2004 ANNUAL REPORT


                                [GRAPHIC OMITED]


                                  DECATUR FIRST
                                BANK GROUP, INC.




<PAGE>
<TABLE>
<CAPTION>
                         DECATUR FIRST BANK GROUP, INC.

                                Table of Contents


                                                             Page
                                                             ----
<S>                                                          <C>
To Our Shareholders . . . . . . . . . . . . . . . . . . . .     2
Selected Financial Data . . . . . . . . . . . . . . . . . .     3
Management's Discussion and Analysis of Financial Condition
    and Results of Operations . . . . . . . . . . . . . . .     4
Report of Independent Registered Public Accounting Firm . .    15
Consolidated Financial Statements . . . . . . . . . . . . .    16
Notes to Consolidated Financial Statements. . . . . . . . .    21
Corporate and Shareholder Information . . . . . . . . . . .    37
</TABLE>


Decatur  First  Bank  Group,  Inc.,  a Georgia Corporation (the "Company"), is a
holding  company  engaged  in  commercial  banking  primarily  in DeKalb County,
Georgia.  The Company currently has one subsidiary, Decatur First Bank, which is
active  in  retail  and  commercial  banking.

There  is  no  established public trading market for the Company's Common Stock.
As of March 23, 2005, the Company had 787 shareholders of record.

It  is the policy of the Board of Directors to reinvest earnings for such period
of  time as is necessary to ensure the success of the operations of the Company.
The  Company  has  no  current  plans to initiate payment of cash dividends, and
future  dividend  policy  will  depend  on  the  Company's  earnings,  capital
requirements,  financial  condition and other factors considered relevant by the
Board of Directors of the Company. The Company declared no dividends in 2004 and
is not expected to do so for the foreseeable future. Information on restrictions
on  the  amount of dividends payable by the Company and the bank appears in Note
13  to  the  Company's  Audited  Financial  Statements.

This report serves as our annual disclosure statement as required by the Federal
Deposit  Insurance  Corporation.  This  statement  has  not  been  reviewed,  or
confirmed  for  accuracy  or  relevance,  by  the  Federal  Deposit  Insurance
Corporation.  A  copy  of the Company's 2004 Annual Report on Form 10-KSB, filed
with  the  Securities  and Exchange Commission, is available at no charge to our
shareholders  upon  written  request  to  the  Company  at  1120 Commerce Drive,
Decatur,  Georgia  30030,  Attention:  Judy  B.  Turner.


<PAGE>
To our shareholders:

In December 2004, our board of directors approved a Plan of Reorganization,
which is designed to take Decatur First Bank Group, Inc. private by reducing its
number of shareholders to below 300.  Once we are a private company, we will
realize a savings of approximately $200,000 a year as a result of the
termination of our reporting obligations with the Securities and Exchange
Commission.  Under the plan, shareholders who own 500 or fewer shares of our
stock will receive $17.50 in cash in exchange for each of their shares of our
stock.  Those shares that are purchased by the Company will be retired and all
other shares will remain outstanding.

As our management team and board examined the advantages and disadvantages of
our status as a public company, it became apparent that in view of the limited
trading market for our stock, the compliance costs involved in remaining public
outweighed the potential benefits to our shareholders.  We also believe the plan
will enable us to pay a fair price and provide liquidity, without brokerage
charges, to those shareholders receiving cash for their shares.

After the reorganization, we will continue to provide audited financial
statements to our shareholders through the mail and by posting them on our web
site at www.decaturfirstbank.com.  We will also provide an unaudited mid-year
        ------------------------
financial statement to our shareholders.  We like to keep you informed of our
results and will continue to do so.

During 2004, we continued to expand by opening a full-service office in the
Wal-Mart Superstore located at Fairington and Panola Roads in Lithonia, Georgia
in July and in a temporary facility in Greensboro, Georgia in December.  We
decided to enter the Greensboro market, under the name of Lake Oconee Community
Bank, a division of Decatur First Bank, because of the success we've had with
the Loan Production Office that we opened there in the summer of 2003.  A
permanent building will be under construction this spring and will be on Highway
44, in the Park Place Office Park.  We have also received approval from the
banking regulators to open an office in the Wal-Mart in Madison, Georgia.  This
office is scheduled to open this summer.

As always, you may follow our progress by viewing our web site for the latest
information.  We appreciate your support and welcome your suggestions for how we
might improve your bank.

                                        Sincerely,

                                        /s/ Judy B. Turner

                                        Judy B. Turner
                                        President & CEO


                                        2
<PAGE>
<TABLE>
<CAPTION>
                          DECATUR FIRST BANK GROUP, INC.

                             SELECTED FINANCIAL DATA
                       (in thousands except per share data)


                                     2004       2003     2002     2001     2000
                                   ---------  --------  -------  -------  -------
<S>                                <C>        <C>       <C>      <C>      <C>
FOR THE YEAR
  Net interest income              $  4,200     3,611    3,362    2,977    2,810
  Provision for loan losses             335       185      400      510      250
  Noninterest income                    832       831      706      698      344
  Noninterest expense                 3,836     3,256    2,789    2,589    2,436
  Income taxes                          249       226      246      220      178
  Net earnings                     $    612       775      633      356      290

PER COMMON SHARE
  Basic earnings                   $    .66       .84      .68      .38      .31
  Diluted earnings                      .63       .82      .66      .38      .30
  Cash dividends declared                 -         -        -        -        -
  Book value                       $  12.07     11.56    11.01     9.94     9.53

AT YEAR END
  Loans, net                       $101,437    71,012   62,395   41,878   34,793
  Earning assets                    124,294    96,526   88,287   78,408   67,045
  Assets                            133,055   102,785   95,284   84,021   73,020
  Deposits                          111,298    83,748   74,445   64,660   58,642
  Stockholders' equity             $ 11,166    10,690   10,177    9,264    8,889
  Common shares outstanding             925       924      924      932      933

