EXHIBIT 13.2

CONSOLIDATED
FINANCIAL STATEMENTS

INDEPENDENT AUDITORS REPORT

To the Board of
DirectorsFirst Georgia Community Corp.Jackson, Georgia

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

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

In our opinion, the 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, 2002 and 2001, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.



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

Atlanta, GeorgiaFebruary 6, 2003

63



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FIRST GEORGIA COMMUNITY CORP.AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETSDECEMBER 31, 2002 AND 2001



|                                                              |  | 2002        |             | 2001        |  
|------------------------------------------------------------- |  | ----------- | ----------- | ----------- | -
|                                                              |  |             |             |             |  
|                                                              |  |             |             |             |  
|Assets                                                        |  |             |             |             |  
|Cash and due from banks                                       |  | $           | 2,844,136   |             | $
|Interest-bearing deposits in banks                            |  | 1,367,696   |             | 1,074,503   |  
|Federal funds sold                                            |  | 12,835,000  |             | 3,082,000   |  
|Securities available-for-sale                                 |  | 17,561,149  |             | 15,985,819  |  
|Restricted equity securities, at cost                         |  | 1,181,600   |             | 640,000     |  
|Loans held for sale                                           |  | 578,872     |             | 302,543     |  
|                                                              |  |             |             |             |  
|Loans                                                         |  | 106,542,487 |             | 87,983,162  |  
|Less allowance for loan losses                                |  | 2,802,091   |             | 1,352,058   |  
|                                                              |  |             |             |             |  
|Loans, net                                                    |  | 103,740,396 |             | 86,631,104  |  
|                                                              |  |             |             |             |  
|Premises and equipment                                        |  | 2,335,641   |             | 2,372,529   |  
|Other assets                                                  |  | 5,374,671   |             | 3,405,475   |  
|                                                              |  |             |             |             |  
|                                                              |  |             |             |             |  
|Total assets                                                  |  | $           | 147,819,161 |             | $
|                                                              |  |             |             |             |  
|Liabilities and Stockholders
Equity                          |  |             |             |             |  
|                                                              |  |             |             |             |  
|Deposits                                                      |  |             |             |             |  
|Noninterest-bearing                                           |  | $           | 8,468,832   |             | $
|Interest-bearing                                              |  | 98,179,419  |             | 85,404,872  |  
|                                                              |  |             |             |             |  
|Total deposits                                                |  | 106,648,251 |             | 92,739,368  |  
|Other borrowings                                              |  | 28,510,009  |             | 13,300,000  |  
|Other liabilities                                             |  | 898,753     |             | 786,695     |  
|                                                              |  |             |             |             |  
|Total liabilities                                             |  | 136,057,013 |             | 106,826,063 |  
|                                                              |  |             |             |             |  
|                                                              |  |             |             |             |  
|Commitments and contingencies                                 |  |             |             |             |  
|                                                              |  |             |             |             |  
|Stockholders equity                                          |  |             |             |             |  
|Common stock, par value $5; 10,000,000                        |  |             |             |             |  
|Shares authorized; 925,708 and 760,708 issued and outstanding |  | 4,628,540   |             | 3,803,540   |  
|Capital surplus                                               |  | 5,090,442   |             | 3,771,421   |  
|Retained earnings                                             |  | 1,713,660   |             | 1,512,466   |  
|Accumulated other comprehensive income (loss)                 |  | 329,506     |             | (2,497      | )
|                                                              |  |             |             |             |  
|                                                              |  |             |             |             |  
|Total stockholders equity                                    |  | 11,762,148  |             | 9,084,930   |  
|                                                              |  |             |             |             |  
|                                                              |  |             |             |             |  
|Total liabilities and stockholders equity                    |  | $           | 147,819,161 |             | $
|                                                              |  |             |             |             |  

See Notes to Consolidated Financial
Statements.

64



---

FIRST GEORGIA COMMUNITY CORP.AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOMEYEARS ENDED DECEMBER 31, 2002 AND 2001



|                                                    |  | 2002      |           | 2001      |  
|--------------------------------------------------- |  | --------- | --------- | --------- | -
|                                                    |  |           |           |           |  
|Interest income                                     |  |           |           |           |  
|Loans, including fees                               |  | $         | 7,577,752 |           | $
|Taxable securities                                  |  | 818,791   |           | 633,334   |  
|Nontaxable securities                               |  | 81,767    |           | 31,340    |  
|Deposits in banks                                   |  | 20,980    |           | 4,554     |  
|Federal funds sold                                  |  | 73,081    |           | 264,404   |  
|                                                    |  |           |           |           |  
|Total interest income                               |  | 8,572,371 |           | 8,397,993 |  
|                                                    |  |           |           |           |  
|                                                    |  |           |           |           |  
|Interest expense                                    |  |           |           |           |  
|Deposits                                            |  | 3,076,710 |           | 3,883,368 |  
|Other borrowings                                    |  | 848,316   |           | 623,527   |  
|                                                    |  |           |           |           |  
|Total interest expense                              |  | 3,925,026 |           | 4,506,895 |  
|                                                    |  |           |           |           |  
|                                                    |  |           |           |           |  
|Net interest income                                 |  | 4,647,345 |           | 3,891,098 |  
|Provision for loan losses                           |  | 1,894,000 |           | 393,000   |  
|                                                    |  |           |           |           |  
|Net interest income after provision For loan losses |  | 2,753,345 |           | 3,498,098 |  
|                                                    |  |           |           |           |  
|                                                    |  |           |           |           |  
|Other income                                        |  |           |           |           |  
|Service charges on deposit accounts                 |  | 380,102   |           | 327,416   |  
|Other operating income                              |  | 248,001   |           | 231,381   |  
|                                                    |  |           |           |           |  
|Total other income                                  |  | 628,103   |           | 558,797   |  
|                                                    |  |           |           |           |  
|                                                    |  |           |           |           |  
|Other expenses                                      |  |           |           |           |  
|Salaries and employee benefits                      |  | 1,442,129 |           | 1,393,449 |  
|Equipment and occupancy expenses                    |  | 347,788   |           | 311,924   |  
|Other operating expenses                            |  | 1,424,924 |           | 952,485   |  
|                                                    |  |           |           |           |  
|Total other expenses                                |  | 3,214,841 |           | 2,657,858 |  
|                                                    |  |           |           |           |  
|                                                    |  |           |           |           |  
|Income before income taxes (benefits)               |  | 166,607   |           | 1,399,037 |  
|                                                    |  |           |           |           |  
|Income tax expense (benefits)                       |  | (34,587   | )         | 462,693   |  
|                                                    |  |           |           |           |  
|                                                    |  |           |           |           |  
|Net income                                          |  | $         | 201,194   |           | $
|                                                    |  |           |           |           |  
|                                                    |  |           |           |           |  
|Basic earnings per share                            |  | $         | 0.23      |           | $
|                                                    |  |           |           |           |  
|                                                    |  |           |           |           |  
|Diluted earnings per share                          |  | $         | 0.22      |           | $
|                                                    |  |           |           |           |  

See Notes to Consolidated Financial
Statements.

