U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                Annual Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

For the fiscal year                               Commission file number
ended December 31, 1998                                  333-13583

                          FIRST GEORGIA COMMUNITY CORP.
                 (Name of small business issuer in its charter)

       Georgia                                                 58-2261088
(State of Incorporation)                                    (I.R.S. Employer
                                                           Identification No.)
150 Covington Street
P. O. Box 1534
Jackson, Georgia                                                   30233
(Address of principal executive offices)                         (Zip Code)

                                 (770) 504-1090
                           (Issuer's telephone number)

      Securities Registered pursuant to Section 12(b) of the Exchange Act:
                                      None
      Securities Registered pursuant to Section 12(g) of the Exchange Act:
                          Common stock, $5.00 par value
                                (Title of Class)

Check whether Issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the  Securities  Exchange  Act  during  the past 12 months (or for such
shorter period that the  Registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.
                                                                  Yes X  No   

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will be
contained,  to the  best of  Registrant's  knowledge,  in  definitive  Proxy  or
Information  Statements  incorporated  by reference in Part III of this Form 10-
KSB or any amendment to this Form 10-KSB. [X]

Registrant's  revenues  for  its  fiscal  year  ended  December  31,  1998  were
$2,264,395.

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Registrant at March 15, 1999 was $4,915,090  based on private sales known to the
Registrant  at a price of $10.00 per share (the price at which the  Registrant's
stock was sold in its initial public offering in 1997).  There is no established
trading market for the Registrant's stock.

The number of shares  outstanding of Registrant's class of common stock at March
15, 1999 was 758,458 shares of common stock.

     Documents  Incorporated  by  Reference:  Certain  pages of the 1998  Annual
Report to  Shareholders  and the  Proxy  Statement  for the  Annual  Meeting  of
Shareholders to be held on April 22, 1999 are  incorporated  herein by reference
in Parts II, III, and IV of this Form 10-KSB.

Transitional Small Business Disclosure Format (check one):
Yes     No X 
                                  Page 1 of 73
                            Exhibit Index on Page 16


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                                TABLE OF CONTENTS

                                            Page      PART I


ITEM 1.           DESCRIPTION OF BUSINESS .........................     3

ITEM 2.           DESCRIPTION OF PROPERTIES........................    12

ITEM 3.           LEGAL PROCEEDINGS................................    13

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF
                  SECURITY HOLDERS.................................    13


                                     PART II

ITEM 5.           MARKET FOR COMMON EQUITY AND
                  RELATED STOCKHOLDER MATTERS......................    13

ITEM 6.           MANAGEMENT'S DISCUSSION AND ANALYSIS
                  OR PLAN OF OPERATION ............................    14

ITEM 7.           FINANCIAL STATEMENTS ............................    14

ITEM 8.           CHANGES IN AND DISAGREEMENTS WITH
                  ACCOUNTANTS ON ACCOUNTING AND
                  FINANCIAL DISCLOSURE ............................    14


                                    PART III

ITEM 9.           DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
                  AND CONTROL PERSONS .............................    14
ITEM 10.          EXECUTIVE COMPENSATION ..........................    15

ITEM 11.          SECURITY OWNERSHIP OF CERTAIN
                  BENEFICIAL OWNERS AND MANAGEMENT ................    15

ITEM 12.          CERTAIN RELATIONSHIPS AND
                  RELATED TRANSACTIONS ............................    15

ITEM 13.          EXHIBITS AND REPORTS ON FORM 8-K ................    15

SIGNATURES ........................................................    17


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                                     PART I

ITEM 1.           DESCRIPTION OF BUSINESS

(a)      Business Development

First  Georgia   Community  Corp.  (the  "Company"),   Jackson,   Georgia,   was
incorporated  as a Georgia  business  corporation  for the purpose of becoming a
bank  holding  company by  acquiring  all of the common  stock of First  Georgia
Community Bank,  Jackson,  Georgia (the "Bank") upon its formation.  The Company
filed  applications to the Board of Governors of the Federal Reserve System (the
"Board") and the Georgia Department of Banking and Finance (the "DBF") for prior
approval to become a bank holding  company.  The Company received Board approval
on December  24,  1996,  and the DBF  approval on December 3, 1996.  The Company
became a bank  holding  company  within the meaning of the federal  Bank Holding
Company Act (the "Act") and the Georgia bank holding  company law (the  "Georgia
Act")  upon  the  acquisition  of all of the  Common  Stock of the  Bank,  which
occurred in September, 1997.

The Bank is the sole operating  subsidiary of the Company.  On October 11, 1996,
the Bank  received the approval of its Articles of  Incorporation  from the DBF.
Its permit to begin  business  has been  issued,  and it opened for  business on
September 8, 1997.  The deposits at the Bank are insured by the Federal  Deposit
Insurance  Corporation  (the "FDIC"),  initial  approval by the FDIC having been
obtained on September 30, 1996.

In October, 1996, the Company registered 800,000 shares of its common stock with
the  Securities  and Exchange  Commission  under the Securities Act of 1933. The
registration  statement  became  effective on December 11, 1996, and the Company
began its stock  offering a few days later.  The stock offering was completed as
of July 7, 1997. 758,458 shares were sold in the offering, raising total capital
of $7,584,580.

(b)      Business of Issuer

The Bank conducts a general  commercial  banking business in its primary service
area,  emphasizing  the banking needs of individuals  and small- to medium-sized
businesses.  The  Company  conducts  business  from its  office  located  at 150
Covington Street, Jackson, Georgia 30233.

The  Company  is  authorized  to engage in any  activity  permitted  by law to a
corporation,  subject  to  applicable  Federal  regulatory  restrictions  on the
activities of bank holding companies.  The Company was formed for the purpose of
becoming  a holding  company to own 100% of the stock of the Bank.  The  holding
company structure  provides the Company with greater  flexibility than the Bank.
While

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the Company has no present plans to engage  actively in any nonbanking  business
activities,  management  anticipates studying the feasibility of establishing or
acquiring  subsidiaries  to engage in other  business  activities  to the extent
permitted by law.

The principal  business of the Bank is to accept deposits from the public and to
make loans and other investments in and around Butts County, Georgia, as well as
the geographically adjacent counties, its primary service area.

The Bank offers a full range of deposit  services that are  typically  available
from  financial  institutions.  The Bank offers  personal and business  checking
accounts,  interest-bearing  checking accounts,  savings accounts,  money market
funds and  various  types of  certificates  of  deposit.  The Bank  also  offers
installment  loans, real estate loans,  second mortgage loans,  commercial loans
and home equity lines of credit. In addition, the Bank provides such services as
official bank checks and money orders,  Mastercard  and VISA credit cards,  safe
deposit boxes,  traveler's  checks,  bank by mail, direct deposit of payroll and
social security  checks,  and US Savings Bonds. All deposit accounts are insured
by the FDIC up to the maximum amount currently permitted by law.

The Bank's lending  philosophy is to make loans,  taking into  consideration the
safety  of  the  Bank's  depositors'  funds,  the  preservation  of  the  Bank's
liquidity,  the interest of the Company's  shareholders,  and the welfare of the
community.  Interest  income  from the  Bank's  lending  operations  will be the
principal  component of the Bank's income,  so therefore prudent lending will be
essential for the prosperity of the Bank.

The principal sources of income for the Bank will be interest and fees collected
on loans,  interest and dividends  collected on other investments,  and mortgage
brokerage  fees.  The  principal  expenses of the Bank will be interest  paid on
deposits, employee compensation, office expenses, and other overhead expenses.

The Bank's business plan for its initial years of operation  relies  principally
upon local  advertising and promotional  activity and upon personal  contacts by
its directors,  officers and  shareholders  to attract  business and to acquaint
potential customers with the Bank's personalized services. The Bank emphasizes a
high degree of  personalized  client  service in order to be able to provide for
each customer's  banking needs.  The Bank's  marketing  approach  emphasizes the
advantages  of dealing  with an  independent,  locally-owned  and managed  state
chartered bank to meet the particular  needs of individuals,  professionals  and
small-to-medium-size  businesses  in the  community.  All banking  services  are
continually  evaluated  with regard to their  profitability  and efforts will be
made to modify the Bank's  business plan if the Bank does not prove  successful.
The Bank does not presently offer trust or permissible securities services.

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Supervision and Regulation

Regulation  of the Bank.  The  operations  of the Bank are  subject to state and
federal statutes  applicable to state chartered banks whose deposits are insured
by the FDIC and the  regulations  of the DBF and the  FDIC.  Such  statutes  and
regulations  relate to,  among other  things,  required  reserves,  investments,
loans,  mergers  and  consolidations,   issuances  of  securities,   payment  of
dividends, establishment of branches and other aspects of the Bank's operations.
Under the provisions of the Federal  Reserve Act, the Bank is subject to certain
restrictions  on any  extensions  of  credit to the  Company  or,  with  certain
exceptions,  other affiliates,  and on the taking of such stock or securities as
collateral on loans to any borrower.  In addition,  the Bank is prohibited  from
engaging in certain  tie-in  arrangements  in  connection  with any extension of
credit or the providing of any property or service.

The Bank, as a state  chartered  bank, is permitted to branch only to the extent
that banks are  permitted to branch  under  Georgia  law. In January  1996,  the
Georgia  legislature  passed a bill  designed  to  eliminate  Georgia's  current
intra-county branching restrictions. The new legislation provides that effective
after July 1, 1996,  banks in Georgia,  with prior  approval of the DBF (and the
appropriate federal regulatory authority),  may establish additional branches in
up to three new counties in the state per year. On July 1, 1998,  full statewide
branching  goes into effect as Georgia  banks may  establish new branches in any
county  in  the  state  with  prior  approval  of  the  appropriate   regulatory
authorities.

The FDIC adopted final risk-based  capital guidelines for all FDIC insured state
chartered  banks that are not members of the Federal  Reserve  System  effective
December 31, 1990. As of December 31, 1992, all banks are required to maintain a
minimum ratio of total capital to risk weighted assets of 8 percent (of which at
least 4  percent  must  consist  of Tier 1  capital).  Tier 1  capital  of state
chartered  banks (as defined in  regulations)  generally  consists of (i) common
stockholders  equity;  (ii) noncumulative  perpetual preferred stock and related
surplus;  and (iii) minority  interests in the equity  accounts of  consolidated
subsidiaries.

In addition,  the FDIC adopted a minimum ratio of Tier 1 capital to total assets
of banks. This capital measure is generally  referred to as the leverage capital
ratio. The FDIC has established a minimum leverage capital ratio of 3 percent if
the FDIC  determines  that the  institution is not  anticipating or experiencing
significant growth and has  well-diversified  risk,  including no undue interest
rate exposure,  excellent asset quality,  high liquidity,  good earnings and, in
general,  is considered a strong banking  organization,  rated Composite 1 under
the Uniform Financial  Institutions Rating System. Other financial  institutions
are expected to maintain leverage capital at least 100 to 200 basis points above
the minimum level. Management intends to operate the

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Bank so as to exceed the minimum Tier 1, risk-based and leverage capital ratios.

Bank regulators continue to indicate their desire to raise capital  requirements
applicable  to banking  organizations,  including  a proposal to add an interest
rate risk component to risk-based capital requirements.

The Federal Deposit Insurance  Corporation  Improvement Act of 1991,  enacted in
December 1991  ("FDICIA"),  specifies,  among other things,  the following  five
capital standard categories for depository  institutions:  (i) well capitalized,
(ii)  adequately  capitalized,   (iii)   undercapitalized,   (iv)  significantly
under-capitalized   and  (v)   critically   undercapitalized.   FDICIA   imposes
progressively more restrictive constraints on operations, management and capital
distributions  depending on the category in which an  institution is classified.
Each of the federal banking  agencies has issued final uniform  regulations that
became  effective  December  19, 1992,  which,  among other  things,  define the
capital  levels  described  above.  Under  the  final  regulations,  a  bank  is
considered "well  capitalized" if it (i) has a total risk-based capital ratio of
10% or greater,  (ii) has a Tier 1  risk-based  capital  ratio of 6% or greater,
(iii) has a  leverage  ratio of 5% or  greater,  and (iv) is not  subject to any
order or written directive to meet and maintain a specific capital level for any
capital measure. An "adequately capitalized" bank is defined as one that has (i)
a total  risk-based  capital  ratio of 8% or greater,  (ii) a Tier 1  risk-based
capital ratio of 4% or greater and (iii) a leverage ratio of 4% or greater,  and
an  "undercapitalized"  bank is defined  as one that has (i) a total  risk-based
capital  ratio of less than 8%, (ii) a Tier 1 risk-based  capital  ratio of less
than  4%,  and  (iii) a  leverage  ratio of less  than 4%. A bank is  considered
"significantly  undercapitalized" if the bank has (i) a total risk-based capital
ratio of less than 6%, (ii) a Tier 1 risk-based  capital  ratio of less than 3%,
and (iii) a leverage ratio of less than 3%, and "critically undercapitalized" if
the bank has a ratio of tangible  equity to total  assets  equal to or less than
2%.  The  applicable  federal  regulatory  agency  for  a  bank  that  is  "well
capitalized"   may   reclassify   it   as   an   "adequately   capitalized"   or
"undercapitalized"  institution  and  subject  it  to  the  supervisory  actions
applicable to the next lower capital category, if it determines that the Bank is
in an unsafe or unsound  condition  or deems the bank to be engaged in an unsafe
or unsound practice and not to have corrected the deficiency.

"Undercapitalized"  depository institutions,  among other things, are subject to
growth limitations, are prohibited, with certain exceptions, from making capital
distributions,  are limited in their  ability to obtain  funding  from a Federal
Reserve Bank and are required to submit a capital  restoration plan. The federal
banking agencies may not accept a capital plan without determining,  among other
things, that the plan is based on realistic assumptions and

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is likely to succeed in  restoring  the  depository  institution's  capital.  In
addition,  for a  capital  restoration  plan to be  acceptable,  the  depository
institution's  parent holding company must guarantee that the  institution  will
comply with such capital restoration plan and provide appropriate  assurances of
performance.  If a depository  institution  fails to submit an acceptable  plan,
including  if the  holding  company  refuses or is unable to make the  guarantee
described in the  previous  sentence,  it is treated as if it is  "significantly
undercapitalized".  Failure to submit or  implement an  acceptable  capital plan
also  is  grounds  for  the   appointment   of  a  conservator  or  a  receiver.
"Significantly  undercapitalized"  depository  institutions  may be subject to a
number of additional requirements or restrictions,  including the requirement to
issue additional voting stock to become adequately  capitalized and requirements
to reduce total assets and cessation of receipt of deposits  from  correspondent
banks.  "Critically  undercapitalized"  institutions,  among other  things,  are
prohibited  from making any payments of principal  and interest on  subordinated
debt, and are subject to the appointment of a receiver or conservator.

Under  FDICIA,  the FDIC is  permitted  to provide  financial  assistance  to an
insured bank before  appointment  of a conservator  or receiver only if (i) such
assistance  would be the least  costly  method of meeting  the FDIC's  insurance
obligations,  (ii) grounds for  appointment of a conservator or a receiver exist
or are likely to exist,  (iii) it is unlikely that the bank can meet all capital
standards without  assistance and (iv) the bank's management has been competent,
has complied with applicable laws, regulations, rules and supervisory directives
and has not  engaged  in any  insider  dealing,  speculative  practice  or other
abusive activity.