AVERAGE BALANCES
  Loans                            $ 86,746    68,704   49,293   39,215   31,440
  Earning assets                    110,619    94,094   81,304   77,794   54,420
  Assets                            117,429   100,518   86,446   83,233   59,144
  Deposits                           77,812    81,600   66,455   65,468   45,926
  Stockholders' equity             $ 10,900    10,598    9,626    9,250    8,573
  Weighted average shares
    outstanding                         925       924      932      932      939

KEY PERFORMANCE RATIOS
  Return on average assets              .52%      .77%     .73%     .43%     .49%
  Return on average stockholders'
    equity                             5.61%     7.31%    6.58%    3.86%    3.39%
  Net interest margin                  3.80%     3.84%    4.14%    3.83%    5.16%
</TABLE>


                                        3
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

                                     GENERAL

Decatur  First  Bank  Group,  Inc.  is  a  bank holding company headquartered in
Decatur,  Georgia  organized  to  own  all  of  the  common  stock  of  its bank
subsidiary,  Decatur  First  Bank.  The  principal  activity  of  the bank is to
provide  banking  services  to  domestic  markets, principally in DeKalb County,
Georgia.  The  bank  is primarily regulated by the Georgia Department of Banking
and Finance and the Federal Deposit Insurance Corporation and undergoes periodic
examinations  by  these  regulatory  agencies.  Our  bank  holding  company  is
regulated  by  the  Federal  Reserve  Bank  and  also  is  subject  to  periodic
examinations.

The  following  discussion  describes  our  results  of  operations  for 2004 as
compared  to  2003  and also analyzes our financial condition as of December 31,
2004  as  compared  to  December 31, 2003.  Like most community banks, we derive
most  of  our income from interest we receive on our loans and investments.  Our
primary  source of funds for making these loans and investments is our deposits,
on  which we pay interest.  Consequently, one of the key measures of our success
is  our  amount  of net interest income, or the difference between the income on
our  interest-earning  assets, such as loans and investments, and the expense on
our  interest-bearing liabilities, such as deposits.  Another key measure is the
spread  between  the yield we earn on these interest-earning assets and the rate
we  pay  on  our  interest-bearing  liabilities.

We  have  included  a  number  of  tables  to assist in our description of these
measures.  For  example,  the "Average Balances" table shows the average balance
during  2004 and 2003 of each category of our assets and liabilities, as well as
the yield we earned or the rate we paid with respect to each category.  A review
of this table shows that our loans typically provide higher interest yields than
do  other  types of interest earning assets, which is why we intend to channel a
substantial  percentage  of  our  earning  assets  into  our  loan  portfolio.
Similarly,  the  "Rate/Volume  Analysis"  table  helps demonstrate the impact of
changing interest rates and changing volume of assets and liabilities during the
years  shown.  We also track the sensitivity of our various categories of assets
and  liabilities  to  changes  in  interest  rates,  and  we  have  included  a
"Sensitivity  Analysis Table" to help explain this.  Finally, we have included a
number of tables that provide detail about our investment securities, our loans,
and  our  deposits.

Of  course,  there  are risks inherent in all loans, so we maintain an allowance
for  loan  losses  to  absorb  possible losses on existing loans that may become
uncollectible.  We establish and maintain this allowance by charging a provision
for  loan  losses  against our operating earnings.  In the following section, we
have  included  a detailed discussion of this process, as well as several tables
describing  our  allowance  for  loan  losses.

In  addition  to  earning  interest on our loans and investments, we earn income
through  fees  and  other  expenses we charge to our customers.  We describe the
various  components  of  this  noninterest  income,  as  well as our noninterest
expense,  in  the  following  discussion.

The  following  discussion and analysis also identifies significant factors that
have  affected  our  financial position and operating results during the periods
included  in  the  accompanying  financial statements.  We encourage you to read
this  discussion  and  analysis in conjunction with the financial statements and
the  related  notes  and the other statistical information also included in this
report.

                          CRITICAL ACCOUNTING POLICIES

We  have  adopted  various  accounting policies, which govern the application of
accounting  principles generally accepted in the United States of America in the
preparation  of  our  financial statements.  Our significant accounting policies
are  described  in  note  1  in  the  footnotes  to  the  consolidated financial
statements at December 31, 2004 included elsewhere in this annual report.

We  believe  that  the allowance for loan losses is a critical accounting policy
that  requires  the most significant judgments and estimates used in preparation
of  our  consolidated  financial  statements.  Please  refer  to  the portion of
management's  discussion  and  analysis  of  financial  condition and results of
operations that addresses the allowance for loan losses for a description of our
processes and methodology for determining the allowance for loan losses.


                                        4
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS, CONTINUED

                           FORWARD-LOOKING STATEMENTS

This  report  contains  "forward-looking  statements"  relating  to,  without
limitation,  future economic performance, plans and objectives of management for
future  operations,  and  projections of revenues and other financial items that
are  based  on  the  beliefs  of  management, as well as assumptions made by and
information  currently  available  to  management.  The  words  "may,"  "will,"
"anticipate," "should," "would," "believe," "contemplate," "expect," "estimate,"
"continue,"  and "intend," as well as other similar words and expressions of the
future,  are intended to identify forward-looking statements. Our actual results
may  differ  materially  from  the  results  discussed  in  the  forward-looking
statements,  and  our  operating  performance each quarter is subject to various
risks  and  uncertainties  that  are discussed in detail in our filings with the
Securities  and  Exchange  Commission,  including,  without  limitation:

     -    the  effects  of  future  economic  conditions;
     -    governmental  monetary and fiscal policies, as well as legislative and
          regulatory changes;
     -    changes  in  interest  rates  and  their  effect  on  the  level  and
          composition  of  deposits,  loan  demand,  and  the  values  of  loan
          collateral,  securities  and  other  interest-sensitive  assets  and
          liabilities;
     -    our  ability  to  control costs, expenses, and loan delinquency rates;
          and
     -    the  effects  of  competition  from  other  commercial banks, thrifts,
          mortgage  banking  firms,  consumer  finance  companies,  credit
          unions,  securities brokerage firms, insurance companies, money market
          and  other  mutual funds and other financial institutions operating in
          our  market  area  and  elsewhere,  including  institutions  operating
          regionally,  nationally,  and  internationally,  together  with  such
          competitors offering banking products and services by mail, telephone,
          computer and the Internet.