65



---

FIRST GEORGIA COMMUNITY CORP.AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEYEARS ENDED DECEMBER 31, 2002 AND 2001



|                                                                                                                                  |  | 2002    |         | 2001   |  
|--------------------------------------------------------------------------------------------------------------------------------- |  | ------- | ------- | ------ | -
|                                                                                                                                  |  |         |         |        |  
|                                                                                                                                  |  |         |         |        |  
|Net income                                                                                                                        |  | $       | 201,194 |        | $
|                                                                                                                                  |  |         |         |        |  
|Other comprehensive income :                                                                                                      |  |         |         |        |  
|Unrealized holding gains on securities available-for-sale arising during period,
net of tax of $203,486 and $16,320, respectively |  | 332,003 |         | 32,152 |  
|                                                                                                                                  |  |         |         |        |  
|                                                                                                                                  |  |         |         |        |  
|Comprehensive income                                                                                                              |  | $       | 533,197 |        | $
|                                                                                                                                  |  |         |         |        |  

See Notes to Consolidated Financial
Statements.

66



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FIRST GEORGIA COMMUNITY CORP.AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITYYEARS ENDED DECEMBER 31, 2002 AND 2001



|                                               |  | Common Stock |         |           |           |                |   | AccumulatedOtherComprehensive Income(Loss) |           | TotalStockholders Equity |        
|---------------------------------------------- |  | ------------ | ------- | --------- | --------- | -------------- | - | ------------------------------------------ | --------- | ------------------------- | -------
|                                               |  |              |         |           |           |                |   |                                            |          
|                                               |  | Shares       |         | Par Value |           | CapitalSurplus |   | RetainedEarnings                           |           |                           |        
|                                               |  |              |         |           |           |                |   |                                            |           |                           |        
|Balance, December 31, 2000                     |  | 758,458      |         | $         | 3,792,290 |                | $ | 3,754,816                                  |           | $                         | 576,122
|Net income                                     |  |             |         |          |           |               |   | 936,344                                    |           |                          |        
|Exercise of stock options                      |  | 2,250        |         | 11,250    |           | 16,605         |   |                                           |           |                          |        
|Other comprehensive income                     |  |             |         |          |           |               |   |                                           |           | 32,152                    |        
|                                               |  |              |         |           |           |                |   |                                            |           |                           |        
|Balance, December 31, 2001                     |  | 760,708      |         | 3,803,540 |           | 3,771,421      |   | 1,512,466                                  |           | (2,497                    | )      
|Net income                                     |  |             |         |          |           |               |   | 201,194                                    |           |                          |        
|Exercise of stock options                      |  | 165,000      |         | 825,000   |           | 1,217,700      |   |                                           |           |                          |        
|Tax benefit from the exercise of stock options |  |             |         |          |           | 101,321        |   |                                           |           |                          |        
|Other comprehensive income                     |  |             |         |          |           |               |   |                                           |           | 332,003                   |        
|                                               |  |              |         |           |           |                |   |                                            |           |                           |        
|Balance, December 31, 2002                     |  |              | 925,708 |           | $         | 4,628,540      |   | $                                          | 5,090,442 |                           | $      
|                                               |  |              |         |           |           |                |   |                                            |           |                           |        

See Notes to Consolidated Financial
Statements.

67



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FIRST GEORGIA COMMUNITY CORP.AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWSYEARS ENDED DECEMBER 31, 2002 AND 2001



|                                                                                  |  | 2002        |           | 2001        |  
|--------------------------------------------------------------------------------- |  | ----------- | --------- | ----------- | -
|                                                                                  |  |             |           |             |  
|OPERATING ACTIVITIES                                                              |  |             |           |             |  
|Net income                                                                        |  | $           | 201,194   |             | $
|Adjustments to reconcile net income to net cash provided by
operating activities: |  |             |           |             |  
|                                                                                  |  |             |           |             |  
|Depreciation                                                                      |  | 186,360     |           | 159,786     |  
|Net increase in loans held for sale                                               |  | (276,329    | )         | (302,543    | )
|Provision for loan losses                                                         |  | 1,894,000   |           | 393,000     |  
|Deferred income taxes                                                             |  | (606,587    | )         | (199,044    | )
|Deferred compensation                                                             |  | 184,385     |           | 53,808      |  
|Increase in interest receivable                                                   |  | (85,152     | )         | (22,155     | )
|Increase (decrease) in interest payable                                           |  | 36,791      |           | (25,249     | )
|Net other operating activities                                                    |  | (388,740    | )         | (165,355    | )
|                                                                                  |  |             |           |             |  
|                                                                                  |  |             |           |             |  
|Net cash provided by operating activities                                         |  | 1,145,922   |           | 828,592     |  
|                                                                                  |  |             |           |             |  
|                                                                                  |  |             |           |             |  
|INVESTING ACTIVITIES                                                              |  |             |           |             |  
|Net increase in interest bearing deposits in banks                                |  | (293,193    | )         | (1,029,856  | )
|Net (increase) decrease in federal funds sold                                     |  | (9,753,000  | )         | 4,008,000   |  
|Purchases of securities available-for-sale                                        |  | (5,121,998  | )         | (15,138,025 | )
|Proceeds from maturities of securities
available-for-sale                         |  | 4,082,157   |           | 7,167,185   |  
|Purchases of restricted equity securities                                         |  | (541,600    | )         | (325,000    | )
|Net increase in loans                                                             |  | (20,103,292 | )         | (23,989,720 | )
|Purchases of premises and equipment                                               |  | (149,472    | )         | (369,738    | )
|Purchase of life insurance policies                                               |  |            |           | (250,000    | )
|                                                                                  |  |             |           |             |  
|                                                                                  |  |             |           |             |  
|Net cash used in investing activities                                             |  | (31,880,398 | )         | (29,927,154 | )
|                                                                                  |  |             |           |             |  
|                                                                                  |  |             |           |             |  
|FINANCING ACTIVITIES                                                              |  |             |           |             |  
|Net increase in deposits                                                          |  | 13,908,883  |           | 23,061,616  |  
|Repayment of other borrowings                                                     |  | (500,000    | )         | (6,858      | )
|Proceeds from other borrowings                                                    |  | 15,710,009  |           | 7,000,000   |  
|Proceeds from exercise of stock options                                           |  | 2,042,700   |           | 27,855      |  
|                                                                                  |  |             |           |             |  
|                                                                                  |  |             |           |             |  
|Net cash provided by financing activities                                         |  | 31,161,592  |           | 30,082,613  |  
|                                                                                  |  |             |           |             |  
|                                                                                  |  |             |           |             |  
|Net increase in cash and due from banks                                           |  | 427,116     |           | 984,051     |  
|                                                                                  |  |             |           |             |  
|Cash and due from banks at beginning of year                                      |  | 2,417,020   |           | 1,432,969   |  
|                                                                                  |  |             |           |             |  
|                                                                                  |  |             |           |             |  
|Cash and due from banks at end of year                                            |  | $           | 2,844,136 |             | $
|                                                                                  |  |             |           |             |  
|                                                                                  |  |             |           |             |  
|SUPPLEMENTAL DISCLOSURES                                                          |  |             |           |             |  
|Cash paid for:                                                                    |  |             |           |             |  
|Interest                                                                          |  | $           | 3,888,235 |             | $
|Income taxes                                                                      |  | $           | 551,312   |             | $