The Bank is subject to FDIC deposit insurance assessments for the Bank Insurance
Fund ("BIF").  The FDIC has implemented a risk-based  assessment  system whereby
banks are  assessed on a sliding  scale  depending  on their  placement  in nine
separate  supervisory  categories.  Recent legislation provides that BIF insured
institutions,  such as the Bank, will share the Financial  Corporation  ("FICO")
bond service obligation.  Previously,  only Savings  Association  Insurance Fund
("SAIF")  insured  institutions  were  obligated to  contribute to the FICO bond
service.  The BIF deposit  insurance premium for the Bank is presently 2.4 cents
per $100 of BIF insured deposits.

On April  19,  1995,  the  federal  bank  regulatory  agencies  adopted  uniform
revisions to the regulations  promulgated pursuant to the Community Reinvestment
Act (the "CRA"), which are intended to set standards for financial institutions.
The revised regulation contains three evaluation tests: (a) a lending test which
will compare the institution's  market share of loans in low and moderate income
areas to its market share of loans in its entire service area and the percentage
of a bank's outstanding loans to low and

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moderate  income areas or  individuals,  (b) a services test which will evaluate
the  provision of services  that promote the  availability  of credit to low and
moderate  income  areas,  and (c) an  investment  test,  which will  evaluate an
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.
The regulation is designed to reduce the paperwork  requirements  of the current
regulations and provide regulatory agencies,  institutions, and community groups
with a more  objective  and  predictable  manner with which to evaluate  the CRA
performance of financial  institutions.  The rule became effective on January 1,
1996 when evaluation under  streamlined  procedures began for institutions  with
total assets of less than $250 million that are owned by a holding  company with
total assets of less than $1 billion.

Congress  and  various  federal  agencies  (including,  in  addition to the bank
regulatory  agencies,  the  Department  of Housing  and Urban  Development,  the
Federal  Trade  Commission  and the  Department  of Justice  (collectively,  the
"Federal Agencies")  responsible for implementing the nation's fair lending laws
have  been  increasingly  concerned  that  prospective  home  buyers  and  other
borrowers are experiencing  discrimination in their efforts to obtain loans. The
Department  of Justice has filed suit against  financial  institutions  which it
determined had  discriminated,  seeking fines and  restitution for borrowers who
allegedly  suffered from  discriminatory  practices.  Most, if not all, of these
suits have been settled (some for substantial  sums) without a full adjudication
on the merits.

On March 8, 1994, the Federal Agencies, in an effort to clarify what constitutes
discrimination  in lending and to specify the factors the agencies will consider
in  determining  if lending  discrimination  exists,  announced  a joint  policy
statement detailing specific discriminatory practices prohibited under the Equal
Credit Opportunity Act and the Fair Housing Act. In the policy statement,  three
methods of establishing  discrimination  in lending were  identified:  (a) overt
evidence  of  discrimination,   when  a  lender  blatantly  discriminates  on  a
prohibited  basis,  or (b) where  there is no  showing  that the  treatment  was
motivated  by intent to  discriminate  against a  person,  and (c)  evidence  of
disparate impact,  when a lender applies a practice uniformly to all applicants,
but the practice has a discriminatory  effect on a protected  class,  even where
such  practices  are neutral on their face and are applied  equally,  unless the
practice can be justified on the basis of business necessity.

Regulation  of the  Company.  The Company is a bank holding  company  within the
meaning of the Federal Bank Holding Company Act (the "Act") and the Georgia bank
holding company law (the "Georgia Act"). As a bank holding company,  the Company
is required to file

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with  the  Federal  Reserve  Board  (the  "Board")  an  annual  report  and such
additional  information as the Board may require  pursuant to the Act. The Board
may also make  examinations  of the Company and each of its  subsidiaries.  Bank
holding  companies  are  required by the Act to obtain  approval  from the Board
prior to acquiring, directly or indirectly, ownership or control of more than 5%
of the voting shares of a bank.

The Act also prohibits bank holding  companies,  with certain  exceptions,  from
acquiring  more than 5% of the voting  shares of any company  that is not a bank
and from  engaging in any  nonbanking  business  (other than a business  closely
related to banking as determined  by the Board) or from managing or  controlling
banks and other subsidiaries authorized by the Act or furnishing services to, or
performing  services  for, its  subsidiaries  without the prior  approval of the
Board.  The Board is  empowered to  differentiate  between  activities  that are
initiated  de novo by a bank  holding  company or a  subsidiary  and  activities
commenced  by  acquisition  of a  going  concern.  The  Company  has no  present
intention to engage in nonbanking activities.

As a bank holding company, the Company is subject to capital adequacy guidelines
as established by the Board. The Board established risk based capital guidelines
for bank holding companies  effective March 15, 1989.  Beginning on December 31,
1992,  the minimum  required  ratio for total  capital to risk  weighted  assets
became 8 percent (of which at least 4 percent  must  consist of Tier 1 capital).
Tier 1 capital (as defined in regulations  of the Board)  consists of common and
qualifying  preferred  stock  and  minority  interests  in  equity  accounts  of
consolidated subsidiaries, less goodwill and other intangible assets required to
be deducted  under the Board's  guidelines.  The Board's  guidelines  apply on a
consolidated basis to bank holding companies with total  consolidated  assets of
$150 million or more. For bank holding  companies with less than $150 million in
total consolidated assets (such as the Company),  the guidelines will be applied
on a bank only basis,  unless the bank holding  company is engaged in nonbanking
activity  involving  significant  leverage  or has  significant  amount  of debt
outstanding  that is held by the general public.  The Board has stated that risk
based  capital  guidelines  establish  minimum  standards  and that bank holding
companies generally are expected to operate well above the minimum standards.

The  Company is also a bank  holding  company  within the meaning of the Georgia
Act, which provides that,  without the prior written  approval of the DBF, it is
unlawful  (i) for any  bank  holding  company  to  acquire  direct  or  indirect
ownership or control of more than 5% of the voting shares of any bank,  (ii) for
any bank holding  company or subsidiary  thereof,  other than a bank, to acquire
all or substantially  all of the assets of a bank, or (iii) for any bank holding
company to merge or consolidate with any other bank holding company.

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It is also unlawful for any company to acquire  direct or indirect  ownership or
control of more than 5% of the voting shares of any bank in Georgia  unless such
bank has been in existence and continuously  operating or incorporated as a bank
for a period of five years or more prior to the date of  application  to the DBF
for  approval  of  such  acquisition.  Bank  holding  companies  themselves  are
prohibited  from  acquiring  another  bank  until the  initial  bank in the bank
holding company has been incorporated for a period of twenty-four months.

The  Reigle-Neal  Interstate  Banking and Branching  Efficiency Act of 1994 (the
"Interstate Banking Act"),  subject to certain  restrictions,  allows adequately
capitalized and managed bank holding  companies to acquire existing banks across
state lines,  regardless of state statutes that would prohibit  acquisitions  by
out-of-state  institutions.  Further,  effective  June 1, 1997,  a bank  holding
company may consolidate  interstate bank  subsidiaries  into branches and a bank
may merge with an  unaffiliated  bank across  state lines to the extent that the
applicable  states have not "opted out" of  interstate  branching  prior to such
effective date. Some states may elect to permit interstate mergers prior to June
1,  1997.  The  Interstate   Banking  Act  generally   prohibits  an  interstate
acquisition  (other  than  the  initial  entry  into a state  by a bank  holding
company)  that would  result in either  the  control of more than (i) 10% of the
total amount of insured deposits in the United States,  or (ii) 30% of the total
insured  deposits  in the  home  state  of the  target  bank,  unless  such  30%
limitation  is waived by the home state on a basis  which does not  discriminate
against out-of-state institutions.  As a result of this legislation, the Company
may  become a  candidate  for  acquisition  by, or may itself  seek to  acquire,
banking organizations located in other states.

The Reigle  Community  Development  and Regulatory  Improvement Act of 1994 (the
"Improvement  Act")  provides  for  the  creation  of  a  community  development
financial  institutions'  fund to promote economic  revitalization  in community
development.  Banks and thrift  institutions  are allowed to participate in such
community  development  banks.  The Improvement Act also contains (i) provisions
designed to enhance small business capital  formation and to enhance  disclosure
with regard to high cost  mortgages for the  protection  of consumers,  and (ii)
more  than 50  regulatory  relief  provisions  that  apply to banks  and  thrift
institutions,  including the  coordination  of  examinations  by various federal
agencies,  coordination of frequency and types of reports financial institutions
are  required  to file  and  reduction  of  examinations  for  well  capitalized
institutions.

Bank holding companies may be compelled by bank regulatory authorities to invest
additional capital in the event a subsidiary bank experiences either significant
loan losses or rapid growth of loans or deposits.  In addition,  the Company may
be required to provide additional capital to any additional banks it acquires as

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a condition to obtaining the approvals and consents of regulatory authorities in
connection with such acquisitions.

The Company and the Bank are subject to the Federal  Reserve  Act,  Section 23A,
which  limits a bank's  "covered  transactions"  (generally,  any  extension  of
credit) with any single  affiliate  to no more than 10% of a bank's  capital and
surplus.  Covered  transactions  with all affiliates  combined are limited to no
more  than  20%  of a  bank's  capital  and  surplus.  All  covered  and  exempt
transactions  between a bank and its affiliates  must be on terms and conditions
consistent  with  safe  and  sound  banking  practices,   and  a  bank  and  its
subsidiaries  are prohibited  from purchasing low quality assets from the bank's
affiliates.  Finally,  Section 23A requires  that all of a bank's  extensions of
credit to an affiliate be appropriately  secured by collateral.  The Company and
the Bank are also  subject to Section  23B of the  Federal  Reserve  Act,  which
further limits  transactions  among affiliates.  Sections 22(b) and 22(h) of the
Federal Reserve Act and  implementing  regulations  also prohibit  extensions of
credit by a state non-member bank (such as the Bank) to its directors,  officers
and  controlling  shareholders  on terms  which are more  favorable  than  those
afforded  other  borrowers,  and  impose  limits  on the  amounts  of  loans  to
individual affiliates and all affiliates as a group.

The  United  States  Congress  and the  Georgia  General  Assembly  periodically
consider and adopt  legislation  that results in, and could  further  result in,
deregulation,  among other matters,  of banks and other financial  institutions.
Such legislation could modify or eliminate geographic  restrictions on banks and
bank holding  companies and current  prohibitions  restricting  competition with
other  financial  institutions,  including  mutual funds,  securities  brokerage
firms,  insurance  companies,  banks from other  states and  investment  banking
firms.  The effect of any such legislation on the business of the Company or the
Bank cannot be accurately predicted. The Company cannot predict what legislation
might be enacted or what other implementing regulations might be adopted, and if
enacted or adopted, the effect thereof.


Competition

The  banking  business  is highly  competitive.  The Bank  competes  with  other
commercial banks in its primary service area.

Banks generally  compete with other financial  institutions  through the banking
products and  services  offered,  the pricing of services,  the level of service
provided,  the  convenience  and  availability  of  services,  and the degree of
expertise and the personal  manner in which  services are offered.  The Bank has
encountered  strong  competition from most of the financial  institutions in the
Bank's  primary  service  area.  In the conduct of certain  areas of its banking
business, the Bank also competes with credit unions,

                                       11

<PAGE>



consumer finance companies,  insurance companies,  money market mutual funds and
other financial  institutions,  some of which are not subject to the same degree
of regulation and restrictions  imposed upon the Bank. Many of these competitors
have  substantially  greater  resources and lending limits than the Bank has and
offer certain services,  such as trust services,  that the Bank does not provide
presently. Management believes that competitive pricing and personalized service
provides it with a method to compete effectively in the primary service area.

Employees

As of  March  1,  1999,  the Bank had 16  full-time  employees  and 4  part-time
employee.  The Company does not have any employees who are not also employees of
the Bank. The Company and the Bank are not parties to any collective  bargaining
agreement,  and  management  believes  the  Bank  has  good  relations  with its
employees.


ITEM 2.           DESCRIPTION OF PROPERTIES

The Company  acquired a 2.5 acre tract of land located at 150 Covington  Street,
Jackson, Georgia, in January, 1997 for $395,000, as the site for the main office
of the Bank and the Company.  On said tract of land,  the Company  constructed a
two-story main office with  approximately  9,085 square feet of finished  space.
The Bank occupies said  building,  opening for banking  business on September 8,
1997. The main office has five inside teller stations and four outside  drive-up
teller stations. The first floor also has four customer service stations,  eight
enclosed  office spaces (four of which are presently  occupied),  a safe deposit
vault, a coupon room, a children's play room, and three customer  waiting areas.
The second floor of the building is unoccupied and is used for storage space and
future  expansion.  In the  opinion of  management  of the  Company,  the office
building  and  personal  property  of the  Company  and the Bank are  adequately
covered by insurance.

         In addition, one of the primary components of the Bank's loan portfolio
is loans  secured  by first or second  mortgages  on real  estate.  These  loans
generally consist of commercial real estate loans, construction and developments
loans,  and residential real estate loans.  Loan terms are generally  limited to
five years or less,  although  payments are  frequently  structured  on a longer
amortization basis. Interest rates are fixed or adjustable,  and are more likely
to be fixed in the case of shorter  term  loans.  Management  attempts to reduce
credit risk in the  commercial  real estate  portfolio by  emphasizing  loans on
owner-occupied  office  and  retail  buildings  where the  loan-to-value  ratio,
established by  independent  appraisals,  does not exceed 85%. In addition,  the
Bank  typically  requires  personal  guarantees of the  principal  owners of the
property backed with a review by the Bank of the personal  financial  statements
of the principal owners. The principal

                                       12

<PAGE>



economic  risk  associated  with each category of loans,  including  real estate
loans, is the  creditworthiness  of the Bank's  borrowers.  The risks associated
with real estate loans vary with many  economic  factors,  including  employment
levels and  fluctuations  in the value of real estate.  The Bank also originates
residential  real  estate  loans for sale into the  secondary  market.  The Bank
limits interest rate risk and credit risk on these loans by locking the interest
rate for each loan with the  secondary  investor and  receiving  the  investor's
underwriting approval prior to originating the loan.

ITEM 3.           LEGAL PROCEEDINGS

Neither the Company  nor the Bank is a party to any  pending  legal  proceedings
which  management  believes  would have a material  effect  upon  operations  or
financial condition.


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

No matter was  submitted  to a vote of  security  holders  during the  Company's
fourth quarter of the fiscal year ended December 31, 1998.


                                     PART II

ITEM 5.           MARKET FOR ISSUER'S COMMON EQUITY AND RELATED STOCKHOLDER
                  MATTERS

As of December 31, 1998, there were approximately 1050 shareholders of record of
the  Company's  common stock.  There is no  established  trading  market for the
Company's  common  stock.  The Company has  758,458  shares of its common  stock
outstanding  as of  December  31,  1998.  The  Company has not paid and does not
anticipate  paying  dividends on its common stock in the  immediate  future.  At
present,  the only  source of funds from which the Company  could pay  dividends
would  be  dividends  paid  to the  Company  by  the  Bank.  Certain  regulatory
requirements restrict the amount of dividends that can be paid to the Company by
the Bank without  obtaining  the prior  approval of the DBF. No assurance can be
given that dividends will be declared by the Company,  or if declared,  what the
amount of the dividends will be or whether such dividends,  once declared, would
continue.