                              RESULTS OF OPERATIONS

Net  income for 2004 was $612,000 compared to $775,000 in 2003.  The decrease in
net  income  in  2004  compared  to  2003  was  primarily due to the increase in
noninterest  expenses  as  a  result of the bank's planned expansion into Greene
County,  Georgia.  Our  operational  results  depend  to  a  large degree on net
interest income, which is the difference between the interest income received on
investments (such as loans, investment securities, federal funds sold, etc.) and
the interest expense, which is paid on deposit liabilities.  Net interest income
was  $4,200,000  for  the year ended December 31, 2004 compared to $3,611,000 in
2003.

The provision for loan losses in 2004 was $335,000 compared to $185,000 in 2003.
The provision for loan losses reflects management's estimate of potential losses
inherent  in the loan portfolio and the creation of an allowance for loan losses
adequate  to  absorb  such  losses.

Other  operating  income  for  the year ended December 31, 2004 totaled $832,000
compared  to $831,000 in 2003.  Other operating income includes services charges
on  deposit  accounts,  income  from  our  mortgage  origination  affiliate  and
investment  security  gains.  Other  operating  expenses in 2004 were $3,836,000
compared  to  $3,256,000  in  2003.  The  largest  component  of other operating
expenses  is  salaries and benefits, which totaled $2,115,000 for the year ended
December  31,  2004  compared  to  $1,732,000  in 2003.  This increase is due to
increased  personnel  costs  necessary to operate our two new facilities: one at
the  intersection of Panola and Fairington Roads in metropolitan Atlanta in July
2004  and  the  other  in  Greene  County,  Georgia.  In  2003, we opened a loan
production  office  in  Greene  County,  Georgia.  In late 2004, this office was
converted  into  a  full  service  branch.  We  have plans to establish a larger
branch  facility  in  this  market  in  2005.

NET  INTEREST  INCOME

For  the  years  ended  December  31, 2004 and 2003, net interest income totaled
$4,200,000  and $3,611,000, respectively.  Interest income from loans, including
fees was $5,414,000 representing a yield of 6.24% in 2004 compared to a yield of
6.41%  in  2003.  Decreases  in  the  prime  lending rate in 2003 influenced the
decrease  in  yield  on loans.  Interest expense totaled $1,905,000 for the year
ended December 31, 2004 compared to $1,593,000 in 2003.  The net interest margin
realized  on  earning  assets and the interest rate spread were 3.80% and 3.31%,
respectively,  for the year ended December 31, 2004 compared to an interest rate
margin  of  3.84%  and  interest  rate  spread  of  3.29%  in  2003.


                                        5
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS, CONTINUED

AVERAGE BALANCES AND INTEREST RATES

The  table  below  shows  the  average  balance outstanding for each category of
interest  earning  assets and interest-bearing liabilities for 2004 and 2003 and
the average rate of interest earned or paid thereon.  Average balances have been
derived  from  the  daily  balances  throughout  the  period  indicated.

<TABLE>
<CAPTION>
                                           For the Year Ended December 31,        For the Year Ended December 31,
                                        -------------------------------------  -------------------------------------
                                                          2004                                   2003
                                        -------------------------------------  -------------------------------------
                                                  (Amounts presented in                 (Amounts presented in
                                                       thousands)                             thousands)

                                           Average                   Yield/       Average                   Yield/
                                           Balance      Interest      Rate        Balance      Interest      Rate
                                        --------------  ---------  ----------  --------------  ---------  ----------
<S>                                     <C>             <C>        <C>         <C>             <C>        <C>
Assets:
  Interest earning assets:
    Loans (including loan fees)         $      86,746       5,414       6.24%  $      68,704       4,402       6.41%
    Investment securities                      17,151         589       3.43%         19,924         719       3.61%
    Interest-bearing deposits                   2,597          53       2.04%          2,597          45       1.73%
    Federal funds sold                          4,125          49       1.19%          2,869          38       1.32%
                                        --------------  ---------              --------------  ---------
  Total interest earning assets               110,619       6,105       5.52%         94,094       5,204       5.53%
  Other non-interest earnings assets            6,810                                  6,424
                                        --------------                         --------------

        Total assets                    $     117,429                          $     100,518
                                        ==============                         ==============

Liabilities and stockholders' equity:
  Interest-bearing liabilities:
    Deposits:
      Interest-bearing demand and
        savings                         $      27,009         101       0.37%  $      26,733         125       0.47%
      Time                                     50,803       1,437       2.83%         36,283       1,068       2.94%
    Other borrowings                            8,302         367       4.42%          7,978         400       5.01%
                                        --------------  ---------              --------------  ---------
  Total interest-bearing liabilities           86,114       1,905       2.21%         70,994       1,593       2.24%
                                                        ---------                              ---------
  Other non-interest bearing
    liabilities                                20,415                                 18,926
  Stockholders' equity                         10,900                                 10,598
                                        --------------                         --------------

        Total liabilities and
          stockholders' equity          $     117,429                          $     100,518
                                        ==============                         ==============

Excess of interest-earning assets
  over interest bearing liabilities     $      24,505                          $      23,100
                                        ==============                         ==============

Ratio of interest-earning assets
   to interest-bearing liabilities                128%                                   133%

Net interest income                                         4,200                                  3,611
                                                        =========                              =========

Net interest spread                                                     3.31%                                  3.29%
                                                                   ==========                             ==========

Net interest margin                                                     3.80%                                  3.84%
                                                                   ==========                             ==========
</TABLE>

Non-accrual  loans  are  included  in  average  loan balances during the periods
presented as the balances were not significant.