68



---



|NONCASH TRANSACTION                                          |  |   |           |  |  
|------------------------------------------------------------ |  | - | --------- |  | -
|Principal balances of loans transferred to other real estate |  | $ | 1,100,000 |  | $
|                                                             |  |   |           |  |  

See Notes to Consolidated Financial Statements.

69



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FIRST GEORGIA COMMUNITY CORP.AND SUBSIDIARYNOTES 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.

Basis of Presentation and Accounting
Estimates

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

In preparing financial statements in conformity with accounting principles generally accepted in the United States of
America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the balance sheet date and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the
valuation of foreclosed real estate and deferred taxes.

Cash, Due From Banks and Cash Flows

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

The Bank is required to maintain reserve balances in cash or on deposit with the Federal Reserve
Bank, based on a percentage of deposits. The total of those reserve balances was approximately $608,000 at December 31, 2002.

Securities

Debt securities that management has the positive intent and ability to hold to maturity are classified as held-to-maturity and recorded at amortized
cost. Debt securities not classified as held-to-maturity are classified as available-for-sale and recorded at fair value with unrealized gains and losses excluded from earnings and reported in other comprehensive income, net of the related deferred
tax effect. Equity securities, including restricted stock, without a readily determinable fair value are recorded at cost.

Purchase premiums and discounts are
recognized in interest income using the interest method over the terms of the securities. Gains and losses on the sale of securities are determined using the specific identification method. Declines in the fair value of held-to-maturity and
available-for-sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses.

70



---

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 the Company has the intent to sell in the foreseeable future, and are carried at
the lower of aggregate cost or market value. Net unrealized losses, if any, are recognized through a valuation allowance by charges to income. Gains and losses on sales of loans are recognized at settlement dates and are determined by the difference
between sales proceeds and the carrying value of the loans.

Loans

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

Nonrefundable loan fees and costs incurred for loans are deferred and recognized in income over the life of the loans using a method which approximates a level yield.

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

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

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

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

71



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE
1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Premises and Equipment

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

Other Real Estate Owned

Other real estate owned represents properties acquired through foreclosure. Other real estate owned is held for sale and is carried at the lower of cost or fair value less
estimated costs to sell. Any write-down to fair value at the time of transfer to other real estate owned is charged to the allowance for loan losses. Revenue and expenses from operations and changes in the valuation allowance are included in net
expenses from foreclosed assets. The carrying amount of other real estate owned at December 31, 2002 and 2001 was $1,120,073 and $ -, respectively.

Income
Taxes

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

Stock Compensation Plan

At December 31, 2002, the Company has a stock-based
employee compensation plan, which is described more fully in Note 8. The Company accounts for this plan under the recognition and measurement principles of APB Opinion No. 25,Accounting for Stock Issued to
Employees, and related Interpretations. No stock-based employee compensation cost is reflected in net income, as all options granted under the plan had an exercise price equal to the market value of the underlying stock on
the date of grant. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS Statement No. 123,Accounting for Stock-Based
Compensation, to stock-based employee compensation.



|                                                                                                                                            |  | Years Ended December 31, |        
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------ | -------
|                                                                                                                                            |  |                          |        
|                                                                                                                                            |  | 2002                     |        
|                                                                                                                                            |  |                          |        
|Net income, as reported                                                                                                                     |  | $                        | 201,194
|Deduct: Total stock-based employee compensation expense determined under fair value based method for
all awards, net of related tax effects |  | (46,081                  | )      
|                                                                                                                                            |  |                          |        
|Pro forma net income                                                                                                                        |  | $                        | 155,113
|                                                                                                                                            |  |                          |        
|Earnings per share:                                                                                                                         |  |                          |        
|Basic - as reported                                                                                                                         |  | $                        | .23    
|                                                                                                                                            |  |                          |        
|Basic - pro forma                                                                                                                           |  | $                        | .17    
|                                                                                                                                            |  |                          |        
|Diluted - as reported                                                                                                                       |  | $                        | .22    
|                                                                                                                                            |  |                          |        
|Diluted - pro forma                                                                                                                         |  | $                        | .17    
|                                                                                                                                            |  |                          |        

72



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE
1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Earnings Per Share

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

Comprehensive Income

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

Accounting Standards

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based CompensationTransition and Disclosure.
SFAS No. 148 amends SFAS No. 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition for an entity that voluntarily changes to the fair value based method
of accounting for stock-based employee compensation. It also amends the disclosure provisions of SFAS No. 123 to require prominent disclosure about the effects on reported net income of an entitys accounting policy decisions with respect to
stock-based employee compensation. The Company has not elected to adopt the recognition provisions of this Statement for stock-based employee compensation and has elected to continue with accounting methodology in Opinion No. 25 as permitted by SFAS
No. 123.