         The Company  completed its initial  stock  offering as of July 7, 1997.
758,458  shares were sold in the offering,  raising total capital of $7,584,580.
From the  capital  raised,  the  Company  paid part of the  organizational  debt
incurred  by the  organizers,  as well as the $50,000  originally  loaned to the
Company  by the  organizers.  This debt  repayment  represented  the  payment of
$37,474  of stock  offering  expenses,  $18,559  of  organization  costs for the
Company, and $73,016 of pre-opening operating expenses allocated to the

                                       13

<PAGE>



Company. In addition,  the Company capitalized the Bank in September,  1997 with
$6,500,000  in return for 650,000  shares of common stock of the Bank,  which is
all of the Bank's outstanding stock.

         The Bank  expended  a portion  of its  capital  to repay in effect  the
remainder  of the  organizational  debt and advances by the Company on behalf of
the Bank prior to September,  1997. This debt and advances repayment represented
the payment of $53,000 of organizational  expenses of the Bank, $405,265 for the
purchase of the site for the bank building,  $1,194,966 for  construction of the
bank building on the site, $271,366 for the purchase of equipment,  and $153,036
of  pre-opening  operating  expenses  allocated  to the Bank.  Since  opening in
September,  1997,  the Bank has used the  remainder of its capital in its normal
banking operations.

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

Information  relating to  Management's  Discussion  and  Analysis  of  Financial
Condition  and  Results  of  Operations  appears  on pages 37  through 56 of the
Company's 1998 Annual Report to  Shareholders,  and is incorporated by reference
in this Form 10-KSB Annual Report.

ITEM 7.           FINANCIAL STATEMENTS

The consolidated  financial statements,  notes thereto and independent auditors'
report  thereon,  dated  February 11,  1999,  appearing on pages 5 through 35 of
Company's 1998 Annual Report to  Shareholders,  are incorporated by reference in
this Form 10-KSB Annual Report.

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

There  are  no  disagreements  with  accountants  on  accounting  and  financial
disclosure.


                                    PART III

ITEM 9.           DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

The information  concerning  directors and executive officers is presented under
Identification  of Directors  and  Executive  Officers on pages 3 through 6, and
under  Non-Director  Executive  Officers  of the  Bank on  page 7, of the  Proxy
Statement for Annual Meeting of  Shareholders,  to be held April 22, 1999, which
information is incorporated  by reference in this Form 10-KSB Annual Report.  In
addition,  the  information  concerning  compliance  with  Section  16(a) of the
Exchange Act shown under  Filings  under  Section 16(a) on page 13 of said Proxy
Statement is incorporated by reference in this Form 10-KSB Annual Report.

                                       14

<PAGE>



ITEM 10.          EXECUTIVE COMPENSATION

Executive  Compensation  is shown under  Compensation of Directors and Executive
Officers  on pages 7 through 10 of the Proxy  Statement  for  Annual  Meeting of
Shareholders,  to be held Apri 22, 1999,  which is  incorporated by reference in
this Form 10-KSB Annual Report.

ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT

Stock Ownership of Certain Beneficial Owners which appears on pages 12 and 13 of
the Proxy  Statement for Annual  Meeting of  Shareholders,  to be held April 22,
1999, is incorporated by reference in this Form 10-KSB Annual Report.

Security Ownership of Directors, Nominees, Executive Officers, and Directors and
Executive  Officers  as a group,  which  appears on pages 11 and 12 of the Proxy
Statement  for Annual  Meeting of  Shareholders,  to be held April 22, 1999,  is
incorporated by reference in this Form 10-KSB Annual Report.

ITEM 12.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions with Management which appears on page 10 of the Proxy Statement for
Annual Meeting of  Shareholders,  to be held April 22, 1999, is  incorporated by
reference in this Form 10-KSB Annual Report.


ITEM 13.          EXHIBITS AND REPORTS ON FORM 8-K

(a)      1.       Financial Statements

         The consolidated financial statements of the Company, notes thereto and
         independent auditors' report thereon,  incorporated herein by reference
         from  pages  5  through  35 of the  Company's  1998  Annual  Report  to
         Shareholders,  have been filed as Item 7 in Part II of this  report and
         are attached hereto as Exhibit 13.1.



                                       15

<PAGE>



         2.       Exhibits

         Exhibit Numbers

                                                                    Sequential
                                                                    Page Number

         3.1*         Articles of Incorporation                         --
         3.2*         Bylaws                                            --
         10.1*+       Employment Contract between John L.
                      Coleman and the Company                           --
         10.2         Stock Option Agreement between the
                      Company and John L. Coleman                       19
         13.1         Consolidated Financial Statements of
                      the Company                                       23
         13.2         Management's Discussion and Analysis
                      of Financial Condition and Results of
                      Operations                                        53
         21.1         Subsidiaries of the Company.  The
                      sole subsidiary of the Company is
                      First Georgia Community Bank,
                      Jackson, Georgia, which is
                      wholly-owned by the Company.                      --
         27.1         Financial Data Schedule                           73

------------------------
                  *Items 3.1 through  10.1,  as listed  above,  were  previously
                  filed by the  Company as  Exhibits  (with the same  respective
                  Exhibit   Numbers  as  indicated   herein)  to  the  Company's
                  Registration Statement  (Registration No. 333- 13583) and such
                  documents are incorporated herein by reference.

                  +Item 10.1 is an employment-compensatory agreement.


(b)      Reports on Form 8-K

         No Reports on Form 8-K have been filed during the fourth quarter of the
         year ended December 31, 1998.



                                       16

<PAGE>



                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this Report to be signed on its
behalf by the undersigned, thereunto duly authorized on March 29, 1999.


FIRST GEORGIA COMMUNITY CORP.



By:      s/John L. Coleman
         John L. Coleman
         President and C.E.O.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities indicated on March 29, 1999.

         Signature                                            Title


s/John L. Coleman                                 Director; President and C.E.O.
John L. Coleman


s/D. Richard Ballard                              Director
D. Richard Ballard


s/Charles W. Carter                               Director
Charles W. Carter


s/Alfred D.Fears                                  Director
Alfred D. Fears


_________________________                         Director
William B. Jones


s/Harry Lewis                                     Director; Secretary-Treasurer
Harry Lewis                                       and C.F.O./C.A.O.


_________________________                         Director
Joey McClelland

                       [SIGNATURES CONTINUED ON NEXT PAGE]

                                       17

<PAGE>



s/Dr. Alexander Pollack                           Director
Dr. Alexander Pollack


s/Robert Ryan                                     Director
Robert Ryan


s/James H. Warren                                 Director
James H. Warren


s/George L. Weaver                                Director
George L. Weaver



Supplemental Information to be Furnished With Reports Filed
Pursuant to Section 15(d) of the Exchange Act by Non-reporting
Issuers:

         Not Applicable.




                                       18

<PAGE>



                                                                   EXHIBIT 10.2

                       NONQUALIFIED STOCK OPTION AGREEMENT



         THIS  AGREEMENT  is made as of the  8th day of  September,  1997 by and
between JOHN L. COLEMAN  (hereinafter  "Employee")  and FIRST GEORGIA  COMMUNITY
CORP.(hereinafter "FGCC").

         WHEREAS,  Employee is a senior officer of First Georgia Community Bank,
the sole subsidiary of FGCC,(the "Employer" as the case may be) and FGCC desires
to encourage and enable the  acquisition of a financial  interest in FGCC by its
senior officers  through options to purchase stock, as approved by the Directors
of FGCC on April 21, 1998 and to be approved  by the  Shareholders  on April 23,
1998 (hereinafter the "Plan").

         NOW, THEREFORE, in consideration of the premises, it is agreed:

         1.       Grant of Options and Time of Exercise.

         (a) FGCC hereby  grants to Employee the right,  privilege and option to
purchase,  subject to the limitations herein set forth, a total of 15,000 shares
(the "Total  Shares") of the common stock of FGCC until  September  8, 2007,  at
which time this option shall  expire.  The stock options  granted  hereunder are
intended to be nonqualified stock options not qualified under Section 422 of the
Internal Revenue Code.

         (b) Employee may exercise the option to purchase as to the Total Shares
at any time  before the  termination  of this  option  agreement  as provided in
Paragraph 4 hereof.

         (c)  Employee  acknowledges  and  agrees  that  he has  been  furnished
information   concerning  the  differences  in  the  tax  consequences   between
"incentive stock options" and nonqualified stock options and that he understands
the tax effect of a nonqualified stock option.

         2.  Purchase  Price.  During the initial three (3) years of the term of
this  agreement,  the purchase price of the shares shall be the lesser of $10.00
per  share  or book  value  per  share  as of the end of the  month  immediately
preceding the date of exercise.  Beginning September 8, 2000, the purchase price
of the  shares  shall be the book  value  per  share as of the end of the  month
immediately preceding the date of exercise.  The purchase price shall be paid in
full: (a) in cash or (b) by exchanging for the FGCC shares purchased pursuant to
the exercise of this option  previously  owned FGCC shares of  equivalent  value
which were acquired other than through the exercise of stock options or (c) by a
combination of

                                       19

<PAGE>



the types of consideration permitted under (a), (b) or (c).  Notwithstanding the
foregoing,  the  purchase  price may be subject to  adjustment  as  provided  in
Paragraph 5 hereof.

         3. Method of Exercise.  The option  granted above shall be exercised by
written notice  directed to the Board of Directors of FGCC, at FGCC's  principal
place of business, accompanied by a check in payment of the option price for the
number of shares  specified  and paid for. If  previously  owned FGCC shares are
being used as all or any portion of the payment, the stock certificates for such
shares shall be tendered,  duly  endorsed for transfer to FGCC.  FGCC shall make
delivery of such shares  purchased as soon as is  practicable,  provided that if
any law or  regulation  requires  FGCC to take any  action  with  respect to the
shares  specified in such notice before the issuance  thereof,  then the date of
delivery of such shares shall be extended for the period  necessary to take such
action.

         4.  Termination  of Options.  Except as  provided  in  Paragraph 8 or 9
hereof,  the option granted hereunder shall terminate upon the first to occur of
the following dates:

         (a) The  expiration  of 3 months  after  the  date on which  Employee's
employment terminates, other than by reason of permanent and total disability or
death of Employee or other than for cause by Employer;

         (b)  Immediately,  upon the  termination  or  severance  of Employee by
Employer for cause,  or upon notice to Employee to terminate or sever for cause,
if earlier;

         (c) The expiration of twelve months after the date on which  Employee's
employment by FGCC is terminated, if such termination is by reason of Employee's
permanent and total disability;

         (d) In the event of Employee's  death while in the employ of FGCC,  his
executors or administrators  may exercise,  within six months following the date
of his  death,  the option as to any of the shares  subject to  exercise  of the
option at Employee's death to the extent not exercised prior to his death;

         (e) The date shown in subparagraph 1(a) hereof.

         5. Reclassification, Consolidation, or Merger. If and to the extent the
number of issued shares of common stock of FGCC shall be increased or reduced by
change in par  value,  split up,  reclassification,  distribution  of a dividend
payable in stock,  or the like,  the number of shares  subject to option and the
option price per share shall be proportionately adjusted. If FGCC is reorganized
or consolidated or merged with another  corporation,  Employee shall be entitled
to receive options covering shares of such reorganized,  consolidated, or merged
company in the same

                                       20

<PAGE>



proportion,  at an equivalent  price,  and subject to the same  conditions.  For
purposes of the  preceding  sentence,  the excess of the  aggregate  fair market
value of the shares subject to the option immediately after the  reorganization,
consolidation,  or merger over the  aggregate  option price of such shares shall
not be more than the excess of the  aggregate  fair  market  value of all shares
subject to the option immediately before such reorganization,  consolidation, or
merger over the  aggregate  option price of such  shares,  and the new option or
assumption of the old option shall not give Employee  additional  benefits which
he did not have under the old option,  or deprive  him of benefits  which he had
under the old option.

         6.  Administration.  The Board of Directors of FGCC is responsible  for
administering   the  rights  and  obligations  of  FGCC  under  this  agreement.
Notwithstanding anything to the contrary contained herein,  references herein to
the Board of  Directors  of FGCC shall be deemed to refer to the  members of the
Board of Directors of the Company who are disinterested persons", as hereinafter
defined.  The term  "disinterested  person" as used  herein  shall have the same
meaning  as  said  term  has in Rule  16b-3(c)  (2) (i)  promulgated  under  the
Securities Exchange Act of 1934, as amended, as such rule is amended or modified
from time to time.

         7. Rights Prior to Exercise of Option. This option is non-transferrable
by  Employee  except in the event of his death as  provided  in  Paragraph 4 (d)
above, and during his lifetime is exercisable  only by him.  Employee shall have
no rights as a stockholder  with respect to the optioned shares until payment of
the option price and delivery to him of such shares as herein provided.

         8.  Restrictions  on  Disposition  of Stock.  All  shares  acquired  by
Employee pursuant to this Agreement shall be subject to all restrictions on sale
generally  applicable  to common  shares of FGCC,  if any. All shares  issued to
Employee  under  this  Agreement  shall  contain  a legend on the  reverse  side
containing such  restrictions as may be required in connection with the transfer
of such shares under State or Federal law, or under the Bylaws of FGCC.

         9. Binding Effect.  This Agreement shall inure to the benefit of and be
binding  upon  the  parties  hereto  and  their  respective  heirs,   executors,
administrators, successors and assigns.

         10. Conditions to Agreement.  Notwithstanding  anything to the contrary
contained   herein,   this  Agreement  shall  be  subject  to  approval  by  the
shareholders of FGCC at the shareholders meeting to be held on April 23, 1998.


                                       21

<PAGE>
         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.


                                              EMPLOYEE:


                                              s/John L. Colman          (SEAL)
                                              JOHN L. COLEMAN



                                              EMPLOYER:

                                              FIRST GEORGIA COMMUNITY CORP.


                                              By: s/George L. Weaver
                                                  Title: Chairman


                                              Attest: s/Harry Lewis
                                                      Title: Secretary


                                       22

<PAGE>
                                                                    EXHIBIT 13.1
                     FIRST GEORGIA COMMUNITY CORP.
                            AND SUBSIDIARY

                     CONSOLIDATED FINANCIAL REPORT

                           DECEMBER 31, 1998












                                       23
<PAGE>


                          FIRST GEORGIA COMMUNITY CORP.
                                 AND SUBSIDIARY

                          CONSOLIDATED FINANCIAL REPORT
                                DECEMBER 31, 1998

-------------------------------------------------------------------------------

                                TABLE OF CONTENTS


                                                                          Page

INDEPENDENT AUDITOR'S REPORT.................................................1

FINANCIAL STATEMENTS

     Consolidated balance sheets.............................................2
     Consolidated statements of operations...................................3
     Consolidated statements of comprehensive loss...........................4
     Consolidated statements of stockholders' equity (deficit)...............5
     Consolidated statements of cash flows.............................6 and 7
     Notes to consolidated financial statements...........................8-28



                                       24
<PAGE>











                          INDEPENDENT AUDITOR'S REPORT

-------------------------------------------------------------------------------


To the Board of Directors
First Georgia Community Corp. and Subsidiary
Jackson, Georgia


                  We have audited the accompanying  consolidated  balance sheets
of First  Georgia  Community  Corp.  and  subsidiary as of December 31, 1998 and
1997, and the related consolidated statements of operations, comprehensive loss,
stockholders'  equity (deficit),  and cash flows for the years then ended. These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.


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


                  In our opinion, the consolidated financial statements referred
to above present fairly,  in all material  respects,  the financial  position of
First Georgia  Community  Corp. and subsidiary as of December 31, 1998 and 1997,
and the  results  of their  operations  and their  cash flows for the years then
ended, in conformity with generally accepted accounting principles.