                                        6
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS, CONTINUED

VOLUME/RATE  ANALYSIS

Net  interest  income  can  also  be analyzed in terms of the impact of changing
rates  and  changing  volume.  The following table describes the extent to which
changes  in  interest rates and changes in the volume of interest-earning assets
and  interest-bearing liabilities have affected our interest income and interest
expense  during  the  periods  indicated.

<TABLE>
<CAPTION>
                                                      2004 COMPARED TO 2003
                                              INCREASE (DECREASE) DUETO CHANGES IN
                                                                              NET
                                             VOLUME          RATE           CHANGE
                                          -------------  -------------  --------------
<S>                                       <C>            <C>            <C>
Interest income on:
    Loans (including loan fees)           $      1,129           (117)          1,012
    Investment securities                          (96)           (34)           (130)
    Interest-bearing deposits                        -              8               8
    Federal funds sold                              15             (4)             11
                                          -------------  -------------  --------------
                                                 1,048           (147)            901
                                          -------------  -------------  --------------

Interest expense on:
    Interest-bearing demand and savings              1            (25)            (24)
    Time                                           412            (43)            369
    Other borrowings                                16            (49)            (33)
                                          -------------  -------------  --------------
                                                   429           (117)            312
                                          -------------  -------------  --------------

                                          $        619            (30)            589
                                          =============  =============  ==============
</TABLE>

INTEREST RATE SENSITIVITY AND ASSET LIABILITY MANAGEMENT

Interest  rate sensitivity measures the timing and magnitude of the repricing of
assets  compared  with  the repricing of liabilities and is an important part of
asset/liability management of a financial institution. The objective of interest
rate sensitivity management is to generate stable growth in net interest income,
and  to  control  the  risks associated with interest rate movements. Management
constantly  reviews  interest  rate risk exposure and the expected interest rate
environment so that adjustments in interest rate sensitivity can be timely made.
Since  the  assets  and  liabilities  of a bank are primarily monetary in nature
(payable  in fixed, determinable amounts), the performance of a bank is affected
more  by  changes  in interest rates than by inflation. Interest rates generally
increase  as the rate of inflation increases, but the magnitude of the change in
rates  may  not  be  the  same.

Net  interest  income  is  the  primary  component  of  net income for financial
institutions.  Net  interest  income  is affected by the timing and magnitude of
repricing  of as well as the mix of interest sensitive and noninterest sensitive
assets  and liabilities. "Gap" is a static measurement of the difference between
the  contractual  maturities or repricing dates of interest sensitive assets and
interest  sensitive  liabilities  within  the following twelve months. Gap is an
attempt  to  predict  the  behavior of the bank's net interest income in general
terms  during  periods of movement in interest rates. In general, if the bank is
asset  sensitive,  more of its interest sensitive assets are expected to reprice
within  twelve  months  than  its  interest  sensitive liabilities over the same
period.  In a rising interest rate environment, assets repricing more quickly is
expected  to  enhance  net  interest  income. Alternatively, decreasing interest
rates would be expected to have the opposite effect on net interest income since
assets  would  theoretically  be  repricing at lower interest rates more quickly
than  interest  sensitive  liabilities.  Although  it  can  be used as a general
predictor,  Gap  as  a  predictor  of  movements  in  net  interest  income  has
limitations  due  to the static nature of its definition and due to its inherent
assumption  that  all  assets  will  reprice  immediately  and  fully  at  the
contractually  designated  time.  At December 31, 2004, the bank, as measured by
Gap,  is  in  an  liability  sensitive  position.  Management  has several tools
available  to  it  to  evaluate and affect interest rate risk, including deposit
pricing  policies  and  changes  in  the  mix  of  various  types  of assets and
liabilities.


                                        7
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS, CONTINUED

We also measure the actual effects that repricing opportunities have on earnings
through  simulation  modeling,  referred to as earnings at risk.  For short-term
interest  rate  risk,  the  bank's  model  simulates the impact of balance sheet
strategies  on  net  interest income, pre-tax income, and net income.  The model
includes  interest  rate ramps to test the impact of rising and falling interest
rates  on  projected  earnings.  Rates  are  ramped  over  a one-year period and
include a level rate scenario as the benchmark with rising and falling 200 basis
point  scenarios  for  comparison.  The bank determines the assumptions that are
used in the model.  The December 31, 2004 model reflects an increase of 6.54% in
net  interest  income in a 200 basis point increase in interest rates and a .64%
increase in net interest income in a 200 basis point decrease in interest rates.

The  following  table  summarizes  the  amounts  of  interest-earning assets and
interest-bearing liabilities outstanding at December 31, 2004, that are expected
to  mature,  prepay, or reprice in each of the future time periods shown. Except
as  stated  below,  the  amount  of assets or liabilities that mature or reprice
during  a  particular  period  was determined in accordance with the contractual
terms  of  the  asset  or  liability.  Adjustable rate loans are included in the
period  in  which interest rates are next scheduled to adjust rather than in the
period  in  which  they  are  due,  and  fixed  rate  loans  and mortgage-backed
securities  are  included  in  the  periods  in which they are anticipated to be
repaid  based  on  scheduled  maturities.  The  bank's  savings  accounts  and
interest-bearing  demand accounts (NOW and money market deposit accounts), which
are generally subject to immediate withdrawal, are included in the "Three Months
or  Less"  category, although historical experience has proven these deposits to
be  more  stable  over  the  course  of  a  year.