NOTE 2.SECURITIES

The amortized cost and fair value of securities are summarized as follows:



|                                                 |  | AmortizedCost |            | GrossUnrealizedGains |   | GrossUnrealizedLosses |   | FairValue  |         
|------------------------------------------------ |  | ------------- | ---------- | -------------------- | - | --------------------- | - | ---------- | --------
|                                                 |  |               |            |                      |   |                       |   |            |         
|Securities Available-for-Sale December 31, 2002: |  |               |            |                      |   |                       |   |            |         
|U. S. Government and agency securities           |  | $             | 3,992,240  |                      | $ | 129,033               |   | $          |        
|State and municipal securities                   |  | 2,461,246     |            | 48,508               |   | (667                  | ) | 2,509,087  |         
|Mortgage-backed securities                       |  | 10,576,201    |            | 354,588              |   |                      |   | 10,930,789 |         
|                                                 |  |               |            |                      |   |                       |   |            |         
|                                                 |  | $             | 17,029,687 |                      | $ | 532,129               |   | $          | (667    
|                                                 |  |               |            |                      |   |                       |   |            |         
|                                                 |  |               |            |                      |   |                       |   |            |         
|Securities Available-for-Sale December 31, 2001: |  |               |            |                      |   |                       |   |            |         
|U. S. Government and agency securities           |  | $             | 4,040,730  |                      | $ | 73,696                |   | $          | (9,362  
|State and municipal securities                   |  | 1,370,944     |            |                     |   | (39,978               | ) | 1,330,966  |         
|Mortgage-backed securities                       |  | 10,578,172    |            | 22,395               |   | (50,778               | ) | 10,549,789 |         
|                                                 |  |               |            |                      |   |                       |   |            |         
|                                                 |  | $             | 15,989,846 |                      | $ | 96,091                |   | $          | (100,118
|                                                 |  |               |            |                      |   |                       |   |            |         

Securities with a carrying value of $9,014,000 and
$10,431,000 at December 31, 2002 and 2001 were pledged to secure public deposits and for other purposes required or permitted by law.

73



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE
2.SECURITIES (Continued)

The amortized cost and fair value
of debt securities as of December 31, 2002 by contractual maturity are shown below. Maturities may differ from contractual maturities of mortgage-backed securities because the mortgages underlying the securities may be called or repaid without
penalty. Therefore, these securities are not included in the maturity categories in the following summary.



|                           |  | Securities Available-for-Sale |           
|-------------------------- |  | ----------------------------- | ----------
|                           |  |                               |           
|                           |  | AmortizedCost                 |           
|                           |  |                               |           
|                           |  |                               |           
|Due from one to five years |  | $                             | 3,527,240 
|Due from five to ten years |  | 1,921,246                     |           
|Due after ten years        |  | 1,005,000                     |           
|Mortgage-backed securities |  | 10,576,201                    |           
|                           |  |                               |           
|                           |  | $                             | 17,029,687
|                           |  |                               |           

NOTE 3.LOANS

The composition of loans is summarized as follows:



|                                       |  | December 31, |            
|-------------------------------------- |  | ------------ | -----------
|                                       |  |              |            
|                                       |  | 2002         |            
|                                       |  |              |            
|                                       |  |              |            
|Commercial, financial and agricultural |  | $            | 11,344,000 
|Real estate  construction             |  | 20,296,000   |            
|Real estate  mortgage                 |  | 71,847,000   |            
|Consumer installment and other         |  | 3,335,314    |            
|                                       |  |              |            
|                                       |  | 106,822,314  |            
|Deferred loan fees                     |  | (279,827     | )          
|Allowance for loan losses              |  | (2,802,091   | )          
|                                       |  |              |            
|Loans, net                             |  | $            | 103,740,396
|                                       |  |              |            

Changes in the allowance for loan losses are as
follows:



|                                           |  | Years Ended December 31, |          
|------------------------------------------ |  | ------------------------ | ---------
|                                           |  |                          |          
|                                           |  | 2002                     |          
|                                           |  |                          |          
|                                           |  |                          |          
|Balance, beginning of year                 |  | $                        | 1,352,058
|Provision for loan losses                  |  | 1,894,000                |          
|Loans charged off                          |  | (457,741                 | )        
|Recoveries of loans previously charged off |  | 13,774                   |          
|                                           |  |                          |          
|Balance, end of year                       |  | $                        | 2,802,091
|                                           |  |                          |          

The total recorded investment in impaired loans was
$5,911,767 and $1,317,980 at December 31, 2002 and 2001, respectively. There were no impaired loans that had related allowances determined in accordance with SFAS No. 114,Accounting by Creditors for Impairment of a
Loan,at December 31, 2002 and 2001. The average recorded investment in impaired loans for 2002 and 2001 was $3,578,949 and $256,610, respectively. Interest income recognized for cash payments received on impaired loans
totaled $15,879 and $33,995 for the years ended December 31, 2002 and 2001, respectively.

74



---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3.LOANS (Continued)

Loans on nonaccrual status amounted to approximately $2,714,136 and $1,300,000 at December 31, 2002 and 2001, respectively. There were no loans past due ninety days or more and still accruing interest at
December 31, 2002 and 2001.

In the ordinary course of business, the Company has granted loans to certain related parties, including directors, executive
officers and their affiliates. The interest rates on these loans were substantially the same as rates prevailing at the time of the transaction and repayment terms are customary for the type of loan. Changes in related party loans for the year ended
December 31, 2002 are as follows:



|Balance, beginning of year |  | $          | 6,314,541 | 
|-------------------------- |  | ---------- | --------- | 
|Advances                   |  | 4,411,974  |          
|Repayments                 |  | (3,312,412 | )        
|                           |  |            |          
|Balance, end of year       |  | $          | 7,414,103 | 
|                           |  |            |           | 

NOTE 4.PREMISES AND EQUIPMENT

Premises and equipment are summarized as
follows:



|                         |  | December 31, |          
|------------------------ |  | ------------ | ---------
|                         |  |              |          
|                         |  | 2002         |          
|                         |  |              |          
|                         |  |              |          
|Land                     |  | $            | 493,265  
|Buildings                |  | 1,695,566    |          
|Leasehold Improvements   |  | 31,225       |          
|Equipment                |  | 828,678      |          
|                         |  |              |          
|                         |  | 3,048,734    |          
|Accumulated depreciation |  | (713,093     | )        
|                         |  |              |          
|                         |  | $            | 2,335,641
|                         |  |              |          

The Company has entered into a noncancelable
operating lease agreement to lease branch banking facilities scheduled to open in February of 2003. The lease is for a term of five years. The Company will be responsible for utilities, property taxes, insurance and routine maintenance.