                  As  described  in  Note  1  to  the   consolidated   financial
statements, the Company changed its method of accounting for organization costs.

                                                     /s/ MAULDIN & JENKINS, LLC




Atlanta, Georgia
February 11, 1999


                                       25
<PAGE>
                          FIRST GEORGIA COMMUNITY CORP.
                                 AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 1998 AND 1997

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------
<S>                                    <C>                   <C>
    Assets                                   1998                      1997
                                       -------------------    -----------------

Cash and due from banks                $          675,969     $        1,568,017
Federal funds sold                              3,410,000              4,320,000
Securities available-for-sale                   5,565,028              2,029,491
Loans held for sale                               251,605                      0

Loans                                          24,314,616              6,117,022
Less allowance for loan losses                    433,882                 72,000
                                      -------------------    -------------------
          Loans, net                           23,880,734              6,045,022

Premises and equipment                          2,242,202              2,220,331
Other assets                                      325,287                150,849
                                      -------------------    -------------------

          Total assets                $        36,350,825     $       16,333,710
                                      ===================    ===================

  Liabilities and Stockholders' Equity

Deposits
    Noninterest-bearing demand         $        4,496,294     $        3,510,170
    Interest-bearing demand                    11,434,152              3,150,132
    Savings                                       901,040                303,658
    Time, $100,000 and over                     4,321,355                400,000
    Other time                                  8,169,062              1,801,130
                                      -------------------    -------------------
           Total deposits                      29,321,903              9,165,090
    Other borrowings                               22,241                 29,397
    Other liabilities                             136,879                 25,562
                                      -------------------    -------------------
          Total liabilities                    29,481,023              9,220,049
                                      -------------------    -------------------

Commitments and contingent liabilities

Stockholders' equity
    Common stock, par value $5; 10,000,000
        shares authorized; 758,458 issued
        and outstanding                         3,792,290              3,792,290
    Capital surplus                             3,754,816              3,754,816
    Accumulated deficit                         (675,728)              (432,986)
    Accumulated other comprehensive loss          (1,576)                  (459)
                                      -------------------    -------------------

   Total stockholders' equity                   6,869,802              7,113,661
                                      -------------------    -------------------

  Total liabilities and stockholders'
    equity                             $       36,350,825     $       16,333,710
                                      ===================    ===================

See Notes to Consolidated Financial Statements.
</TABLE>

                                       26
<PAGE>
                          FIRST GEORGIA COMMUNITY CORP.
                                 AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------
<S>                                      <C>                  <C>
                                                1998                1997
                                          ----------------    ------------------
Interest income                                                                 
    Loans                                 $       1,641,616    $         120,064
    Taxable securities                              219,451                8,727
    Federal funds sold                              210,458              255,057
                                         ------------------   ------------------
          Total interest income                   2,071,525              383,848
                                         ------------------   ------------------

Interest expense
    Deposits                                        779,294               46,030
    Other borrowings                                  1,256                6,993
                                         ------------------   ------------------
          Total interest expense                    780,550               53,023
                                         ------------------   ------------------

          Net interest income                     1,290,975              330,825
Provision for loan losses                           385,000               72,000
                                         ------------------   ------------------
          Net interest income
              after provision
              for loan losses                       905,975              258,825
                                         ------------------   ------------------

Other income
  Service charges on deposit accounts               121,660               18,980
   Other operating income                            71,210               11,951
                                         ------------------   ------------------
          Total other income                        192,870               30,931
                                         ------------------   ------------------

Other expenses
    Salaries and employee benefits                  633,339              350,175
    Equipment and occupancy expenses                189,300               70,618
    Other operating expenses                        453,619              207,161
                                         ------------------   ------------------
          Total other expenses                    1,276,258              627,954
                                         ------------------   ------------------

          Loss before income taxes
             and cumulative effect of
             a change in accounting
             principle                            (177,413)            (338,198)

Income tax expense                                        0                    0
                                         ------------------   ------------------
   Loss before cumulative effect of
   a change in accounting principle               (177,413)            (338,198)

Cumulative effect of a change in
 accounting principle                              (65,329)                    0
                                         ------------------   ------------------

        Net loss                         $        (242,742)   $        (338,198)
                                         ==================   ==================

Basic and diluted losses per common
share before cumulative effect of
a change in accounting principle         $           (0.23)   $           (0.92)

Cumulative effect of a change in
accounting principle                                 (0.09)                   -
                                         ------------------   ------------------

Basic and diluted losses per
 common share                            $           (0.32)   $           (0.92)
                                         ==================   ==================

See Notes to Consolidated Financial Statements.
</TABLE>

                                       27
<PAGE>
                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
                     YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
<S>                                          <C>               <C>
                                                    1998             1997
                                              ----------------  ----------------

Net loss                                      $      (242,742)  $      (338,198)

 Unrealized holding losses on securities
 available-for-sale arising during period              (1,117)             (459)
                                              ----------------  ----------------

Comprehensive loss                            $      (243,859)  $      (338,657)
                                              ================  ================


See Notes to Consolidated Financial Statements.
</TABLE>



                                       28
<PAGE>
                          FIRST GEORGIA COMMUNITY CORP.
                                 AND SUBSIDIARY

            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                     YEARS ENDED DECEMBER 31, 1998 AND 1997

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                          Accumulated
                                                                                              Other          Total
                                   Common Stock          Capital         Accumulated      Comprehensive   Stockholders'
                           -------------------------
                           Shares       Par Value        Surplus           Deficit             Loss       Equity (Deficit)
                           --------  ---------------   --------------    -------------    ------------    ----------------
<S>                        <C>       <C>                <C>             <C>              <C>             <C>               
Balance, December 31, 
  1996                           1     $           5     $           5     $    (94,788)    $         0     $     (94,778)
    Net loss                     0                 0                 0         (338,198)              0          (338,198)
    Redemption of common
     stock                      (1)               (5)               (5)               0               0               (10)
    Issuance of common
     stock                 758,458         3,792,290         3,792,290                0               0         7,584,580
    Stock issue costs            0                 0           (37,474)               0               0           (37,474)
    Other comprehensive
    loss                         0                 0                 0                0            (459)             (459)
                           --------    -------------    --------------    -------------    ------------    --------------
Balance, December 31,
  1997                     758,458         3,792,290         3,754,816         (432,986)           (459)         7,113,661
    Net loss                     0                 0                 0         (242,742)              0           (242,742)
    Other comprehensive 
    loss                         0                 0                 0                0          (1,117)            (1,117)
                           --------    -------------    --------------    -------------    ------------    ----------------
Balance, December 31,
  1998                     758,458     $   3,792,290    $    3,754,816     $   (675,728)    $    (1,576)    $    6,869,802
                           ========    =============    ==============    ==============    ============    ==============

See Notes to Consolidated Financial Statements.
</TABLE>

                                       29
<PAGE>
                          FIRST GEORGIA COMMUNITY CORP.
                                 AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 1998 AND 1997

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------
<S>                                 <C>                     <C>
                                              1998                 1997
                                     --------------------   --------------------
OPERATING ACTIVITIES
    Net loss                         $          (242,742)   $          (338,198)
    Adjustments to reconcile net
    loss to net cash used in operating
    activities:
    Depreciation                                 105,662                 29,191
    Write-off/amortization of
       organization costs                         65,329                  6,230
    Net increase in loans held
       for sale                                 (251,605)                     0
    Provision for loan losses                    385,000                 72,000
    Increase in interest receivable             (205,148)               (50,686)
    Increase in interest payable                  63,339                 16,905
    Other operating activities                    13,359                (16,279)
                                    --------------------    --------------------

    Net cash used in
    operating activities                         (66,806)              (280,837)
                                   ---------------------    --------------------

INVESTING ACTIVITIES
    Purchases of securities
    available-for-sale                        (5,538,533)            (2,029,950)
    Proceeds from sale of
    securities available-for-sale                500,000                      0
    Proceeds from maturities of
    securities available-for-sale              1,501,879                      0
    Net (increase) decrease in
    Federal funds sold                           910,000             (4,320,000)
    Net increase in loans                    (18,220,712)            (6,117,022)
    Purchase of premises and equipment          (127,533)            (2,052,844)
                                      -------------------    -------------------

    Net cash used in investing
    activities                               (20,974,899)           (14,519,816)
                                      -------------------    -------------------

FINANCING ACTIVITIES
    Net increase in deposits                  20,156,813              9,165,090
    Repayment of other borrowings                 (7,156)              (366,960)
    Net proceeds from sale of
    common stock                                       0              7,104,443
                                      -------------------    -------------------

Net cash provided by
financing activities                          20,149,657             15,902,573
                                      -------------------    -------------------

Net increase (decrease) in
cash and due from banks                         (892,048)             1,101,920

Cash and due from banks
at beginning  of year                          1,568,017                466,097
                                      -------------------    -------------------

Cash and due from banks
at end of year                        $          675,969     $        1,568,017
                                      ===================    ===================
</TABLE>

                                       30
<PAGE>
                          FIRST GEORGIA COMMUNITY CORP.
                                 AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 1998 AND 1997

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------
<S>                                          <C>                 <C>
                                                   1998               1997
                                             -----------------   ---------------

SUPPLEMENTAL DISCLOSURES
    Cash paid for:
        Interest                             $        717,211     $       36,118

        Income taxes                         $              0     $          110

NONCASH TRANSACTIONS
    Unrealized losses on securities
    available-for-sale                       $          1,117     $          459

    Finance of premises and equipment
    purchases                                $              0     $       30,557

See Notes to Consolidated Financial Statements.
</TABLE>

                                       31
<PAGE>
                          FIRST GEORGIA COMMUNITY CORP.
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



--------------------------------------------------------------------------------



NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

                  Nature of Business

                     First  Georgia  Community  Corp.  (the  Company)  is a bank
                     holding   company  whose   business  is  conducted  by  its
                     wholly-owned subsidiary,  First Georgia Community Bank (the
                     Bank).  The Bank is a  commercial  bank located in Jackson,
                     Butts  County,  Georgia.  The Bank provides a full range of
                     banking services in its primary market area of Butts County
                     and  the  surrounding  counties.  The  Bank  commenced  its
                     operations on September 8, 1997.

                  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  and
                     disclosures  of contingent  assets and  liabilities  at the
                     date  of the  consolidated  financial  statements  and  the
                     reported  amounts  of  revenues  and  expenses  during  the
                     reporting  period.  Actual  results could differ from those
                     estimates.

                  Cash and Due From Banks

                     Cash on hand,  cash  items in process  of  collection,  and
                     amounts  due from banks are  included  in cash and due from
                     banks.

                     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.

                  Securities

                     Securities are classified  based on management's  intention
                     on the date of purchase.  Securities  which  management has
                     the  intent  and  ability  to hold  to  maturity  would  be
                     classified  as  held-to-maturity  and reported at amortized
                     cost.   All  other  debt   securities   are  classified  as
                     available-for-sale  and  carried  at fair  value  with  net
                     unrealized  gains  and  losses  included  in  stockholders'
                     equity.  Equity securities  without a readily  determinable
                     fair value are  included in  securities  available-for-sale
                     and carried at cost.

                     Interest   and   dividends   on    securities,    including
                     amortization  of premiums and accretion of  discounts,  are
                     included in interest income. Realized gains and losses from
                     the sale of securities  are  determined  using the specific
                     identification method.

                                       32
<PAGE>





                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



--------------------------------------------------------------------------------



NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

                  Loans Held for Sale

                     Loans  held for sale  consist  of  mortgage  loans  and are
                     carried at the lower of aggregate cost or fair value. These
                     loans are sold to  investors  who  purchase  the loans with
                     "locked in" interest  rates agreed to by the  investors and
                     the  Company  prior  to  funding,   thereby   reducing  the
                     Company's exposure to interest rate risk.

                  Loans

                     Loans are carried at their  principal  amounts  outstanding
                     less  deferred loan fees and the allowance for loan losses.
                     Interest income on loans is credited to income based on the
                     principal amount outstanding.

                     Loan  origination  fees and  certain  direct  costs of most
                     loans  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 loan  fees and  costs  in  accordance  with
                     generally accepted accounting principles.

                     The allowance for loan losses is maintained at a level that
                     management  believes  to be  adequate  to absorb  potential
                     losses in the loan portfolio. Management's determination of
                     the adequacy of the  allowance is based on an evaluation of
                     the portfolio, past loan loss experience,  current economic
                     conditions,   volume,  growth,   composition  of  the  loan
                     portfolio, and other risks inherent in the portfolio.  This
                     evaluation is inherently subjective as it requires material
                     estimates  that  are  susceptible  to  significant   change
                     including  the  amounts  and  timing of future  cash  flows
                     expected to be received on  impaired  loans.  In  addition,
                     regulatory   agencies,   as  an  integral   part  of  their
                     examination process, will periodically review the Company's
                     allowance  for loan losses,  and may require the Company to
                     record  additions to the allowance  based on their judgment
                     about  information  available  to them at the time of their
                     examinations.

                     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.  When  accrual of interest is
                     discontinued,  all unpaid  accrued  interest  is  reversed.
                     Interest  income  is  subsequently  recognized  only to the
                     extent cash payments are received.

                                       33
<PAGE>





                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



--------------------------------------------------------------------------------



NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

                  Loans (Continued)

                     A loan is considered to be impaired when it is probable the
                     Company  will  be  unable  to  collect  all  principal  and
                     interest  payments due in accordance  with the terms of the
                     loan agreement.  Individually identified impaired loans are
                     measured based on the present value of payments expected to
                     be  received,  using  the  contractual  loan  rate  as  the
                     discount rate.  Alternatively,  measurement may be based on
                     observable  market  prices  or,  for loans  that are solely
                     dependent on the collateral for repayment,  measurement may
                     be  based  on the  fair  value  of the  collateral.  If the
                     recorded  investment  in  the  impaired  loan  exceeds  the
                     measure of fair value, a valuation allowance is established
                     as a component of the allowance for loan losses. Changes to
                     the valuation  allowance are recorded as a component of the
                     provision for loan losses.

                  Premises and Equipment

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

                  Income Taxes

                     Income tax expense  consists of current and deferred taxes.
                     Current income tax provisions  approximate taxes to be paid
                     or refunded for the applicable  year.  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
                     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.

                     Recognition  of deferred tax balance sheet amounts is based
                     on management's belief that it is more likely than not that
                     the  tax  benefit   associated   with   certain   temporary
                     differences,  tax  operating  loss  carryforwards  and  tax
                     credits will be realized. A valuation allowance is recorded
                     for those  deferred  tax items for which it is more  likely
                     than not that realization will not occur in the near term.

                     The  Company  and the Bank file a  consolidated  income tax
                     return.  Each entity provides for income taxes based on its
                     contribution to income taxes (benefits) of the consolidated
                     group.

                                       34
<PAGE>





                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



--------------------------------------------------------------------------------



NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

                  Losses Per Common Share

                     Basic  losses per common share are computed by dividing net
                     loss by the  weighted  average  number  of shares of common
                     stock outstanding. Diluted losses per share are computed by
                     dividing net loss by the sum of the weighted-average number
                     of shares of common stock  outstanding and potential common
                     shares. Potential common shares consist of stock options.