<TABLE>
<CAPTION>
                                                               At December 31, 2004
                                                             Maturing or Repricing in
                                            ------------------------------------------------------
                                                              (dollars in thousands)

                                             Three
                                             Months     Four Months    1 to 5    Over 5
                                             or Less   to 12 Months    Years      Years     Total
                                            ---------  -------------  --------  ---------  -------
<S>                                         <C>        <C>            <C>       <C>        <C>
Interest-earning assets:
    Federal funds sold                      $  2,359              -         -          -     2,359
    Investment securities                                       499    10,789      4,710    15,998
    Interest-bearing deposits                  2,688              -         -          -     2,688
    Loans                                     55,816          9,262    36,744        818   102,640
                                            ---------  -------------  --------  ---------  -------

Total interest-earning assets                 60,863          9,761    47,533      5,528   123,685
                                            ---------  -------------  --------  ---------  -------

Interest-bearing liabilities:
  Deposits:
    Savings and demand                        26,714              -         -          -    26,714
    Time deposits                              8,068         34,771    20,405          -    63,244
    Federal funds purchased                    2,000              -         -          -     2,000
    Federal Home Loan Bank advances            2,500              -       480      5,000     7,980
                                            ---------  -------------  --------  ---------  -------

Total interest-bearing liabilities            39,282         34,771    20,885      5,000    99,938
                                            ---------  -------------  --------  ---------  -------

Interest sensitive difference per period      21,581        (25,010)   26,648        528    23,747
                                                                                           =======
Cumulative interest sensitivity difference  $ 21,581         (3,429)   23,219     23,747
                                            =========  =============  ========  =========
Cumulative difference to total assets             16%           (3)%       17%        18%
                                            =========  =============  ========  =========
</TABLE>

At  December  31, 2004, the difference between the bank's liabilities and assets
repricing  or  maturing  within  one  year  was  $3,429,000.

Certain  shortcomings  are  inherent  in the method of analysis presented in the
foregoing  table.  For example, although certain assets and liabilities may have
similar  maturities  or periods of repricing, they may reflect changes in market
interest  rates  differently.  Additionally,  certain  assets,  such  as
adjustable-rate  mortgages,  have  features  that  restrict  changes in interest
rates,  both on a short-term basis and over the life of the asset. Other factors
which  may  affect the assumptions made in the table include changes in interest
rates,  pre-payment rates, early withdrawal levels, and the ability of borrowers
to  service  their  debt.


                                        8
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS, CONTINUED

PROVISION AND ALLOWANCE FOR LOAN LOSSES

The  provision  for  loan  losses  is  the  charge  to  operating  earnings that
management believes is necessary to maintain the allowance for loan losses at an
adequate  level.  The  provision  charged  to  expense was $335,000 for the year
ended  December 31, 2004 as compared to $185,000 for the year ended December 31,
2003.  The  increase  in  the  provision  was due to growth in loans during 2004
compared  with  2003.  The loan portfolio increased by approximately $31 million
during  the  year  ended  December  31,  2004  as  compared  to  an  increase of
approximately  $9  million  in 2003.  The allowance for loan losses was 1.17% of
gross  loans  at  December 31, 2004 and was 1.25% of gross loans at December 31,
2003.  There  are  risks  inherent  in  making  all  loans, including risks with
respect  to  the  period of time over which loans may be repaid, risks resulting
from changes in economic and industry conditions, risks inherent in dealing with
individual borrowers, and, in the case of a collateralized loan, risks resulting
from  uncertainties  about  the  future  value of the collateral.  We anticipate
maintaining  an  allowance  for  loan  losses  based  on,  among  other  things,
historical experience, an evaluation of economic conditions, and regular reviews
of delinquencies and loan portfolio quality.  Our judgment about the adequacy of
the  allowance  is based upon a number of assumptions about future events, which
we  believe  to  be  reasonable,  but which may not prove to be accurate.  Thus,
there  is  a  risk that charge-offs in future periods could exceed the allowance
for  loan  losses  or that substantial additional increases in the allowance for
loan losses could be required.  Additions to the allowance for loan losses would
result in a decrease of our net income and, possibly, our capital.

The  following  table  summarizes  information concerning the allowance for loan
losses:

<TABLE>
<CAPTION>
                                                               December 31,
                                               -------------------------------------------
                                                   2004            2003           2002
                                               -------------  --------------  ------------
                                                   (Amounts are presented in thousands)
<S>                                            <C>            <C>             <C>
Balance at beginning of year                   $        899             812           595
Charge-offs:
  Commercial                                             12              11            26
  Real estate - construction                              -               -           157
  Real estate - mortgage                                  -              89             -
  Consumer                                               51              16             -
                                               -------------  --------------  ------------

    Total charge-offs                                    63             116           183

Recoveries:
  Commercial                                             10              14             -
  Real estate - construction                              -               -             -
  Real estate - mortgage                                  -               -             -
  Consumer                                               22               4             -
                                               -------------  --------------  ------------

    Total recoveries                                     32              18             -
                                               -------------  --------------  ------------

Net charge-offs                                          31              98           183

Additions charged to operations                         335             185           400
                                               -------------  --------------  ------------

Balance at end of year                         $      1,203             899           812
                                               =============  ==============  ============
Ratio of net charge-offs during the period to
  average loans outstanding during the period           .04%            .14%          .37%
                                               =============  ==============  ============
</TABLE>

The following table summarizes past due and non-accrual loans, other real estate
and repossessions, and income that would have been reported on non-accrual loans
as of December 31, 2004 and 2003 (amounts are presented in thousands):

<TABLE>
<CAPTION>
                                           December 31,
                                         ---------------
                                          2004     2003
                                         -------  ------
<S>                                      <C>      <C>
Other real estate and repossessions      $   611       -
Accruing loans 90 days or more past due        -       -
Non-accrual loans                            522      35
Interest on non-accrual loans which
  would have been reported                     3       1
</TABLE>


                                        9
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS, CONTINUED

NONINTEREST INCOME AND EXPENSE

Noninterest  income  for  the  year  ended December 31, 2004 totaled $832,000 as
compared  to  $831,000  for  the  year  ended  December  31,  2003.  The largest
component  of  noninterest  income is service charges on deposit accounts, which
totaled  $613,000  in  2004  and  $400,000 in 2003.  This increase was due to an
increase  in  our  customer  base  and  the associated increase in deposits.  We
recognized  $26,000  in  gains on the sale of securities during 2004 compared to
gains  of  $291,000  in 2003.  Mortgage origination income decreased by $106,000
during  2004  due  to  a  decrease  in  mortgage  originations  by  our mortgage
affiliate.  Mortgage  origination  income  in 2003 was higher due to a declining
interest  rate  environment.