Future minimum lease payments on the lease is summarized as follows:



|2003       |  | $27,500  | 
|---------- |  | -------- | 
|2004       |  | 30,000   | 
|2005       |  | 30,000   | 
|2006       |  | 30,000   | 
|2007       |  | 30,000   | 
|Thereafter |  | 2,500    | 
|           |  |          | 
|           |  | $150,000 | 
|           |  |          | 

75



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE
5.DEPOSITS

The aggregate amount of time deposits in
denominations of $100,000 or more at December 31, 2002 and 2001 was $32,777,730 and $28,106,834, respectively. The Company had brokered deposits at December 31, 2002 and 2001 of $18,006,695 and $18,109,861, respectively. The scheduled maturities of
time deposits at December 31, 2002 are as follows:



|2003 |  | $         | 53,736,563 | 
|---- |  | --------- | ---------- | 
|2004 |  | 7,092,812 |           
|2005 |  | 5,121,343 |           
|2006 |  | 1,117,789 |           
|2007 |  | 3,062,975 |           
|     |  |           |           
|     |  | $         | 70,131,482 | 
|     |  |           |            | 

NOTE 6.OTHER BORROWINGS

Other borrowings consist of the following:



|                                                                                                                                                                                 |  | December 31, |           
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ----------
|                                                                                                                                                                                 |  |              |           
|                                                                                                                                                                                 |  | 2002         |           
|                                                                                                                                                                                 |  |              |           
|                                                                                                                                                                                 |  |              |           
|$3,000,000 line of credit from bank with interest at prime minus 1.00% (3.75% at
December 31, 2001), collateralized by common stock of the Bank.                                 |  | $            |          
|Advance from Federal Home Loan Bank, interest payable quarterly at 6.385% until August 13, 2004 when
the rate may be converted to the three month LIBOR, due August 13, 2009.    |  | 1,750,000    |           
|Advance from Federal Home Loan Bank, interest payable quarterly at 5.92% (rate
may be converted to the three month LIBOR), due March 17, 2010.                                   |  | 2,550,000    |           
|Advance from Federal Home Loan Bank, interest payable quarterly at 6.44% (rate may be converted to
the three month LIBOR), due August 25, 2003.                                  |  | 2,000,000    |           
|Advance from Federal Home Loan Bank, interest payable quarterly at 5.02% (rate
may be converted to the three month LIBOR), due January 4, 2011.                                  |  | 3,000,000    |           
|Advance from Federal Home Loan Bank, interest payable quarterly at 5.20% until August 8, 2006 when
the rate may be converted to the three month LIBOR, due August 8, 2011.       |  | 3,500,000    |           
|Advance from Federal Home Loan Bank, interest payable quarterly at 2.82% until
September 4, 2005 when the rate may be converted to the three month LIBOR, due September 4, 2007. |  | 5,000,000    |           
|Securities sold under repurchase agreements.                                                                                                                                     |  | 5,710,009    |           
|Floating rate junior subordinated debentures, interest payable quarterly at the
three month LIBOR plus 3.45%, due November 7, 2032.                                              |  | 5,000,000    |           
|                                                                                                                                                                                 |  |              |           
|                                                                                                                                                                                 |  |              |           
|                                                                                                                                                                                 |  | $            | 28,510,009
|                                                                                                                                                                                 |  |              |           

76



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE
6.OTHER BORROWINGS

The advances from the Federal Home Loan
Bank are secured by certain qualifying loans of approximately $16.9 million and certain qualifying securities of approximately $3.3 million.

Securities sold
under repurchase agreements, which are secured borrowings, generally mature within one to four days from the transaction date. Securities sold under repurchase agreements are reflected at the amount of cash received in connection with the
transactions. The Company may be required to provide additional collateral based on the fair value of the underlying securities. The Company monitors the fair value of the underlying securities on a daily basis.

In 2002, the Company formed a wholly-owned grantor trust to issue cumulative trust preferred securities to the public. The grantor trust has invested the proceeds of the trust
preferred securities in junior subordinated debentures of the Company. The trust preferred securities can be redeemed prior to maturity at the option of the Company on or after November 7, 2007. The sole assets of the grantor trust are the Junior
Subordinated Deferrable Interest Debentures of the Company (the Debentures) held by the grantor trust. The Debentures have the same interest rate (three month LIBOR plus 3.45%, floating) as the trust preferred securities. The Company has the right
to defer interest payments on the Debentures at any time or from time to time for a period not exceeding 20 consecutive quarters provided that no extension period may extend beyond the stated maturity of the related Debentures. During any such
extension period, distributions on the trust preferred certificates would also be deferred.

Payment of periodic cash distributions and payment upon
liquidation or redemption with respect to the trust preferred securities are guaranteed by the Company to the extent of funds held by the grantor trust (the Preferred Securities Guarantee). The Preferred Securities Guarantee, when taken together
with the Companys other obligations under the Debentures, constitute a full and unconditional guarantee, on a subordinated basis, by the Company of payments due on the trust preferred securities.

NOTE 7.DEFERRED COMPENSATION PLANS

The Company has a deferred compensation plan providing for death and retirement benefits for its executive officers. The estimated amounts to be paid under the compensation plan have been funded through the purchase of
life insurance policies on the executive officers. The balance of the policy cash surrender values included in other assets at December 31, 2002 and 2001 is $2,257,576 and $2,145,633, respectively. Income recognized on the policies amounted to
$128,430 and $91,839 for the years ended December 31, 2002 and 2001, respectively. The balance of the deferred compensation included in other liabilities at December 31, 2002 and 2001 is $209,353 and $118,826, respectively. Expense recognized for
executive officer deferred compensation amounted to $90,527 and $53,808 for the years ended December 31, 2002 and 2001, respectively.