                  Cumulative Effect of a Change in Accounting Principle

                     In  April  of  1998,  the  Accounting  Standards  Executive
                     Committee   issued  Statement  of  Position  ("SOP")  98-5,
                     "Reporting on the Costs of Start Up  Activities".  SOP 98-5
                     requires that costs of start-up activities and organization
                     costs be expensed as incurred.  SOP 98-5 becomes  effective
                     for financial  statements for fiscal years  beginning after
                     December 15, 1998.  However,  early  adoption is encouraged
                     for fiscal  years in which  financial  statements  have not
                     been issued.  During 1998, the Company wrote off $65,329 of
                     unamortized  organization  costs upon adoption of SOP 98-5.
                     Prior  to  the  adoption  of  SOP  98-5,  the  Company  was
                     amortizing these costs over a five year period.

                  Comprehensive Income

                     In  1998,  the  Company  adopted   Statement  of  Financial
                     Standards  ("SFAS")  No.  130,   "Reporting   Comprehensive
                     Income". This statement establishes standards for reporting
                     and display of  comprehensive  income and its components in
                     the financial statements.  This statement requires that all
                     items that are required to be recognized  under  accounting
                     standards as components of comprehensive income be reported
                     in  a  financial  statement  that  is  displayed  in  equal
                     prominence with the other financial statements. The Company
                     has  elected  to report  comprehensive  loss in a  separate
                     financial  statement  titled  "Consolidated  Statements  of
                     Comprehensive  Loss". SFAS No. 130 describes  comprehensive
                     income  as the  total of all  components  of  comprehensive
                     income  including  net income.  This  statement  uses other
                     comprehensive income to refer to revenues,  expenses, gains
                     and  losses  that  under  generally   accepted   accounting
                     principles  are  included  in   comprehensive   income  but
                     excluded from net income.  Currently,  the Company's  other
                     comprehensive  loss consists of items  previously  reported
                     directly  in equity  under SFAS No.  115,  "Accounting  for
                     Certain  Investments  in Debt and  Equity  Securities".  As
                     required by SFAS No. 130, the financial  statements for the
                     prior year have been reclassified to reflect application of
                     the  provisions  of this  statement.  The  adoption of this
                     statement did not affect the Company's  financial position,
                     results of operations or cash flows.

                                       35
<PAGE>





                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



--------------------------------------------------------------------------------


NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

                  Reclassifications

                     Certain items of income in the statement of operations  for
                     the year ended  December  31, 1997 have been  reclassified,
                     with no  effect  on net  loss,  to be  consistent  with the
                     classifications for the year ended December 31, 1998.

                  Recent Accounting Pronouncements

                     In June 1998,  the  Financial  Accounting  Standards  Board
                     issued SFAS No. 133, "Accounting for Derivative Instruments
                     and Hedging  Activities".  This statement is required to be
                     adopted for fiscal  years  beginning  after June 15,  1999.
                     However,  the statement  permits  early  adoption as of the
                     beginning of any fiscal  quarter  after its  issuance.  The
                     Company expects to adopt this statement  effective  January
                     1, 2000. SFAS No. 133 requires the Company to recognize all
                     derivatives  as either assets or liabilities in the balance
                     sheet  at  fair  value.   For  derivatives   that  are  not
                     designated  as hedges,  the gain or loss must be recognized
                     in earnings in the period of change.  For derivatives  that
                     are designated as hedges,  changes in the fair value of the
                     hedged assets,  liabilities,  or firm  commitments  must be
                     recognized in earnings or recognized in other comprehensive
                     income  until the hedged item is  recognized  in  earnings,
                     depending  on the  nature  of the  hedge.  The  ineffective
                     portion  of a  derivative's  change in fair  value  must be
                     recognized in earnings immediately.  Management has not yet
                     determined  what  effect the  adoption of SFAS No. 133 will
                     have on the Company's earnings or financial position.

NOTE 2.  SECURITIES

                  The amortized cost and fair value of securities are summarized
as follows:
<TABLE>
<CAPTION>
<S>                                 <C>               <C>            <C>             <C>           
                                                         Gross           Gross
                                       Amortized       Unrealized      Unrealized          Fair
                                         Cost            Gains           Losses           Value
                                     --------------   -------------   -------------   ---------------
Securities Available-for-Sale
December 31, 1998:

U. S. Government and agency          $   5,517,604    $      3,840    $    (5,416)    $    5,516,028
securities
Equity securities                           49,000               -               -            49,000
                                     --------------   -------------   -------------   ---------------
                                     $   5,566,604    $      3,840    $    (5,416)    $    5,565,028
                                     ==============   =============   =============   ===============

Securities Available-for-Sale
December 31, 1997:

U. S. Government and agency
securities                           $   1,999,250    $        625    $    (1,084)    $    1,998,791
Equity securities                           30,700               -               -            30,700
                                     --------------   -------------   -------------   ---------------
                                     $   2,029,950    $        625    $    (1,084)    $    2,029,491
                                     ==============   =============   =============   ===============
</TABLE>


                                       36
<PAGE>
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


--------------------------------------------------------------------------------



NOTE 2.  SECURITIES (Continued)

                  The amortized cost and fair value of securities as of December
31, 1998 by contractual maturity are shown below.
<TABLE>
<CAPTION>

                                          Securities Available-for-Sale
                                         ----------------------------------
                                            Amortized            Fair
                                               Cost              Value
                                         ---------------   ----------------
<S>                                      <C>               <C>
Due in one year or less                  $      507,859    $       507,750
Due from one year to five years               5,009,745          5,008,278
Equity securities                                49,000             49,000
                                        ---------------   ----------------
                                         $    5,566,604    $     5,565,028
                                        ===============   ================
</TABLE>

                  Securities with a carrying value of $3,061,000 at December 31,
                  1998 were  pledged  to secure  public  deposits  and for other
                  purposes.  There were no securities pledged as of December 31,
                  1997.


NOTE 3.  LOANS AND ALLOWANCE FOR LOAN LOSSES

                  The composition of loans is summarized as follows:
<TABLE>
<CAPTION>

                                                        December 31,
                                             -----------------------------------
                                                  1998                1997
                                             ----------------    ---------------

<S>                                          <C>                 <C>
Commercial, financial, and agricultural      $     2,878,000     $    2,432,000
Real estate - construction                         4,659,000             57,000
Real estate - mortgage                            14,936,000          1,346,000
Consumer instalment and other                      1,858,913          2,282,022
                                            ----------------    ---------------
                                                  24,331,913          6,117,022
Deferred loan fees                                   (17,297)                  -
Allowance for loan losses                           (433,882)           (72,000)
                                            -----------------   ----------------
                                             $    23,880,734     $    6,045,022
                                             ================    ===============
</TABLE>



                                       37
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



--------------------------------------------------------------------------------


NOTE 3.  LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)

Changes in the allowance for
loan losses are as follows:
<TABLE>
<CAPTION>

                                                          December 31,
                                              ----------------------------------
                                                    1998              1997
                                              ----------------   ---------------
<S>                                           <C>                <C>
Balance, beginning of year                    $        72,000    $            -
Provision for loan losses                             385,000            72,000
Loans charged off                                     (23,118)                 -
Recoveries of loans previously
charged off                                                 -                 -
                                              ----------------   ---------------
Balance, end of year                          $       433,882    $       72,000
                                              ================   ===============
</TABLE>

                  Management  has  identified  no  material  amounts of impaired
                  loans as defined by SFAS No. 114,  ("Accounting  by  Creditors
                  for Impairment of a Loan").

                  The Company has granted loans to certain directors,  executive
                  officers,  and their related  entities.  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 involved.  Changes in related party loans
                  for the year ended December 31, 1998 are as follows:

Balance, beginning of year                                       $    2,624,786
Advances                                                              2,125,274
Repayments                                                           (1,541,241)
                                                                 ---------------
Balance, end of year                                              $    3,208,819
                                                                 ===============

NOTE 4.  PREMISES AND EQUIPMENT

                  Premises and equipment are summarized as follows:
<TABLE>
<CAPTION>

                                                          December 31,
                                             -----------------------------------
                                                  1998                1997
                                             ---------------     ---------------
<S>                                          <C>                 <C>
Land                                         $      405,265      $      405,265
Buildings                                         1,469,033           1,398,495
Equipment                                           502,757             445,762
                                            ---------------     ---------------
                                                  2,377,055           2,249,522
Accumulated depreciation                           (134,853)            (29,191)
                                            ---------------     ---------------
                                             $    2,242,202      $    2,220,331
                                             ===============     ===============
</TABLE>


                                       38
<PAGE>





                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



--------------------------------------------------------------------------------



NOTE 5   DEPOSITS

                  At  December  31,  1998,  the  scheduled  maturities  of  time
deposits are as follows:

        1999                                                    $     10,596,087
        2000                                                             832,888
        2001                                                             396,182
        2002                                                             232,429
        2003                                                             432,831
                                                               -----------------
                                                                $     12,490,417
                                                               =================

                  At December 31, 1998,  the Company had related party  deposits
of $4,270,670.


NOTE 6.  OTHER BORROWINGS

                  Other borrowings consist of the following:
<TABLE>
<CAPTION>

                                                         December 31,
                                              ----------------------------------
                                                   1998               1997
                                              ---------------    ---------------
<S>                                           <C>                <C>
Note payable, payable in monthly
installments of $701 including 
interest at 4.80%, collateralized
by automobile                                 $       22,241     $       29,397
                                              ===============    ===============
</TABLE>

                  Other  borrowings  at  December  31, 1998 have  maturities  in
future years as follows:

Year ending December 31,                                                        
    1999                                                          $        7,507
    2000                                                                   7,876
    2001                                                                   6,858
                                                                 ---------------
                                                                  $       22,241
                                                                 ===============



                                       39
<PAGE>





                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



-----------------------------------------------------------------------------



NOTE 7.  STOCK OPTIONS

                           The Company has  granted  options to purchase  32,500
                  shares of common  stock to key  employees  under an  incentive
                  stock option  plan.  For a period of three years from the date
                  of grant,  these options are exercisable for the lesser of the
                  book  value  of the  Company's  common  stock  at the  date of
                  exercise  or $10.  Subsequent  to the three year  period,  the
                  options are  exercisable at book value per share.  The options
                  cannot be exercised until the Bank is cumulatively profitable.
                  The options expire ten years from the date of grant.

                           The  Company  has also  reserved  150,000  shares  of
                  common stock for issuance to directors  with the same exercise
                  price,  expiration dates, and exercise restrictions as the key
                  employee  stock  options.  No  options  have been  granted  to
                  directors as of December 31, 1998.

                           Other pertinent information related to the options is
as follows:
<TABLE>
<CAPTION>

                                                  December 31,
                       ---------------------------------------------------------
                                         1998                         1997
                       ---------------------------  ----------------------------
                                       Weighted-                     Weighted-
                                       average                        average
                                       Exercise                      Exercise
                        Number          Price        Number           Price
                       -----------  --------------  ------------  --------------
<S>                   <C>           <C>             <C>           <C>
Under option,
beginning of year               -   $           -             -   $           -
   Granted                 32,500           10.00             -               -
   Exercised                    -               -             -               -
   Terminated                   -               -             -               -
                      -----------                  ------------
Under option,
end of year                32,500           10.00             -               -
                      ===========                  ============

Weighted average
remaining contractual
life                           10                             -
                      ===========                  ============

Weighted average
fair value of
options granted
during the year             $3.97                          $  -
                      ===========                  ============
</TABLE>

                           As  permitted  by  SFAS  No.  123,  ("Accounting  for
                  Stock-Based    Compensation"),    the    Company    recognizes
                  compensation cost for stock-based employee compensation awards
                  in accordance with APB Opinion No. 25,  ("Accounting for Stock
                  Issued to Employees").  The Company recognized no compensation
                  cost for stock-based employee compensation awards for the year
                  ended  December  31,  1998.  If  the  Company  had  recognized
                  compensation  cost in  accordance  with SFAS No. 123, net loss
                  and losses per share would have been increased as follows:

                                       40
<PAGE>





                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



--------------------------------------------------------------------------------


NOTE 7.  STOCK OPTIONS (Continued)
<TABLE>
<CAPTION>

                                                       December 31, 1998
                                           -------------------------------------
                                                                    Basic and
                                                                  Diluted Losses
                                               Net Loss            Per Share
                                           ---------------    ------------------
<S>                                        <C>                 <C>
    As reported                             $    (242,742)     $          (0.32)
    Stock-based compensation,
    net of related tax effect                     (80,284)                (0.11)
                                           ---------------    ------------------
    As adjusted                             $    (323,026)     $          (0.43)
                                           ===============    ==================
</TABLE>


                           The fair value of the options granted during the year
                  was based upon the  Black-Scholes  method of  valuing  options
                  using the following weighted-average assumptions:


    Risk free interest rate                                                5.12%
    Expected life of the options                                        10 Years
    Expected dividends (as a percent of the fair value of the stock)          0%
    Volatility                                                                0%


NOTE 8.  INCOME TAXES

    Income tax expense consists of the following:
<TABLE>
<CAPTION>

                                                         December 31,
                                             -----------------------------------
                                                  1998                1997
                                             ---------------     ---------------
     <S>                                      <C>                 <C>
     Current                                  $      (4,996)      $     (24,987)
     Deferred                                       (75,686)            (90,000)
     Change in valuation allowance                   80,682             114,987
                                             ---------------     ---------------
     Income tax expense                       $            -      $            -
                                             ===============     ===============
</TABLE>





                                       41
<PAGE>





                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



--------------------------------------------------------------------------------



NOTE 8.  INCOME TAXES (Continued)

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

                                                December 31,
                   -------------------------------------------------------------
                              1998                             1997
                   ----------------------------     ----------------------------
                      Amount         Percent           Amount         Percent
                   ---------------   ----------     ---------------   ----------
<S>                <C>               <C>            <C>               <C>
Income taxes at
statutory rate      $     (82,532)      (34) %       $    (114,987)      (34) %
Change in valuation
allowance                  80,682        33                114,987        34
Other                       1,850         1                      -         -
                   ---------------   ----------     ---------------   ----------
Income tax expense  $            -         - %       $            -         - %
                   ===============   ==========     ===============   ==========
</TABLE>

                    The components of deferred income taxes are as follows:
<TABLE>
<CAPTION>

                                                            December 31,
                                              ----------------------------------
                                                    1998               1997
                                              ---------------    ---------------
<S>                                           <C>                <C>
Deferred tax assets:
Loan loss reserves                            $      106,950     $        5,299
Preopening and organization expenses                 109,368            116,984
Net operating loss carryforward                       31,364             26,368
Securities available-for-sale                            535                156
Other                                                  6,581                 72
                                             ---------------    ---------------
                                                     254,798            148,879

Valuation allowance                                 (228,432)          (147,371)
                                              ---------------    ---------------
                                                      26,366              1,508
                                              ---------------    ---------------

Deferred tax liabilities; depreciation                26,366              1,508
                                              ---------------    ---------------

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

                  At December 31, 1998,  the Company has available net operating
                  loss carryforwards of $92,246 for Federal income tax purposes.
                  If unused, the carryforwards will expire beginning in 2007.