Total noninterest expense for the year ended December 31, 2004 was $3,836,000 as
compared  to $3,256,000 for the same period in 2003.  Salaries and benefits, the
largest  component of noninterest expense, totaled $2,115,000 for the year ended
December  31,  2004,  compared  to  $1,732,000  for  the same period a year ago.
Salary and benefits expense primarily increased due to the addition of employees
in  our  Panola  and  Fairington Roads office in July 2004, our office in Greene
County,  Georgia,  and  normal  salary increases.  Other operating expenses were
$1,385,000  for  the  year ended December 31, 2004 as compared to $1,233,000 for
the  year ended December 31, 2003.  This increase in noninterest expense was due
to  the  continued  growth  of  the  bank.  The  bank anticipates an increase in
occupancy  and equipment expense during 2005 due to the planned expansion of the
branch  in  Greene  County,  Georgia.

INCOME  TAXES

For  the  year  ended  December  31,  2004,  we recognized income tax expense of
$249,000  compared  to  income  tax  expense of $226,000 in 2003.  Our effective
income  tax  rate  was approximately 29% in 2004 and 23% in 2003.  Our effective
tax  rate  increased  in  2004  due to less income from non-taxable investments.

                               FINANCIAL CONDITION

Total  assets  increased  $30,270,000, or 29% from December 31, 2003 to December
31, 2004.  The primary source of growth in assets was net loans, which increased
$30,425,000  or  43%,  during  the  year  ended  December  31, 2004.  Investment
securities available-for-sale decreased from $17,019,000 at December 31, 2003 to
$15,998,000  at  December  31,  2004.  This  decrease  in  investment securities
available-for-sale  was the result of the loan growth.  Total deposits increased
$27,550,000,  or  33%  during  2004.

INTEREST-EARNING  ASSETS

LOANS

Gross  loans  totaled  $102,640,000  at  December  31,  2004,  an  increase  of
$30,730,000 or 43% since December 31, 2003. The largest increase in loans was in
real estate-mortgage loans, which increased $23,837,000 or 51% to $70,241,000 at
December  31,  2004.  The  majority of these loans are owner occupied commercial
buildings.  Real  estate-construction  loans  increased  $6,443,000 during 2004.
Balances  within  the  major loans receivable categories as of December 31, 2004
and  December  31,  2003  are  as  follows:

<TABLE>
<CAPTION>
                                2004               2003
                            ------------        ----------
<S>                         <C>           <C>   <C>         <C>
Commercial and financial    $ 10,459,001   10%  10,957,599    15%
Real estate - mortgage        70,240,763   69%  46,404,071    64%
Real estate - construction    18,348,562   18%  11,905,865    17%
Consumer                       3,591,884    3%   2,643,140     4%
                            ------------  ----  ----------  -----

                            $102,640,210  100%  71,910,675   100%
                            ============  ====  ==========  =====
</TABLE>

As  of  December  31, 2004, maturities of loans in the indicated classifications
were  as  follows:

<TABLE>
<CAPTION>
                            Real Estate
               Commercial   Construction    Total
               -----------  ------------  ----------
<S>            <C>          <C>           <C>
Maturity
--------
Within 1 year  $ 6,982,966    16,821,210  23,804,176
1 to 5 years     3,132,178     1,527,352   4,659,530
Over 5 years       343,857             -     343,857
               -----------  ------------  ----------

  Totals       $10,459,001    18,348,562  28,807,563
               ===========  ============  ==========
</TABLE>


                                       10
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS, CONTINUED

As  of  December  31,  2004,  the  interest  terms  of  loans  in  the indicated
classification for the indicated maturity ranges are as follows:

<TABLE>
<CAPTION>
                            Fixed Interest   Variable Interest
                                 Rates             Rates          Total
                            ---------------  -----------------  ---------
<S>                         <C>              <C>                <C>
Commercial
  1 to 5 years              $     3,059,585             72,593  3,132,178
  Over 5 years                       15,184            328,673    343,857

Real estate - construction
  1 to 5 years                      554,318            973,034  1,527,352
                            ---------------  -----------------  ---------

                            $     3,629,087          1,374,300  5,003,387
                            ===============  =================  =========
</TABLE>

INVESTMENT SECURITIES

Investment  securities  available-for-sale  decreased to $15,998,000 at December
31, 2004 from $17,019,000 at December 31, 2003.  This decrease was the result of
sales  of  investments  during  2004  to  fund  loan  growth.  All of the bank's
marketable  investment  securities  were  designated  as  available-for-sale  at
December  31,  2004.