In 2002, the Company
established a deferred compensation plan for its directors whereby each director may elect to defer receipt of his director fees. The amount of the fees deferred bear interest at a rate of 10%. The total amount of fees deferred in 2002 totaled
$89,500. The total amount of interest credited to deferred fees totaled $4,358. The balance of the deferred fees plus interest credited amounted to $93,858 and is included in other liabilities at December 31, 2002.

77



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE
8.STOCK OPTIONS

The Company has a
stock incentive plan and has reserved 250,000 shares of common stock for issuance pursuant to awards granted under the plan. The plan provides for the granting of stock options, stock appreciation rights, stock awards and other stock incentives to
director and certain key employees.

Other pertinent information related to the options is as follows:



|                                                               |  | Year Ended December 31, |        
|-------------------------------------------------------------- |  | ----------------------- | -------
|                                                               |  |                         |        
|                                                               |  | 2002                    |        
|                                                               |  |                         |        
|                                                               |  | Number                  |        
|                                                               |  |                         |        
|Under option, beginning of year                                |  |                         | 187,200
|Granted                                                        |  | 28,300                  |        
|Exercised                                                      |  | (165,000                | )      
|Cancelled                                                      |  |                        |        
|                                                               |  |                         |        
|Under option, end of year                                      |  | 50,500                  |        
|                                                               |  |                         |        
|                                                               |  |                         |        
|Exercisable, end of year                                       |  | 20,700                  |        
|                                                               |  |                         |        
|                                                               |  |                         |        
|Weighted average fair value of options granted during the year |  | $                       | 4.50   
|                                                               |  |                         |        

Information pertaining to options outstanding at
December 31, 2002 is as follows:



|                        |  | Options Outstanding |  | Options Exercisable                      | 
|----------------------- |  | ------------------- |  | ---------------------------------------- | 
|                        |  |                     |  |                                          | 
|Range ofExercise Prices |  | NumberOutstanding   |  | Weighted-AverageRemainingContractualLife | 
|                        |  |                     |  |                                          | 
|$12.38-$14.17           |  | 50,500              |  | 10 years                                 | 
|                        |  |                     |  |                                          | 

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



|                        |  | Years Ended December 31, |  
|----------------------- |  | ------------------------ | -
|                        |  |                          |  
|                        |  | 2002                     |  
|                        |  |                          |  
|                        |  |                          |  
|Dividend yield          |  | 0                        | %
|Expected life           |  | 10 years                 |  
|Expected volatility     |  | 0.01                     | %
|Risk-free interest rate |  | 3.86                     | %

78



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9.INCOME TAXES

Income tax expense (benefits) consists of the
following:



|                              |  | Years Ended December 31, |        
|----------------------------- |  | ------------------------ | -------
|                              |  |                          |        
|                              |  | 2002                     |        
|                              |  |                          |        
|Current                       |  | $                        | 572,000
|Deferred                      |  | (606,587                 | )      
|                              |  |                          |        
|Income tax expense (benefits) |  | $                        | (34,587
|                              |  |                          |        

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



|                                    |  | Years Ended December 31, |        
|----------------------------------- |  | ------------------------ | -------
|                                    |  |                          |        
|                                    |  | 2002                     |        
|                                    |  |                          |        
|                                    |  |                          |        
|Income taxes at statutory rate      |  | $                        | 56,646 
|Tax free interest income            |  | (29,218                  | )      
|Income from life insurance policies |  | (38,061                  | )      
|State income taxes (benefits)       |  | (25,007                  | )      
|Other                               |  | 1,053                    |        
|                                    |  |                          |        
|Income tax expense (benefits)       |  | $                        | (34,587
|                                    |  |                          |        

The components of deferred income taxes are as
follows:



|                                     |  | December 31, |        
|------------------------------------ |  | ------------ | -------
|                                     |  |              |        
|                                     |  | 2002         |        
|                                     |  |              |        
|Deferred tax assets:                 |  |              |        
|Loan loss reserves                   |  | $            | 964,794
|Preopening and organization expenses |  |             |        
|Securities available-for-sale        |  |             |        
|Deferred compensation                |  | 114,494      |        
|Deferred loan fees                   |  | 147,447      |        
|                                     |  |              |        
|                                     |  | 1,226,735    |        
|                                     |  |              |        
|                                     |  |              |        
|Deferred tax liabilities:            |  |              |        
|Depreciation                         |  | 56,332       |        
|Securities available-for-sale        |  | 201,956      |        
|                                     |  |              |        
|                                     |  | 258,288      |        
|                                     |  |              |        
|                                     |  |              |        
|Net deferred tax assets              |  | $            | 968,447
|                                     |  |              |        

79



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10.EARNINGS PER SHARE

Presented below is a summary of the components used to
calculate basic and diluted earnings per share.



|                                                                                                                                |  | Years Ended December 31, |        
|------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------ | -------
|                                                                                                                                |  |                          |        
|                                                                                                                                |  | 2002                     |        
|Basic Earnings Per Share:                                                                                                       |  |                          |        
|Weighted average common shares outstanding                                                                                      |  | 889,790                  |        
|                                                                                                                                |  |                          |        
|                                                                                                                                |  |                          |        
|Net income                                                                                                                      |  | $                        | 201,194
|                                                                                                                                |  |                          |        
|                                                                                                                                |  |                          |        
|Basic earnings per share                                                                                                        |  | $                        | .23    
|                                                                                                                                |  |                          |        
|                                                                                                                                |  |                          |        
|Diluted Earnings Per Share:                                                                                                     |  |                          |        
|Weighted average common shares outstanding                                                                                      |  | 889,790                  |        
|Net effect of the assumed exercise of stock options based on the treasury stock
method using average market prices for the year |  | 7,342                    |        
|                                                                                                                                |  |                          |        
|Total weighted average common shares and common stock equivalents outstanding                                                   |  | 897,132                  |        
|                                                                                                                                |  |                          |        
|                                                                                                                                |  |                          |        
|Net income                                                                                                                      |  | $                        | 201,194
|                                                                                                                                |  |                          |        
|                                                                                                                                |  |                          |        
|Diluted earnings per share                                                                                                      |  | $                        | .22    
|                                                                                                                                |  |                          |        

NOTE 11.COMMITMENTS AND CONTINGENCIES

Loan Commitments

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial
instruments include commitments to extend credit and standby letters of credit. Such commitments involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amount recognized in the balance sheets.

