
                     Cash, due from banks,
                        and Federal funds sold                                      $   8,251,524     $   8,251,524
                     Securities available-for-sale                                        206,900           206,900
                     Loans                                                             17,483,571        17,610,881
                     Accrued interest receivable                                          107,972           107,972

                  Financial liabilities:
                     Deposits                                                          20,857,458        20,934,124
                     Accrued interest payable                                              39,397            39,397
</TABLE>

NOTE 12.  SUPPLEMENTARY FINANCIAL DATA

         Components of other operating expenses in excess of 1% of total revenue
         for the year ended December 31, 2000 are as follows:

<TABLE>
<CAPTION>
                      <S>                                                                             <C>
                      OTHER EXPENSES:
                        Advertising                                                                   $       15,857
                        Stationery and supplies                                                               37,691
                        Data processing                                                                       17,760
                        Legal and professional                                                                47,881
                        Telephone                                                                             20,196
                        Insurance                                                                             17,716
</TABLE>




                                                          F-19
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 13. PARENT COMPANY FINANCIAL INFORMATION

         The following  information  presents the condensed  balance  sheets and
         statements of operations and cash flows of NBG Bancorp,  Inc. as of and
         for the year ended December 31, 2000 and period from June 1, 1999, date
         of inception, to December 31, 1999.

<TABLE>
<CAPTION>
                                                       CONDENSED BALANCE SHEETS

                                                                                         2000                   1999
                                                                                     ------------           -----------
            <S>                                                                       <C>                   <C>
            ASSETS
              Cash                                                                    $    20,238           $     3,894
              Restricted cash                                                                --                 680,405
              Investment in subsidiary                                                  6,736,928                  --
              Other assets                                                                   --                  15,708
                                                                                      -----------           -----------

                  TOTAL ASSETS                                                        $ 6,757,166           $   700,007
                                                                                      ===========           ===========


              Subscribers' deposits                                                   $      --             $   680,405
              Other liabilities                                                              --                 237,629
              Stockholders' equity (deficit)                                            6,757,166              (218,027)
                                                                                      -----------           -----------

                    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)              $ 6,757,166           $   700,007
                                                                                      ===========           ===========



                                                 CONDENSED STATEMENTS OF OPERATIONS

                                                                                          2000                  1999
                                                                                      -----------           -----------


            EXPENSES
             Interest                                                                 $      --             $     1,297
             Other                                                                           --                 216,731
                                                                                      -----------           -----------
                                                                                             --                 218,028

                 LOSS BEFORE LOSSES OF SUBSIDIARY                                            --                (218,028)

                 LOSSES OF SUBSIDIARY                                                    (357,344)                 --
                                                                                      -----------           -----------

          NET LOSS                                                                    $  (357,344)          $  (218,028)
                                                                                      ===========           ===========
</TABLE>




                                                            F-20
<PAGE>
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 13.   PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)


<TABLE>
<CAPTION>
                                                CONDENSED STATEMENTS OF CASH FLOWS


                                                                               2000                  1999
                                                                           -----------           -----------

                <S>                                                        <C>                   <C>
                OPERATING ACTIVITIES
                 Net loss                                                  $  (357,644)          $  (218,028)
                  Adjustments to reconcile net loss to net
                     cash used in operating activities:
                     Losses of subsidiary                                      357,644                  --
                     Other operating activities                                 (3,893)              185,170
                                                                           -----------           -----------

                        NET CASH USED IN OPERATING ACTIVITIES                   (3,893)              (32,858)
                                                                           -----------           -----------

               INVESTING ACTIVITIES
                  Investment in subsidiary                                  (7,312,600)                 --
                  Purchase of premises and equipment                              --                 (12,217)
                                                                           -----------           -----------

                        NET CASH USED IN INVESTING ACTIVITIES               (7,312,600)              (12,217)
                                                                           -----------           -----------

               FINANCING ACTIVITIES
                  Proceeds from issuance of common stock                     7,332,837                     1
                  Proceeds from line of credit                                    --                  48,968
                                                                           -----------           -----------

                        NET CASH PROVIDED BY FINANCING ACTIVITIES            7,332,837                48,969
                                                                           -----------           -----------

               Net increase in cash                                             16,344                 3,894

               Cash at beginning of period                                       3,894                  --
                                                                           -----------           -----------

               Cash at end of year                                         $    20,238           $     3,894
                                                                           ===========           ===========
</TABLE>



                                                     F-21

<PAGE>

                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended,  the Registrant has duly caused this Report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                             NBG BANCORP, INC.

Dated:  March 21, 2001                       By:  /s/ William S. Huggins
                                                ------------------------
                                                  William S. Huggins
                                                  President and Chief Executive
                                                    Officer
                                                  (Principal Executive Officer)


Dated:  March 21, 2001                       By:  /s/ Michael R. Carson
                                                -----------------------
                                                  Michael R. Carson
                                                  Chief Financial Officer
                                                  (Principal Accounting Officer)





<PAGE>


         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf of
the Registrant, in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

               Signature                                 Title                                  Date
               ---------                                 -----                                  ----
<S>                                      <C>                                            <C>

-----------------------------------                    Director
John Harold Barrett



-----------------------------------                    Director
Jack Lee Barton

-----------------------------------                    Director
Robert E. Burton


/s/ Michael R. Carson                    Executive Vice President and Director           March 21, 2001
-----------------------------------       (principal financial and accounting
Michael R. Carson                                      officer)


----------------------------------                     Director
Michael Sidney Gautreaux


----------------------------------                     Director
Ronald Lewis Hill

/s/ William S. Huggins                       President and Chief Executive               March 21, 2001
---------------------------------                Officer and Director
William S. Huggins                           (principal executive officer)


/s/ Henry D. Joiner                                    Director                          March 21, 2001
---------------------------------
Henry D. Joiner

/s/ Thomas Z. Lanier, III                Executive Vice President and Director           March 21, 2001
---------------------------------
Thomas Z. Lanier, III


----------------------------------                     Director
Ted Ruff Ridlehuber


/s/ Thomas Wells Scott                                 Director                          March 21, 2001
---------------------------------
Thomas Wells Scott

/s/ Tommy Edward Warner                                Director                          March 21, 2001
---------------------------------
Tommy Edward Warner

/s/ Claude Williams, Jr.                               Director                          March 21, 2001
---------------------------------
Claude Williams, Jr.
</TABLE>



<PAGE>


                                  EXHIBIT INDEX

Exhibit           Description
-------           -----------

21.1              Subsidiaries of the Registrant