The  following  table  presents the investments by category at December 31, 2004
and  2003  (Amounts  are  presented  in  thousands):

<TABLE>
<CAPTION>
                                                2004                       2003
                                   ---------------------------  --------------------------
                                                    Estimated                   Estimated
                                   Amortized Cost   Fair Value  Amortized Cost  Fair Value
                                   ---------------  ----------  --------------  ----------
<S>                                <C>              <C>         <C>             <C>
United States government agencies  $         9,477       9,428           5,870       5,948
Mortgage-backed                              4,647       4,538           6,540       6,436
State, county and municipals                 2,009       2,032           4,510       4,635
                                   ---------------  ----------  --------------  ----------

                                   $        16,133      15,998          16,920      17,019
                                   ===============  ==========  ==============  ==========
</TABLE>

The following table presents the maturities of investment securities at carrying
value  and  the  weighted  average yields for each range of maturities presented
(Amounts  are  presented  in  thousands):

<TABLE>
<CAPTION>
                                     US       Weighted      State     Weighted    Mortgage    Weighted
                                 Government    Average     County      Average     Backed      Average
                                                             and
                                  Agencies     Yields    Municipals    Yields    Securities    Yields
                                 -----------  ---------  -----------  ---------  -----------  ---------
<S>                              <C>          <C>        <C>          <C>        <C>          <C>
Maturities at December 31, 2004
-------------------------------

Within 1 year                    $       258      5.50%  $       241      4.25%  $         -         -
After 1 through 5 years                6,056      3.43%        1,004      3.44%        3,729      3.15%
After 5 through 10 years               3,114      4.12%          391      3.35%          581      3.18%
After 10 years                             -                     396      4.47%          228      2.21%
                                 -----------             -----------             -----------

Totals                           $     9,428             $     2,032             $     4,538
                                 ===========             ===========             ===========
</TABLE>


                                       11
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS, CONTINUED

DEPOSITS

At  December  31,  2004  total  deposits  increased  by $27,550,000, or 33% from
December 31, 2003.   Noninterest-bearing demand deposits increased $1,252,000 or
6%  and  interest-bearing  deposits  increased  $26,298,000  or  41%.

Balances  within  the  major  deposit  categories  as  of  December 31, 2004 and
December  31,  2003  as  follows:

<TABLE>
<CAPTION>
                                         2004         2003
                                     ------------  ----------
<S>                                  <C>           <C>
Noninterest-bearing demand deposits  $ 21,340,814  20,088,794
Interest-bearing demand deposits       24,456,727  25,941,961
Savings deposits                        2,257,194   2,962,890
Time                                   41,161,678  20,215,641
Time over $100,000                     22,082,038  14,538,706
                                     ------------  ----------

                                     $111,298,451  83,747,992
                                     ============  ==========
</TABLE>

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

<TABLE>
<CAPTION>
                                                      December 31,
                                     --------------------------------------------
                                               2004                   2003
                                     ----------------------  --------------------
                                         (Amounts are presented in thousands)

                                      Amount       Rate        Amount      Rate
                                     --------  ------------  ----------  --------
<S>                                  <C>       <C>           <C>         <C>
Noninterest-bearing demand           $ 20,037            -       18,584        -
Interest-bearing demand and savings    27,009         0.37%      26,733     0.47%
Time deposits                          50,803         2.83%      36,283     2.94%
                                     --------                ----------

  Totals                             $ 97,849                    81,600
                                     ========                ==========
</TABLE>

Maturities of time certificates of deposit of $100,000 or more outstanding at
December 31, 2004, are summarized as follows:

<TABLE>
<CAPTION>
<S>                        <C>
Within 3 months            $ 3,327,837
After 3 through 6 months     4,171,552
After 6 through 12 months    4,047,817
After 12 months             10,534,832
                           -----------

          Total            $22,082,038
                           ===========
</TABLE>

CAPITAL  RESOURCES

Total  shareholders'  equity  increased from $10,690,000 at December 31, 2003 to
$11,166,000  at  December  31,  2004.  This  increase  was  attributable  to net
earnings  for  the period partially offset by a decrease of $145,000 in the fair
value  of  securities  available-for-sale,  net  of  tax.

Bank  holding companies, such as us, and their banking subsidiaries are required
by  banking regulators to meet certain minimum levels of capital adequacy, which
are  expressed  in the form of certain ratios.  Capital is separated into Tier 1
capital  (essentially  common  shareholders'  equity less intangible assets) and
Tier  2  capital  (essentially the allowance for loan losses limited to 1.25% of
risk-weighted  assets).  The  first two ratios, which are based on the degree of
credit  risk  in  our  assets, provide the weighting of assets based on assigned
risk  factors  and  include off-balance sheet items such as loan commitments and
stand-by  letters  of  credit.


                                       12
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS, CONTINUED

The  ratio  of  Tier 1 capital to risk-weighted assets must be at least 4.0% and
the ratio of total capital (Tier 1 capital plus Tier 2 capital) to risk-weighted
assets  must  be  at  least  8.0%.  The  capital  leverage ratio supplements the
risk-based  capital  guidelines.

Banks  and  bank  holding  companies are required to maintain a minimum ratio of
Tier  1  capital  to  adjusted  quarterly  average  total  assets  of  3.0%.

The  following table summarizes the bank's risk-based capital ratios at December
31,  2004:

<TABLE>
<CAPTION>
<S>                                         <C>
Tier 1 capital (to risk-weighted assets)  10.27%
Total capital (to risk-weighted assets)   11.39%
Tier 1 capital (to total average assets)   8.63%
</TABLE>

LIQUIDITY

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

Cash  and  cash  equivalents  as  of December 31, 2004 decreased $2,079,000 from
December  31,  2003. Cash provided by operating activities totaled $1,200,000 in
2004,  while  inflows  from financing activities totaled $29,550,000, which were
attributable  to  net  deposit increases of $27,550,000 and an increase in other
borrowings  of  $2,000,000.

During  2004,  investing  activities  used  $32,830,000.  Investing  activities
included  net loans made to customers of approximately $31,371,000, purchases of
investment securities available-for-sale of $6,434,000 and purchases of premises
and  equipment  of  $1,247,000,  partially  offset  by  maturities  and sales of
investment  securities  available-for-sale  of  approximately  $7,155,000.