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



|                             |  | December 31, |          
|---------------------------- |  | ------------ | ---------
|                             |  |              |          
|                             |  | 2002         |          
|                             |  |              |          
|                             |  |              |          
|Commitments to extend credit |  | $            | 7,877,000
|                             |  |              |          
|Standby letters of credit    |  | 410,000      |          
|                             |  |              |          
|                             |  | $            | 8,287,000
|                             |  |              |          

80



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE
11.COMMITMENTS AND CONTINGENCIES (Continued)

Loan Commitments
(Continued)

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the
contract. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

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

Contingencies

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

NOTE 12.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-six 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 statutory capital, or approximately $2,339,000.

NOTE 13.REGULATORY MATTERS

The Bank is subject to certain restrictions on the amount of dividends that may be declared without prior regulatory approval.
At December 31, 2002, dividends of approximately $134,000 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. Capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk

81



---

weightings and other factors. Prompt correction action provisions are not applicable to bank holding companies.

Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios of Total and Tier I capital to
risk-weighted assets, as defined, and of Tier I capital to average assets, as defined. Management believes, as of December 31, 2002 and 2001, the Company and the Bank met all capital adequacy requirements to which they are subject.

As of December 31, 2002, the most recent notification from the Federal Deposit Insurance Corporation categorized the Bank as well capitalized under the regulatory framework
for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the following table. There are no conditions or events since that
notification that management believes have changed the Banks category.

The Company and the Banks actual capital amounts and ratios are presented
in the following tables.



|                                        |  | Actual                 |  | For CapitalAdequacyPurposes |   | To Be WellCapitalized UnderPrompt
CorrectiveAction Provisions | 
|--------------------------------------- |  | ---------------------- |  | --------------------------- | - | ------------------------------------------------------------- | 
|                                        |  |                        |  |                             |   |                                                               | 
|                                        |  | Amount                 |  | Ratio                       |   | Amount                                                        | 
|                                        |  | (Dollars in Thousands) | 
|December 31, 2002:                      |  |                        |  |                             |   |                                                               | 
|Total Capital to Risk Weighted Assets:  |  |                        |  |                             |   |                                                               | 
|Consolidated                            |  | $17,945                |  | 15.00                       | % | $9,574                                                        | 
|Bank                                    |  | $12,823                |  | 10.72                       | % | $9,574                                                        | 
|Tier I Capital to Risk Weighted Assets: |  |                        |  |                             |   |                                                               | 
|Consolidated                            |  | $14,291                |  | 11.94                       | % | $4,787                                                        | 
|Bank                                    |  | $11,311                |  | 9.45                        | % | $4,787                                                        | 
|Tier I Capital to Average Assets:       |  |                        |  |                             |   |                                                               | 
|Consolidated                            |  | $14,291                |  | 10.06                       | % | $5,682                                                        | 
|Bank                                    |  | $11,311                |  | 7.96                        | % | $5,682                                                        | 
|                                        |  |                        |  |                             |   |                                                               | 
|December 31, 2001:                      |  |                        |  |                             |   |                                                               | 
|Total Capital to Risk Weighted Assets:  |  |                        |  |                             |   |                                                               | 
|Consolidated                            |  | $    10,351            |  | 10.25                       | % | $     8,082                                                   | 
|Bank                                    |  | $    10,805            |  | 10.70                       | % | $     8,081                                                   | 
|Tier I Capital to Risk Weighted Assets: |  |                        |  |                             |   |                                                               | 
|Consolidated                            |  | $      9,087           |  | 8.99                        | % | $     4,041                                                   | 
|Bank                                    |  | $      9,541           |  | 9.45                        | % | $     4,041                                                   | 
|Tier I Capital to Average Assets:       |  |                        |  |                             |   |                                                               | 
|Consolidated                            |  | $      9,087           |  | 7.97                        | % | $     4,562                                                   | 
|Bank                                    |  | $      9,541           |  | 8.37                        | % | $     4,562                                                   | 

NOTE 14.FAIR VALUE OF FINANCIAL INSTRUMENTS

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

82



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE
14.FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

Cash, Due From
Banks, Interest-Bearing Deposits in Banks and Federal Funds Sold:The carrying amounts of cash, due from banks, interest-bearing deposits in banks and federal funds sold approximate fair values.

Securities:Fair values for securities are based on available quoted market prices. The carrying values of equity securities with no readily determinable
fair value approximate fair values.

Loans and Loans Held for Sale:For variable-rate loans that reprice frequently and have no
significant change in credit risk, fair values are based on carrying values. For other loans, the fair values are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers
with similar credit quality. Fair values for impaired loans are estimated using discounted cash flow analyses or underlying collateral values, where applicable. The carrying amount of loans held for sale approximate their fair values.

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

Other Borrowings:The fair values of the Companys fixed rate borrowings are estimated using discounted cash flow
models based on the Companys incremental borrowing rate for similar types of borrowing arrangements. The carrying amounts of all other variable rate borrowings and securities sold under repurchase agreements approximate their fair
values.

Accrued Interest:The carrying amounts of accrued interest approximate their fair values.

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

The carrying amounts and estimated fair values of the Companys financial instruments were as follows:



|                                                                                 |  | December 31, 2002 |            | December 31, 2001 |  
|-------------------------------------------------------------------------------- |  | ----------------- | ---------- | ----------------- | -
|                                                                                 |  |                   |            |                   |  
|                                                                                 |  | CarryingAmount    |            | FairValue         |  
|                                                                                 |  |                   |            |                   |  
|Financial assets:                                                                |  |                   |            |                   |  
|Cash, due from banks, interest-bearing deposits in banks, and federal funds sold |  | $                 | 17,046,832 |                   | $
|Securities                                                                       |  | 18,742,749        |            | 18,742,749        |  
|Loans held for sale                                                              |  | 578,872           |            | 578,872           |  
|Loans                                                                            |  | 103,740,396       |            | 106,727,935       |  
|Accrued interest receivable                                                      |  | 728,508           |            | 728,508           |  
|                                                                                 |  |                   |            |                   |  
|Financial liabilities:                                                           |  |                   |            |                   |  
|Deposits                                                                         |  | 106,648,251       |            | 108,316,927       |  
|Other borrowings                                                                 |  | 28,510,009        |            | 28,629,761        |  
|Accrued interest payable                                                         |  |                   | 416,091    |                   |  