                                       42
<PAGE>





                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



--------------------------------------------------------------------------------



NOTE 9.  LOSSES PER COMMON SHARE

                           The  following  is a  reconciliation  of net loss and
                  weighted-average  shares outstanding used in determining basic
                  and diluted losses per common share:
<TABLE>
<CAPTION>

                                        Year Ended December 31, 1998
                      ----------------------------------------------------------
                          Net            Weighted-Average         Per Share
                         Loss                Shares                Amount
                      ---------------    --------------------    ---------------
<S>                   <C>                <C>                     <C>
Basic losses per
common share           $    (242,742)                 758,458     $       (0.32)
                                                                 ===============
Effect of Dilutive
Securities
 Stock options                      -                       -                  -
                      ---------------    --------------------
Diluted losses per
common share           $    (242,742)                 758,458     $       (0.32)
                      ===============    ====================    ===============
</TABLE>

                  Because the exercise  price of the stock  options  approximate
                  the fair  value  of the  Company's  common  stock,  the  stock
                  options have no dilutive effect.

                  For the year ended  December  31, 1997,  the  weighted-average
                  shares  outstanding  was 367,801.  The Company had no dilutive
                  securities in 1997.


NOTE 10.          COMMITMENTS AND CONTINGENT LIABILITIES

                  In the normal course of business, the Company has entered into
                  off-balance-sheet   financial   instruments   which   are  not
                  reflected  in  the  financial   statements.   These  financial
                  instruments  include  commitments to extend credit and standby
                  letters of credit. Such financial  instruments are included in
                  the  financial  statements  when  funds are  disbursed  or the
                  instruments  become payable.  These  instruments  involve,  to
                  varying  degrees,  elements  of  credit  risk in excess of the
                  amount recognized in the balance sheet.

                                       43
<PAGE>





                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



--------------------------------------------------------------------------------



NOTE 10.          COMMITMENTS AND CONTINGENT LIABILITIES

                  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.
                  A summary of the Company's commitments is as follows:
<TABLE>
<CAPTION>

                                                          December 31,
                                             -----------------------------------
                                                   1998               1997
                                             ----------------   ----------------
<S>                                          <C>                <C>
 Commitments to extend credit                 $     5,842,000    $       866,000
 Standby letters of credit                              2,500                  -
                                             ----------------   ----------------
                                              $     5,844,500    $       866,000
                                             ================   ================
</TABLE>

                  Commitments to extend credit  generally have fixed  expiration
                  dates or other termination  clauses and may require payment of
                  a fee.  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 credit
                  risk  involved  in  issuing  these  financial  instruments  is
                  essentially  the same as that  involved in extending  loans to
                  customers.    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.  Collateral  held varies but may
                  include real estate and improvements,  marketable  securities,
                  accounts  receivable,   inventory,   equipment,  and  personal
                  property.

                  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  loan  facilities to customers.
                  Collateral  held varies as specified  above and 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 of the
                  Company,  any liability  resulting from such proceedings would
                  not  have  a  material  effect  on  the  Company's   financial
                  statements.

                                       44
<PAGE>





                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



--------------------------------------------------------------------------------



NOTE 10.          COMMITMENTS AND CONTINGENT LIABILITIES

                  Year 2000 Disclosures

                  The Year 2000 issue is the result of computer  programs  being
                  written  using two  digits  rather  than  four to  define  the
                  applicable  year.  Systems that do not properly  recognize the
                  year "2000" could generate  erroneous data or cause systems to
                  fail. The Company is heavily dependent on computer  processing
                  and telecommunication systems in the daily conduct of business
                  activities.   In   addition,   the   Company   must   rely  on
                  intermediaries,  vendors and customers to appropriately modify
                  their systems in order that all may continue normal operations
                  and operate without significant  disruptions.  The Company has
                  conducted a review of its  computer  systems to  identify  the
                  systems  that could be affected  by the Year 2000  issue.  The
                  Company  presently  believes that, with  modifications  to its
                  computer systems and conversions to new systems, the Year 2000
                  issue will not pose significant  operational  problems for the
                  Company or have a material  adverse effect on future operating
                  results. However, absolute assurance cannot be given that; (1)
                  the    modifications   and   conversions   will   remedy   all
                  deficiencies, (2) failure of any of the Company's systems will
                  not have a material  impact on  operations,  or (3) failure of
                  any other  companies'  systems with whom the Company  conducts
                  business will not have a material impact on operations.


NOTE 11.          CONCENTRATIONS OF CREDIT

                  The Company originates primarily commercial,  residential, and
                  consumer  loans to customers  in Butts 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-one   percent  of  the  Company's   loan  portfolio  is
                  concentrated  in  loans  secured  by real  estate,  of which a
                  substantial portion is secured by real estate in the Company's
                  primary market area. Accordingly,  the ultimate collectibility
                  of the loan  portfolio  is  susceptible  to  changes in market
                  conditions in the  Company's  primary  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 25% of the lesser of statutory capital or net assets
                  as defined, or approximately $1,475,000.

                                       45
<PAGE>





                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



--------------------------------------------------------------------------------



NOTE 12. REGULATORY MATTERS

                  The Bank is subject to certain  restrictions  on the amount of
                  dividends  that  may  be  declared  without  prior  regulatory
                  approval. At December 31, 1998, no dividends could be declared
                  without regulatory approval.

                  The  Company  and the Bank are  subject to various  regulatory
                  capital  requirements  administered  by  the  federal  banking
                  agencies.  Failure to meet minimum  capital  requirements  can
                  initiate   certain   mandatory,    and   possibly   additional
                  discretionary actions by regulators that, if undertaken, could
                  have a direct  material  effect on the  financial  statements.
                  Under capital adequacy guidelines and the regulatory framework
                  for prompt corrective  action,  the Company and Bank must meet
                  specific capital guidelines that involve quantitative measures
                  of the  assets,  liabilities,  and  certain  off-balance-sheet
                  items as calculated under regulatory accounting practices. The
                  Company and Bank's capital amounts and classification are also
                  subject  to  qualitative  judgments  by the  regulators  about
                  components, risk weightings, and other factors.

                  Quantitative  measures  established  by  regulation  to ensure
                  capital  adequacy  require  the  Company  and Bank to maintain
                  minimum  amounts  and  ratios of Total  and Tier I capital  to
                  risk-weighted  assets and of Tier I capital to average assets.
                  Management believes,  as of December 31, 1998, the Company and
                  the Bank meet all capital adequacy  requirements to which they
                  are subject.

                  As of December 31, 1998, the most recent notification from the
                  FDIC  categorized  the  Bank as  well  capitalized  under  the
                  regulatory  framework  for  prompt  corrective  action.  To be
                  categorized  as  well  capitalized,  the  Bank  must  maintain
                  minimum  total  risk-based,  Tier  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.

                                       46
<PAGE>





                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



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

<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, 1998:                                                                    
Total Capital (to
Risk Weighted Assets):

Consolidated          $      7,243      24.40%   $     2,375       8%    $     2,969       10%
Bank                  $      6,306      21.24%   $     2,375       8%    $     2,969       10%

Tier I Capital
(to Risk Weighted
Assets):

Consolidated          $      6,871      23.15%   $     1,188       4%    $     1,781        6%
Bank                  $      5,934      19.99%   $     1,188       4%    $     1,781        6%

Tier I Capital
(to Average Assets):

Consolidated          $      6,871      20.74%   $     1,326       4%    $     1,657        5%
Bank                  $      5,934      17.91%   $     1,326       4%    $     1,657        5%

December 31, 1997:

Total Capital
(to Risk Weighted
Assets):

Consolidated          $      7,121      72.44%   $       787       8%    $       983       10%
Bank                  $      6,171      62.78%   $       787       8%    $       983       10%

Tier I Capital
(to Risk Weighted
Assets):

Consolidated          $      7,049      71.71%   $       394       4%    $       590        6%
Bank                  $      6,099      62.04%   $       394       4%    $       590        6%

Tier I Capital
(to Average Assets):

Consolidated          $      7,049      58.68%   $       481       4%    $       601        5%
Bank                  $      6,099      50.77%   $       481       4%    $       601        5%
</TABLE>


                                       47
<PAGE>





                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



--------------------------------------------------------------------------------



NOTE 13.          FAIR VALUE OF FINANCIAL INSTRUMENTS

                  The following methods and assumptions were used by the Company
                  in  estimating  its  fair  value   disclosures  for  financial
                  instruments.  In cases  where  quoted  market  prices  are not
                  available, fair values are based on estimates using discounted
                  cash flow models.  Those models are significantly  affected by
                  the  assumptions  used,   including  the  discount  rates  and
                  estimates of future cash flows.  In that  regard,  the derived
                  fair value estimates  cannot be substantiated by comparison to
                  independent  markets and, in many cases, could not be realized
                  in  immediate  settlement  of  the  instrument.   The  use  of
                  different  methodologies  may have a  material  effect  on the
                  estimated fair value amounts.  Also, the fair value  estimates
                  presented herein are based on pertinent  information available
                  to management  as of December 31, 1998 and 1997.  Such amounts
                  have  not  been  revalued  for  purposes  of  these  financial
                  statements since those dates and, therefore, current estimates
                  of fair  value  may  differ  significantly  from  the  amounts
                  presented herein.

                  Cash, Due From Banks, and Federal Funds Sold:

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

                  Securities:

                     Fair values for  securities  are based on available  quoted
                     market  prices.  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 models,  using current
                     market  interest rates offered for loans with similar terms
                     to borrowers  of similar  credit  quality.  Fair values for
                     impaired  loans are estimated  using  discounted  cash flow
                     models  or  based  on the  fair  value  of  the  underlying
                     collateral.

                  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  discounted  cash flow models,
                     using current market interest rates offered on certificates
                     with similar remaining maturities.

                                       48
<PAGE>





                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



--------------------------------------------------------------------------------



NOTE 13.          FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

                  Other Borrowings:

                     The  fair  values  of  the   Company's   other   borrowings
approximate their fair values.

                  Accrued Interest:

                     The carrying amounts of accrued interest  approximate their
fair values.

                  Off-Balance Sheet Instruments:

                     The  fair   values  of  the   Company's   off-balance-sheet
                     financial  instruments  are based on fees  charged to enter
                     into similar  agreements.  However,  commitments  to extend
                     credit and  standby  letters of credit do not  represent  a
                     significant value to the Company until such commitments are
                     funded.  The Company has determined that these  instruments
                     do not have a distinguishable  fair value and no fair value
                     has been assigned.

                     The  carrying  amounts  and  estimated  fair  values of the
Company's financial instruments were as follows:
<TABLE>
<CAPTION>

                                   December 31, 1998                   December 31, 1997
                            ----------------------------------   ---------------------------------
                                Carrying             Fair            Carrying            Fair
                                 Amount             Value             Amount            Value
                            ----------------   ---------------   ---------------   ---------------
<S>                         <C>                <C>               <C>               <C>
Financial assets:
Cash, due from banks,
and Federal funds sold      $     4,085,969    $    4,085,969    $    5,888,017    $    5,888,017

Securities available-
for-sale                          5,565,028         5,565,028         2,029,491         2,029,491

Loans held for sale                 251,605           251,605                 -                 -
Loans                            23,880,734        24,329,634         6,045,022         6,074,230

Accrued interest
receivable                          255,834           255,834            50,686            50,686

Financial liabilities:

Deposits                         29,321,903        29,391,929         9,165,090         9,171,887

Other borrowings                     22,241            22,241            29,397            29,397

Accrued interest payable             81,682            81,682            18,343            18,343
</TABLE>



                                       49
<PAGE>





                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



--------------------------------------------------------------------------------



NOTE 14. SUPPLEMENTAL FINANCIAL DATA

     Components of other operating  income and expenses in excess of 1% of total
revenue for the year ended December 31, 1998 are as follows:

    Other income:
    ATM fee income                                                $       45,519

    Other expense:
    Stationery and office supplies                                        43,530
    Legal and professional                                                75,557
    Data processing                                                       58,047
    Advertising                                                           37,426


NOTE 15. PARENT COMPANY FINANCIAL INFORMATION

                  The  following  information  presents  the  condensed  balance
                  sheets,  statements  of  operations,  and cash  flows of First
                  Georgia Community Corp. as of and for the years ended December
                  31, 1998 and 1997:
<TABLE>
<CAPTION>

                               CONDENSED BALANCE SHEETS

                                                  1998                1997
                                             ---------------    ----------------
<S>                                          <C>                <C>
Assets
     Cash                                     $      936,917     $       949,360
     Investment in subsidiary                      5,932,885           6,146,672
     Other assets                                          -              17,629
                                             ---------------    ----------------

     Total assets                             $    6,869,802     $     7,113,661
                                             ===============    ================

Stockholders' equity                          $    6,869,802     $     7,113,661
                                             ===============    ================
</TABLE>


                                       50
<PAGE>





                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



--------------------------------------------------------------------------------



NOTE 15. PARENT COMPANY FINANCIAL INFORMATION (Continued)
<TABLE>
<CAPTION>

                                           CONDENSED STATEMENTS OF OPERATIONS

                                                  1998                1997
                                            ---------------    ----------------
<S>                                         <C>                <C>
Income, interest                              $            -     $        50,079
                                            ---------------    ----------------

Expenses
  Salaries and benefits                                    -              85,239
  Interest                                                 -              11,514
  Write-off/amortization of
  organization costs                                  17,629                 930
  Other expenses                                      12,443              32,514
                                             ---------------    ----------------
  Total expenses                                      30,072             130,197
                                             ---------------    ----------------

  Loss before equity in
  loss of subsidiary                                (30,072)            (80,118)

  Equity in loss of subsidiary                     (212,670)           (258,080)
                                             ---------------    ----------------

  Net loss                                   $     (242,742)     $     (338,198)
                                             ===============    ================
</TABLE>



                                       51
<PAGE>





                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



--------------------------------------------------------------------------------



NOTE 15. PARENT COMPANY FINANCIAL INFORMATION (Continued)
<TABLE>
<CAPTION>

                                      CONDENSED STATEMENTS OF CASH FLOWS

                                                  1998               1997
                                              ---------------   ----------------
<S>                                           <C>               <C>
OPERATING ACTIVITIES
  Net loss                                     $    (242,742)    $     (338,198)
  Adjustments to reconcile net loss to net
  cash provided by (used in) operating
  activities:
  Write-off/amortization of
  organization costs                                  17,629                930
  Loss of subsidiary                                 212,670            258,080
  Other operating activities                                                 -            323,808
                                              ---------------   ----------------

Net cash provided by (used in) operating            (12,443)            244,620
activities
                                              ---------------   ----------------
INVESTING ACTIVITIES
Investment in subsidiary                                    -        (6,500,000)
                                              ---------------   ----------------

Net cash used in investing activities                       -        (6,500,000)
                                              ---------------   ----------------

FINANCING ACTIVITIES
Repayment of other borrowings                               -          (365,800)
Net proceeds from sale of common stock                      -         7,104,443
                                              ---------------   ----------------

Net cash provided by financing activities                   -         6,738,643
                                              ---------------   ----------------

Net increase (decrease) in cash                      (12,443)           483,263

Cash at beginning of year                            949,360            466,097
                                              ---------------   ----------------

Cash at end of year                           $      936,917    $       949,360
                                              ===============   ================
</TABLE>


                                       52
<PAGE>
                                                                    EXHIBIT 13.2

                      Management's Discussion and Analysis
                of Financial Condition and Results of Operations

The  following  is a discussion  of the  financial  condition  of First  Georgia
Community  Corp.,  Inc. (FGC) and its bank subsidiary,  First Georgia  Community
Bank at December 31, 1998 and 1997 and the results of  operations  for the years
then ended.  The purpose of this  discussion  is to focus on  information  about
FGC's  financial  condition  and results of  operations  which are not otherwise
apparent from the 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.

Forward-Looking Statements

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

Overview

The year 1998  marked  the first full year of banking  operations  for FGC.  FGC
commenced  banking  operations  on  September  8, 1997.  FGC's 1998 results were
highlighted by significant  loan and deposit growth that would be expected for a
de novo bank. This growth should provide a base for future  profitability  and a
recovery of FGC's accumulated deficit.


                                       53

<PAGE>


Financial Condition at December 31, 1998 and 1997

Following is a summary of FGC's balance sheets for the periods indicated:
<TABLE>
<CAPTION>

                                                           December 31,
                                                     1998                1997
                                                      (Dollars in Thousands)
<S>                                            <C>                <C>
Cash and due from banks                        $         676      $        1,568
Federal funds sold                                     3,410               4,320
Securities                                             5,565               2,029
Loans                                                 23,881               6,045
Loans held for sale                                      251                   -
Premises and equipment                                 2,242               2,220
Other assets                                             326                 152
                                                    ----------------------------

                                               $      36,351      $       16,334
                                                ============        ============

Total deposits                                 $      29,322      $        9,165
Other borrowings                                          22                  29
Other liabilities                                        137                  26
Stockholders' equity                                   6,870               7,114
                                                     ---------------------------

                                               $      36,351      $       16,334
                                                ============        ============
</TABLE>

Financial Condition at December 31, 1998 and 1997

As of  December  31,  1998,  FGC had total  assets of $36.4  million,  more than
doubling its asset size as of December 31, 1997.  The  completion of FGC's stock
offering in 1997, which raised $7.58 million, has provided a strong capital base
to support  this growth.  Total  interest-earning  assets were $33.1  million at
December  31,  1998 or 91.08% of total  assets as compared to 75.88% at December
31, 1997. FGC's primary interest-earning assets at December 31, 1998 were loans,
which made up 72.89% of total  interest-earning  assets as compared to 48.77% at
December 31, 1997.  FGC's loan to deposit ratio was 82.92% as compared to 66.74%
at December 31, 1997. The 1998 ratio is within FGC's target ratio of 75% to 85%.
Deposit  growth of $20.2 million has been used  primarily to fund loan growth of
$18.1 million.

FGC's  investment  portfolio,  consisting of U.S.  Agency  securities and equity
securities,  amounted to $5.6 million at December 31, 1998. Unrealized losses on
securities  amounted  to  $1,576  at  December  31,  1998.  Management  has  not
specifically  identified any securities for sale in future periods which,  if so
designated,  would  require a charge to operations if the market value would not
be reasonably expected to recover prior to the time of sale.

                                       54
<PAGE>

FGC has 81% of its loan portfolio collateralized by real estate located in FGC's
primary market area of Butts County and surrounding counties.  FGC's real estate
mortgage and construction  portfolio consists of loans  collateralized by one to
four-family  residential  properties (30%),  construction  loans to build one to
four-family   residential   properties  (24%),  and  nonresidential   properties
consisting  primarily  of  small  business  commercial   properties  (46%).  FGC
generally  requires  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                                  90%
 Construction loans on one to four-family residential properties            90%
 Nonresidential property                                                    85%

FGC's remaining 19% of its loan portfolio consists of commercial,  consumer, and
other loans. FGC requires collateral commensurate with the repayment ability and
creditworthiness of the borrower.

The specific  economic and credit risks  associated  with FGC's 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 FGC's 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 FGC's market area are stable with no indications of a significant downturn in
the  general  economy.  Additionally,  FGC has  risk  associated  with  its loan
portfolio as it relates to the Year 2000 issue. (See Year 2000 Disclosures.)

FGC attempts to reduce these  economic and credit risks not only by adherence to
loan to value guidelines,  but also by investigating the creditworthiness of the
borrower and monitoring the borrower's financial position. Also, FGC establishes
and  periodically  reviews its lending  policies and  procedures.  State banking
regulations limit exposure by prohibiting secured loan relationships that exceed
25% of the Bank's statutory capital and unsecured loan relationships that exceed
15% of the Bank's statutory capital.

Liquidity and Capital Resources

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

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

                                       55
<PAGE>


The  liquidity  and capital  resources  of the Bank are  monitored on a periodic
basis  by  State  and  Federal  regulatory  authorities.   As  determined  under
guidelines  established by those regulatory authorities and internal policy, the
Bank's liquidity was considered satisfactory.

At December 31, 1998,  FGC had loan  commitments  outstanding  of $5.8  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,  the Bank has the ability on a
short-term  basis to borrow and  purchase  Federal  funds  from other  financial
institutions.  At  December  31,  1998,  the Bank has  arrangements  with  three
commercial banks for short-term advances of $3,500,000.

At December  31,  1998,  FGC's and the Bank's  capital  ratios  were  considered
adequate based on regulatory minimum capital  requirements.  FGC's stockholders'
equity  decreased  due to a net loss in 1998 of  $243,000.  FGC's  stockholders'
equity  also  decreased  due to the  decrease  in the fair  value of  securities
available for sale in the amount of $1,117.  For  regulatory  purposes,  the net
unrealized  losses  on  securities  available  for  sale  are  excluded  in  the
computation of the capital ratios.

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

The minimum capital  requirements to be considered well capitalized under prompt
corrective  action provisions and the actual capital ratios for FGC and the Bank
as of December 31, 1998 are as follows:
<TABLE>
<CAPTION>

                                                         Actual
                                      ------------------------------------------

                                                                    Regulatory
                                        FGC              Bank      Requirements

<S>                                    <C>               <C>       <C>
Leverage capital ratio                 20.74%            17.91%            5.00%
Risk-based capital ratios:
Core capital                           23.15             19.99             6.00
   Total capital                       24.40             21.24            10.00
</TABLE>

At December 31, 1998, FGC had no material commitments for capital expenditures.

These ratios will decline as asset  growth  continues,  but will still remain in
excess of the regulatory minimum requirements.

Management  believes that its  liquidity and capital  resources are adequate and
will meet its foreseeable short and long-term needs. Management anticipates that
it will have sufficient  funds available to meet current loan commitments and to
fund or  refinance,  on a timely  basis,  its  other  material  commitments  and
liabilities.

                                       56
<PAGE>

Except for expected continued growth common to a de novo bank, and uncertainties
related to the Year 2000 issue (see Year 2000  Disclosures),  management  is not
aware of any other known trends,  events or uncertainties that will have or that
are  reasonably  likely  to have a  material  effect on its  liquidity,  capital
resources  or   operations.   Management  is  also  not  aware  of  any  current
recommendations  by the regulatory  authorities which, if they were implemented,
would have such an effect.

Effects of Inflation

The  impact of  inflation  on banks  differs  from its  impact on  non-financial
institutions.  Banks,  as  financial  intermediaries,   have  assets  which  are
primarily  monetary  in nature  and which  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.   FGC,  through  its  asset-liability
committee,  attempts 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 FGC's interest rate sensitive  assets and
liabilities, see the "Asset/Liability Management" section.

Results of Operations For The Years Ended December 31, 1998 and 1997

Following is a summary of FGC's operations for the periods indicated.
<TABLE>
<CAPTION>

                                                    Year Ended December 31,
                                                  1998                   1997
                                                      (Dollars in Thousands)
<S>                                            <C>                  <C>
Interest income                                $    2,072           $       384

Interest expense                                      781                    53

Net interest income                                 1,291                   331

Provision for loan losses                             385                    72

Other income                                          193                    31

Other expenses                                      1,342                   628

Pretax loss                                          (243)                 (338)

Income taxes                                            -                     -

Net loss                                             (243)                 (338)
</TABLE>

FGC commenced its  operations on September 8, 1997.  Prior to the  commencement,
FGC was engaged in activities involving the formation of FGC, selling its common
stock, and obtaining necessary approvals. FGC incurred operating losses totaling
$226,000  during its  organizational  period  ($95,000  in 1996 and  $131,000 in
1997).

                                       57
<PAGE>


FGC  incurred  total  organizational  and stock issue costs of $109,000 of which
$72,000  were  capitalized  to be  amortized  over a period of sixty months (see
Non-interest  Expense),  and  $37,000 was  recorded  as a  reduction  in capital
surplus.
Through the end of 1997, FGC incurred additional operating losses of $207,000.

Net Interest Income

FGC's results of operations are determined by its ability to effectively  manage
interest income and expense, to minimize loan and investment losses, to generate
non-interest income, and to control operating expenses. Since interest rates are
determined by market forces and economic  conditions  beyond the control of FGC,
FGC's ability to generate net interest  income is dependent  upon its ability to
obtain an adequate net interest spread between the rate paid on interest-bearing
liabilities and the rate earned on interest-earning assets.

The net yield on average  interest-earning  assets was 5.52% in 1998 as compared
to 6.19% in 1997.  Average loans  increased by $14.9 million which accounted for
the  majority  of a $20.5  million  increase in total  average  interest-earning
assets.  Average  interest-bearing  liabilities  increased by $14.7 million with
average  interest-bearing  demand  and  time  deposits  accounting  for the vast
majority of this increase.  The rate earned on average  interest-earning  assets
increased  to  8.86% in 1998  from  7.77% in  1997.  The  rate  paid on  average
interest-bearing liabilities was 4.93% in 1998 and 4.21% in 1997.

Provision for Loan Losses

The  provision  for loan  losses was  $385,000 in 1998 as compared to $72,000 in
1997.  The amount  provided was due  primarily  to the growth of the  portfolio.
Based upon management's  evaluation of the loan portfolio,  management  believes
the reserve for loan losses to be adequate to absorb possible losses on existing
loans that may become  uncollectible.  This  evaluation  considers  past due and
classified loans,  underlying collateral values, and current economic conditions
which may affect the borrower's  ability to repay.  As of December 31, 1998, and
1997, FGC has no nonperforming loans or assets. The allowance for loan losses as
a  percentage  of total loans at December 31, 1998 and 1997 was 1.78% and 1.18%,
respectively.

Other Income

Other operating income consists of service charges on deposit accounts and other
miscellaneous  revenues and fees. Other operating income was $193,000 in 1998 as
compared  to $31,000  in 1997.  The  increases  are due to FGC being open for an
entire year versus only four months in 1997.

Non-interest Expense

Other  operating  expense for 1998  consists of salaries and  employee  benefits
($634,000),  equipment and occupancy  expenses  ($189,000),  and other operating
expenses ($519,000). The increases over 1997 ($283,000 for salaries and employee
benefits, $119,000 for equipment and occupancy, and $312,000 for other operating
expenses)  are due  primarily  to FGC being open for an entire  year versus only
four months in 1997 and the growth of the Bank.  FGC also adopted SOP 98-5 which
required the write-off of $65,000 of organization costs.

                                       58
<PAGE>

Income Tax

FGC had no income tax expense due to pre-tax  operating  losses of $243,000  and
$338,000 in 1998 and 1997, respectively.

Asset/Liability Management

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

FGC's  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 of the Bank
on a  monthly  basis.  The  objective  of this  policy  is to  monitor  interest
rate-sensitive   assets  and  liabilities  so  as  to  minimize  the  impact  of
substantial  movements in interest  rates on earnings.  An asset or liability is
considered to be interest rate-sensitive if it will 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 adversely affect net interest  income,  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 adversely
affect net  interest  income.  If FGC's  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,  FGC also  evaluates  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") which 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 FGC's  liquidity  position.  FGC currently
prices 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 which would  negatively  affect  FGC's  liquidity
position.

At January 31, 1999,  FGC's  cumulative one year interest  rate-sensitivity  gap
ratio was 86%. FGC's  targeted  ratio is 80% to 120% in this time horizon.  This
indicates  that FGC's  interest-bearing  liabilities  will  reprice  during this
period at a rate faster than FGC's interest-earning assets.

The  following  table  sets forth the  distribution  of the  repricing  of FGC's
interest-earning assets and interest-bearing liabilities as of January 31, 1999,
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
earning  assets and  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 since the
repricing  of  various  categories  of assets  and  liabilities  is  subject  to
competitive  pressures and the needs of FGC's  customers.  In addition,  various
assets and  liabilities  indicated  as  repricing  within the same period may in
fact, reprice at different times within such period and at different rates.


                                       59


<PAGE>
<TABLE>
<CAPTION>


                                              After             After
                                              Three              One
                                              Months            Year but
                             Within            but             Within             After
                             Three           Within            Five              Five
                             Months          One Year           Years             Years          Total

                                           (Dollars in Thousands)
<S>                       <C>                <C>             <C>                <C>             <C>
Interest-earning assets:
     Federal funds sold   $   4,560          $     --         $      --         $    --         $  4,560
     Securities               1,049             2,505             2,011              --             5,565
     Loans                    9,773             2,646            12,841              --            25,260
                          -----------------------------------------------------------------------------

                             15,382             5,151            14,852              --            35,385
                          ----------------------------------------------------------------------------

Interest-bearing
 liabilities:
Interest-bearing demand
 deposits                    11,519                --                --              --           11,519
Savings                         867                --                --              --               867
Certificates of deposit       3,130             8,485             2,961              --            14,576
Other borrowings                  2                 5               15               --               22
                          ----------------------------------------------------------------------------------

                             15,518             8,490             2,976              --            26,984
                          ----------------------------------------------------------------------------

Interest rate sensitivity
gap                       $    (136)         $  (3,339)        $  11,876         $   --           $  8,401
                          =================  ===============   ===============   ===============  =========
Cumulative interest rate
sensitivity gap           $    (136)         $  (3,475)        $   8,401         $     8,401
                          =================  ===============   ===============   ===============
Interest rate sensitivity
gap ratio                       .99                .61              4.99              -- 
                          ===============================================================
Cumulative interest rate
sensitivity gap ratio           .99                .86              1.31             1.31
                          ================================================================
</TABLE>

Year 2000 Disclosures

The  Situation:  Now that 1999 is well into the first quarter and the millennium
draws closer, FGC recognizes the global concern that information  systems may be
subject to the much discussed  "Year 2000 Bug". The Year 2000 ("Y2K") problem is
the  existence  of many  programs  and systems  that will not operate  correctly
unless they are  reprogrammed  to  accommodate  the new century.  In fact,  many
programs  were  originally  written to only  accommodate  a two digit year field
and/or defaulted to the nineteenth century.

No country, government, business, or person is immune from the potential adverse
effects of the Y2K problem.  The banking  industry is especially  susceptible to
the Y2K  problem.  If loan  or  deposit  interest  accruals  are not  calculated
properly,  the impact  can be  devastating.  A system  crash  could  result in a
disruption  of  business  which in turn  could  cause FGC to lose a  significant
portion of its customer base,  either of which could result in material  adverse
consequences for FGC.

                                       60
<PAGE>


Because  of the  potential  risk  posed  by the Y2K  problem,  FGC  has  taken a
proactive role in addressing the impact to FGC and its customer base. FGC formed
a Y2K committee, consisting of key management,  directors, and staff, to address
the impact.  The Committee has been charged with the responsibility of assessing
the problem,  overseeing  corrective action, as well as testing Y2K readiness of
all equipment, software, and applications.

Readiness:  FGC's  Y2K  committee  has  addressed  each  area of  risk to  FGC's
continued  operation  once the century date change  takes place.  FGC has broken
down the areas  according to mission  critical and  non-mission  critical areas.
Each area requiring  attention are: service bureau (including ATM processing and
bank forms),  correspondent  relationship,  check/coupon  printers, and internal
office  equipment.  In efforts to ensure Y2K  readiness,  FGC converted to a new
core  processing  system in February  1999 with The  InterCept  Group.  FGC also
engaged the  services of an external  firm to review and monitor the progress of
FGC's readiness plans. Readiness plans are under constant review and scrutiny to
ensure each aspect of the Federal Deposit Insurance  Corporation and the Federal
Financial   Institutions   Examination   Council's  Year  2000   guidelines  for
preparedness are met.