83



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15.SUPPLEMENTAL FINANCIAL DATA

Components of other income and expenses in excess of 1% of total revenue are as follows:



|                                    |  | Years Ended December 31, |        
|----------------------------------- |  | ------------------------ | -------
|                                    |  |                          |        
|                                    |  | 2002                     |        
|                                    |  |                          |        
|Other income:                       |  |                          |        
|Income from life insurance policies |  | $                        | 128,430
|Other expenses:                     |  |                          |        
|Stationery and office supplies      |  | 70,070                   |        
|Legal and professional              |  | 186,140                  |        
|Data processing                     |  |                          | 198,720

NOTE 16.PARENT COMPANY FINANCIAL INFORMATION

The following information presents the condensed
balance sheets, statements of income and cash flows of First Georgia Community Corp. as of and for the years ended December 31, 2002 and 2001:

CONDENSED
BALANCE SHEETS



|                                           |  | 2002       |            | 2001      |  
|------------------------------------------ |  | ---------- | ---------- | --------- | -
|                                           |  |            |            |           |  
|                                           |  |            |            |           |  
|Assets                                     |  |            |            |           |  
|Cash                                       |  | $          | 4,971,726  |           | $
|Investment in subsidiary                   |  | 11,640,485 |            | 9,538,892 |  
|Other assets                               |  | 208,222    |            | 37,568    |  
|                                           |  |            |            |           |  
|                                           |  |            |            |           |  
|Total assets                               |  | $          | 16,820,433 |           | $
|                                           |  |            |            |           |  
|                                           |  |            |            |           |  
|Liabilities                                |  |            |            |           |  
|Other borrowings                           |  | $          | 5,000,000  |           | $
|Other liabilities                          |  | 58,285     |            | 12,750    |  
|                                           |  |            |            |           |  
|                                           |  |            |            |           |  
|Total liabilities                          |  | 5,058,285  |            | 512,750   |  
|                                           |  |            |            |           |  
|Stockholders equity                       |  | 11,762,148 |            | 9,084,930 |  
|                                           |  |            |            |           |  
|                                           |  |            |            |           |  
|Total liabilities and stockholders equity |  | $          | 16,820,433 |           | $
|                                           |  |            |            |           |  

84



---

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16.PARENT COMPANY FINANCIAL INFORMATION (Continued)

CONDENSED STATEMENTS OF INCOME



|                                                                                 |  | 2002     |         | 2001    |  
|-------------------------------------------------------------------------------- |  | -------- | ------- | ------- | -
|                                                                                 |  |          |         |         |  
|Expenses                                                                         |  |          |         |         |  
|Salaries and employee benefits                                                   |  | $        | 13,200  |         | $
|Other expenses                                                                   |  | 96,595   |         | 41,873  |  
|                                                                                 |  |          |         |         |  
|Total expenses                                                                   |  | 109,795  |         | 56,173  |  
|                                                                                 |  |          |         |         |  
|                                                                                 |  |          |         |         |  
|Loss before income tax benefits and equity in undistributed income of
subsidiary |  | (109,795 | )       | (56,173 | )
|                                                                                 |  |          |         |         |  
|Income tax benefits                                                              |  | (41,400  | )       | (21,197 | )
|                                                                                 |  |          |         |         |  
|                                                                                 |  |          |         |         |  
|Loss before equity in undistributed income of subsidiary                         |  | (68,395  | )       | (34,976 | )
|                                                                                 |  |          |         |         |  
|Equity in undistributed income of subsidiary                                     |  | 269,589  |         | 971,320 |  
|                                                                                 |  |          |         |         |  
|                                                                                 |  |          |         |         |  
|Net income                                                                       |  | $        | 201,194 |         | $
|                                                                                 |  |          |         |         |  

CONDENSED STATEMENTS OF CASH FLOWS



|                                                                              |  | 2002       |           | 2001       |  
|----------------------------------------------------------------------------- |  | ---------- | --------- | ---------- | -
|                                                                              |  |            |           |            |  
|OPERATING ACTIVITIES                                                          |  |            |           |            |  
|Net income                                                                    |  | $          | 201,194   |            | $
|Adjustments to reconcile net income to net cash used in operating
activities: |  |            |           |            |  
|Undistributed income of subsidiary                                            |  | (269,589   | )         | (971,320   | )
|Net other operating activities                                                |  | (23,799    | )         | 20,398     |  
|                                                                              |  |            |           |            |  
|                                                                              |  |            |           |            |  
|Net cash used in operating activities                                         |  | (92,194    | )         | (14,578    | )
|                                                                              |  |            |           |            |  
|                                                                              |  |            |           |            |  
|INVESTING ACTIVITIES                                                          |  |            |           |            |  
|Investment in subsidiary                                                      |  | (1,500,000 | )         | (1,358,000 | )
|                                                                              |  |            |           |            |  
|                                                                              |  |            |           |            |  
|Net cash used in investing activities                                         |  | (1,500,000 | )         | (1,358,000 | )
|                                                                              |  |            |           |            |  
|                                                                              |  |            |           |            |  
|FINANCING ACTIVITIES                                                          |  |            |           |            |  
|Repayment of other borrowings                                                 |  | (500,000   | )         |           |  
|Proceeds from other borrowings                                                |  | 5,000,000  |           | 500,000    |  
|Proceeds from exercise of stock options                                       |  | 2,042,700  |           | 27,855     |  
|                                                                              |  |            |           |            |  
|                                                                              |  |            |           |            |  
|Net cash provided by financing activities                                     |  | 6,542,700  |           | 527,855    |  
|                                                                              |  |            |           |            |  
|                                                                              |  |            |           |            |  
|Net increase (decrease) in cash                                               |  | 4,950,506  |           | (844,723   | )
|                                                                              |  |            |           |            |  
|Cash at beginning of year                                                     |  | 21,220     |           | 865,943    |  
|                                                                              |  |            |           |            |  
|                                                                              |  |            |           |            |  
|Cash at end of year                                                           |  | $          | 4,971,726 |            | $
|                                                                              |  |            |           |            |  

85