FGC also relies heavily on external  vendors for its daily  operations,  such as
electricity,  phone  service,  water,  and gas.  Each of these  vendors is under
constant  review as the century date change is rapidly  approaching.  An initial
review to assess  readiness  was  completed  in early 1998 and  continues  to be
monitored.

Contingency Plans: Due to the critical nature of our core processing systems and
our automated platform for new accounts and loan document  preparation,  FGC has
developed  contingency plans that will be put into operation should any of these
systems not pass Year 2000 readiness  testing.  Contingency plans have also been
developed in the event of disruption of service due to power outage, etc.

Cost: After completing an overall assessment of the Year 2000 impact to FGC, FGC
established a Y2K budget. The budget has been reviewed and updated to keep up to
date with the current Y2K  status.  Subsequently,  the budget was amended to its
current level of $48,777 with provisions made for the core processing conversion
and hardware  changes to facilitate  conversion.  Management does not expect the
cost of remediation to vary significantly from the present budget.

Other Concerns:  FGC has taken a proactive stance to communicate to the customer
base the Y2K  problem,  its  impact,  and how to stay  informed.  Customers  are
receiving mailers in a timely manner to keep them updated on FGC and the Federal
Deposit  Insurance  Corporation's  preparedness.  FGC will  continue to keep its
customer base updated.

In relation to credit risk,  FGC has performed  due  diligence  analysis on both
commercial  loan  customers  and fund  providers.  The  analysis  is updated and
reviewed to ensure proper risk assessment.

Finally, FGC acknowledges that due to the heightened media attention to the Year
200 issue that customers may withdraw extra amounts of money at the end of 1999.
The increased  withdrawal could result in a liquidity issue for FGC;  therefore,
FGC has revised its liquidity policy to address the liquidity needs  anticipated
in light of the Y2K issue.

                                       61
<PAGE>


The foregoing are forward-looking  statements  reflecting  management's  current
assessment and estimates with respect to FGC's Year 2000 compliance  efforts and
the impact of Year 2000 issues on FGC's business and operations. Various factors
could  cause  actual  plans  and  results  to  differ   materially   from  those
contemplated by such assessments, estimates and forward-looking statements, many
of which are beyond the control of FGC. Some of these factors  include,  but are
not  limited  to   representations   by  FGC's   vendors   and   counterparties,
technological advances, economic considerations, and consumer perceptions. FGC's
Year  2000  compliance  program  is  an  ongoing  process  involving   continual
evaluation and may be subject to change in response to new developments.

                                       62
<PAGE>


               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  stockholders'  equity  of  FGC,  the  interest  rates
experienced by FGC; the investment  portfolio of FGC; the loan portfolio of FGC,
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 reserves for loan losses of FGC; types of deposits of FGC and the
return on equity and assets for FGC.







                                       63

<PAGE>


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

Average Balances

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

                                                         From September 8, 1997,
                                                           Date of Commencement
                                       Year Ended              of Operations,
                                    December 31, 1998       to December 31, 1997
                                                 (Dollars in Thousands)
                   ASSETS
<S>                                    <C>                       <C>
Cash and due from banks                $      1,120              $      273
Taxable securities                            3,596                     150
Securities valuation account                      5                       -
Federal funds sold                            3,793                    1,706
Loans (2)                                    15,999                    1,060
Reserve for loan losses                        (252)                      (6)
Other assets                                  2,487                      624
                                           ---------------------------------
                                       $     26,748              $     3,807
                                       ====================     ============

Total interest-earning assets          $     23,388              $     2,916
                                       ====================     ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:
Noninterest-bearing demand             $      3,847              $      420
Interest-bearing demand                       8,614                     624
Savings                                         657                      62
Time                                          6,531                     408
                                        -----------------------------------
Total deposits                         $     19,649              $    1,514

Other borrowings                                 26                       5
Other liabilities                               106                       7
                                        -----------------------------------
Total liabilities                            19,781                   1,526
                                        -----------------------------------
Stockholders' equity                          6,967                   2,281
                                        -----------------------------------
                                       $     26,748              $    3,807
                                       ====================     ===========

Total interest-bearing liabilities     $     15,828              $    1,099
                                       ====================     ===========
</TABLE>


(1)       For each category,  average  balances were determined  using the daily
          average  balances  during  the year for 1998 and for the  period  from
          September 8, 1997, date of commencement of operations, to December 31,
          1997, for 1997.

     (2) There were no  nonaccrual  loans  included in average loans for 1998 or
1997.



                                       64

<PAGE>


Interest Income and Interest Expense

The following  tables set forth the amount of FGC's 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 its banking operations.
<TABLE>
<CAPTION>

                                                     Years Ended December 31,
                                             1998                          1997
                                                      Average                        Average
                                      Interest         Rate            Interest       Rate
                                                           (Dollars in Thousands)
<S>                                   <C>              <C>            <C>            <C>
INTEREST INCOME:
Interest and fees on loans (1)        $  1,642         10.26%         $     120         11.32%
Interest on taxable securities             219          6.10                  9          5.82
Interest on Federal funds sold             211          5.55                 98          5.74
Interest earned during the period
prior to commencement of
banking operations                            -          -                  157          -
                                      ---------------------------------------------------------
Total interest income                 $  2,072          8.86                384          7.77
                                      ---------------------------------------------------------

INTEREST EXPENSE:
Interest on interest-bearing
demand deposits                       $    380          4.41          $      20          3.22
Interest on savings deposits                19          2.92                  2          2.97
Interest on time deposits                  381          5.82                 24          5.91
Interest on other borrowings (2)             1          4.80                  -          4.80
Interest incurred during the period
prior to commencement of
banking operations                           -            -                   7          -
                                      ------------------------------------------------------------
Total interest expense                     781          4.93                 53          4.21
                                      ------------------------------------------------------------

NET INTEREST INCOME                   $  1,291                        $     331
                                      ==================              ==========

Net interest spread                                     3.93%                            3.56%
                                                        =====                            =====
Net yield on average
interest-earning assets                                 5.52%                            6.19%
                                                        =====                            =====
</TABLE>


(1)       Interest and fees on loans  includes  $215,000 and $22,000 of loan fee
          income for the years ended  December 31, 1998 and 1997,  respectively.
          There was no interest  income  recognized on  nonaccrual  loans during
          1998 or 1997.

(2)       Interest on other borrowings in 1997 was less than $300.



                                       65
<PAGE>


Rate and Volume Analysis

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

                                                       Year Ended December 31,
                                                             1998 vs. 1997
                                                             Changes Due To:
                                                                       Increase
                                            Rate        Volume        (Decrease)
                                                     (Dollars in Thousands)
<S>                                         <C>      <C>              <C>
Increase (decrease) in:
Income from interest-earning assets:
Interest and fees on loans                  $ (12)   $    1,534        $   1,522
Interest on taxable securities                  -           210              210
Interest on Federal funds sold                 (3)          116              113
                                            ------------------------------------
Total interest income                         (15)        1,860            1,845
                                            ------------------------------------

Expense from interest-bearing liabilities:
Interest on interest-bearing
demand deposits                                10           350              360
Interest on savings deposits                    -            17               17
Interest on time deposits                       -           357              357
Interest on other borrowings                    -             1                1
                                            ------------------------------------
Total interest expense                         10           725              735
                                            ------------------------------------

Net interest income                         $ (25)   $    1,135       $    1,110
                                            =======     ============      ======
</TABLE>

Interest income earned of $157,000 and interest expense incurred of $7,000 prior
to the  commencement  of banking  operations in 1997 have been excluded from the
above table.


                                       66
<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:

                                                          December 31,
                                                1998                 1997
                                                      (Dollars in Thousands)
U. S. Government agencies                      $  5,516            $       1,998
Equity securities                                    49                       31
                                               ---------------------------------
                                               $  5,565            $       2,029
                                               =================================

Maturities

The amounts of  securities in each category as of December 31, 1998 are shown in
the following table according to contractual  maturity  classifications  (1) one
year or less,  (2) after one year  through  five  years,  (3) after  five  years
through ten years and (4) after ten years. Equity securities are not included in
the table because they have no contractual maturity.

<TABLE>
<CAPTION>

                                                       After one year            After five years
                               One year or less      through five years         through ten years
                             Amount      Yield (1)    Amount    Yield (1)        Amount      Yield (1)
<S>                          <C>         <C>          <C>       <C>           <C>            <C>
U.S. Government
  agencies                   $   508       5.00%      $ 5,008      5.80%      $    --         --
                             ====================================================================


                                After ten years              Total
                             Amount      Yield (1)      Amount    Yield (1)
U.S. Government
  agencies                   $    --        -          $ 5,516      5.73%
                             ================================================

</TABLE>


(1)      Yields were computed using coupon interest,  adding discount  accretion
         or subtracting premium amortization, as appropriate, on a ratable basis
         over the life of each  security.  The weighted  average  yield for each
         maturity  range was computed  using the carrying value of each security
         in that range.





                                       67
<PAGE>


                                 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. December 31,
<TABLE>
<CAPTION>

                                              1998                  1997
                                                    (Dollars in Thousands)
<S>                                         <C>                    <C>
Commercial                                  $  2,878               $    2,432
Real estate-construction                       4,659                       57
Real estate-mortgage                          14,919                    1,346
Consumer installment loans and other           1,859                    2,282
                                           ----------------------------------
                                              24,315                    6,117
 Less allowance for loan losses                 (434)                     (72)
                                           ----------                 --------
Net loans                                   $ 23,881               $    6,045
                                            ==================     ==========
</TABLE>

Maturities and Sensitivities of Loans to Changes in Interest Rates

Total loans as of December 31, 1998 are shown in the following  table  according
to contractual maturity classifications (1) one year or less, (2) after one year
through five years, and (3) after five years.

The disclosure of loans by the required categories, commercial and financial and
real estate - construction,  is not available and would involve undue burden and
expense to the Company. In making this determination, the Company has considered
the  estimated  cost  to  compile  the  required  information  and  its  current
electronic data processing capability.
<TABLE>
<CAPTION>

                                                        (Dollars in Thousands)
     <S>                                                 <C>
     Maturity:
          One year or less                                  $        7,731
          After one year through five years                         14,622
          After five years                                           1,962
                                                            --------------
                                                            $       24,315
</TABLE>

The  following  table  summarizes  loans at December 31, 1998 with the due dates
after one year which have  predetermined  and  floating or  adjustable  interest
rates.
<TABLE>
<CAPTION>

                                                         (Dollars in Thousands)
          <S>                                             <C>
          Predetermined interest rates                       $      13,525
          Floating or adjustable interest rates                      3,059
                                                             -------------
                                                             $      16,584
</TABLE>

                                       68
<PAGE>


Risk Elements

Information  with respect to  nonaccrual,  past due, and  restructured  loans at
December 31, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>

                                                           December 31,
                                                   1998                1997
                                                       (Dollars in Thousands)
<S>                                              <C>                <C>
Nonaccrual loans                                 $       0          $        0
Loans contractually past due ninety
days or more as to interest or
principal payments and still accruing                    0                   0
Restructured loans                                       0                   0
Loans, now current about which there are
serious doubts as to the ability of the
borrower to comply with loan repayment terms             0                   0
Interest income that would have been recorded
on nonaccrual and restructured loans under
original terms                                           0                   0
Interest income that was recorded on
nonaccrual and restructured loans                        0                   0
</TABLE>

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

Loans  classified for regulatory  purposes as loss,  doubtful,  substandard,  or
special  mention that have not been included in the table above do not represent
or result from trends or uncertainties which 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 which causes management to have serious doubts as to
the ability of such borrowers to comply with the loan repayment terms.


                                       69
<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.
<TABLE>
<CAPTION>

                                                    Years Ended December 31,
                                                    1998                1997
                                                     (Dollars in Thousands)
<S>                                                 <C>             <C>
Average amount of loans outstanding                 $   15,999      $     1,060
                                                                                           =============       =====
Balance of allowance for loan losses
at beginning of period                              $       72      $        --
                                                    ------------      ---------

Loans charged off
Commercial and financial                                    --               --
Real estate mortgage                                        14               --
Installment                                                  9               --
                                                    ---------------------------
                                                            23               --
                                                    ---------------------------

Loans recovered
Commercial and financial                                    --               --
Real estate mortgage                                        --               --
Installment                                                 --               --
                                                    ---------------------------
                                                            --               --
                                                    ---------------------------

Net charge-offs                                             23               --
                                                    ---------------------------

Additions to allowance charged to operating
expense during period                                      385               72
                                                     --------------------------

Balance of allowance for loan losses
at end of period                                     $     434       $       72
                                                     ===========       ========

Ratio of net loans charged off during the
period to average loans outstanding                       0.14%              --%
                                                     ==========        ========
Allowance for Loan Losses
</TABLE>

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


                                       70
<PAGE>


As of December  31, 1998 and 1997,  management  had made no  allocations  of its
allowance for loan losses to specific categories of loans. Based on management's
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, 1998                     December 31, 1997
                                       Percent of loans in                     Percent of loans in
                                       each category                           each category
                          Amount       to total loans              Amount      to total loans
                                                (Dollars in Thousands)
<S>                       <C>          <C>                          <C>        <C>
Commercial                 $ 87            12%                        $36         40%
Real estate -
 construction                65            19                           7          1
Real estate - mortgage      239            61                          14         22
Consumer installment
     loans and other         43             8                          15         37
                           ---------------------------------------------------------
                           $434           100%                        $72        100%
                           ===================                        ===============
</TABLE>






                                       71
<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>

                                               Years Ended December 31,
                                               1998                  1997
                                        Amount       Percent    Amount   Percent
                                                   (Dollars in Thousands)
<S>                                    <C>          <C>         <C>      <C>
Noninterest-bearing demand deposits    $  3,847        -- %     $   420    --%
Interest-bearing demand deposits          8,614       4.41          624  3.22
Savings deposits                            657       2.92           62  2.97
Time deposits                             6,531       5.82          408  5.91
                                        -------------------    ----------------
                                       $19,649                   $1,514       
                                       ========================================
</TABLE>


     (1) Average  balances  were  determined  using the daily  average  balances
during  the year for  1998  for the  period  from  September  8,  1997,  date of
commencement of operations, to December 31, 1997 for 1997.


The  amounts of time  certificates  of deposit  issued in amounts of $100,000 or
more as of December 31, 1998 are shown below by category, which is based on time
remaining until maturity of (1) three months or less, (2) over three through six
months, (3) over six through twelve months, and (4) over twelve months.
<TABLE>
<CAPTION>

                                                     (Dollars in Thousands)
     <S>                                                <C>
     Three months or less                               $      2,109
     Over three months through six months                        967
     Over six through twelve months                              741
     Over twelve months                                          504
                                                        ------------
              Total                                     $      4,321
                                                        ============
</TABLE>


                    RETURN ON ASSETS AND STOCKHOLDERS' EQUITY

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

                                                      Years Ended December 31,
                                                     1998                 1997
     Return on assets (1)                          (0.91)%              (2.80)%
     Return on equity (2)                          (3.48)               (4.67)
     Dividend payout ratio(3)                         -                    -
     Equity to assets ratio (4)                    26.05                59.92

(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.

                                       72