OFF  BALANCE  SHEET  ARRANGEMENTS

We  are  a  party  to  financial  instruments with off-balance-sheet risk in the
normal  course  of business to meet the financing needs of our customers.  These
financial  instruments  consist  of  commitments  to  extend  credit and standby
letters  of  credit.  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.  Standby  letters of credit are written conditional commitments issued
by  the  bank to guarantee the performance of a customer to a third party. Those
guarantees  are  primarily  issued  to  support  public  and  private  borrowing
arrangements.  Most letters of credit extend for less than one year.  The credit
risk  involved  in  issuing  letters  of  credit is essentially the same as that
involved  in extending loan facilities to customers.  Commitments generally have
fixed expiration dates or other termination clauses and may require payment of a
fee.  A commitment involves, to varying degrees, elements of credit and interest
rate  risk  in  excess  of  the  amount  recognized  in the balance sheets.  Our
exposure  to  credit  loss in the event of non-performance by the other party to
the  instrument  is  represented  by  the  contractual  notional  amount  of the
instrument.

Since  certain  commitments are expected to expire without being drawn upon, the
total  commitment amounts do not necessarily represent future cash requirements.
We  use the same credit policies in making commitments to extend credit as we do
for  on-balance-sheet  instruments.  Collateral  held  for commitments to extend
credit  varies  but may include accounts receivable, inventory, property, plant,
equipment,  and  income-producing  commercial  properties.

The following table summarizes our off-balance-sheet financial instruments whose
contract  amounts  represent  credit  risk  as  of  December  31,  2004:

     Commitments to extend credit     $     19,377,000
     Standby letters of credit        $      1,416,000

Management is not aware of any significant concentrations of loans to classes of
borrowers or industries that would be affected similarly by economic conditions.
Although  the bank's loan portfolio is diversified, a substantial portion of its
borrowers'  ability  to  honor  the  terms  of  their  loans is dependent on the
economic  conditions  in  DeKalb County and Greene County and surrounding areas.


                                       13
<PAGE>
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS, CONTINUED

The bank maintains relationships with correspondent banks that can provide funds
to  it  on  short  notice,  if needed. Presently, the bank has arrangements with
commercial banks for short term unsecured advances up to $7,200,000.

INFLATION

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

SELECTED RATIOS

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

<TABLE>
<CAPTION>
                                  2004    2003
                                  -----  ------
<S>                               <C>    <C>
Net income to:
  Average stockholders' equity    5.61%   7.31%
  Average assets                   .52%    .77%
Dividends to net income              -       -
Average equity to average assets  9.28%  10.54%
</TABLE>

RECENT ACCOUNTING PRONOUNCEMENTS

Accounting  standards  that  have  been  issued  or  proposed  by  the Financial
Accounting  Standards  Board  and  other  standard  setting entities that do not
require  adoption until a future date are not expected to have a material impact
on  our  consolidated  financial  statements  upon  adoption.


                                       14
<PAGE>
                                 [LOGO OMITTED]
                            Porter Keadle Moore, LLP
                            ------------------------


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the Board of Directors
Decatur First Bank Group, Inc.
Decatur, Georgia

We  have  audited  the accompanying consolidated balance sheets of Decatur First
Bank  Group,  Inc.  and  subsidiary  as  of  December 31, 2004 and 2003, and the
related  statements  of earnings, comprehensive income, changes in shareholders'
equity  and  cash flows for each of the three years in the period ended December
31,  2004.  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 the standards of the Public Company
Accounting  Oversight  Board  (United  States).  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 Decatur First Bank
Group,  Inc.  and subsidiary as of December 31, 2004 and 2003 and the results of
their  operations and their cash flows for each of the three years in the period
ended  December  31,  2004  in  conformity  with accounting principles generally
accepted  in  the  United  States  of  America.


                                         /s/  Porter Keadle Moore, LLP

Atlanta, Georgia
February 11, 2005




                          Certified Public Accountants
--------------------------------------------------------------------------------
Suite 1800  235 Peachtree Street NE   Atlanta, Georgia 30303  Phone 404-588-4200
                          Fax 404-588-4222  www.pkm.com


                                       15
<PAGE>
<TABLE>
<CAPTION>
                                  DECATUR FIRST BANK GROUP, INC.
                                          AND SUBSIDIARY
                                    CONSOLIDATED BALANCE SHEETS

                                    DECEMBER 31, 2004 AND 2003


                                                                           2004           2003
                                                                       -------------  ------------
<S>                                                                    <C>            <C>
                                              Assets
                                              ------

Cash and due from banks, including reserve requirements of
  $586,000 and $564,000, respectively                                  $  3,544,032     2,713,089
Federal funds sold                                                        2,358,000     5,268,000
                                                                       -------------  ------------

        Cash and cash equivalents                                         5,902,032     7,981,089

Interest-bearing deposits                                                 2,688,052     1,755,094
Investment securities available-for-sale                                 15,998,244    17,018,541
Other investments                                                           609,893       573,512
Loans, net                                                              101,436,931    71,011,524
Premises and equipment, net                                               3,403,404     2,368,264
Accrued interest receivable and other assets                              3,016,818     2,077,385
                                                                       -------------  ------------

                                                                       $133,055,374   102,785,409
                                                                       =============  ============

                              Liabilities and Shareholders' Equity
                              ------------------------------------

Deposits:
  Demand                                                               $ 21,340,814    20,088,794
  Money market and NOW accounts                                          24,456,727    25,941,961
  Savings                                                                 2,257,194     2,962,890
  Time                                                                   41,161,678    20,215,641
  Time over $100,000                                                     22,082,038    14,538,706
                                                                       -------------  ------------

        Total deposits                                                  111,298,451    83,747,992

Federal funds purchased                                                   2,000,000             -
Federal Home Loan Bank advances                                           7,980,000     7,980,000
Accrued interest payable and other liabilities                              610,563       367,123
                                                                       -------------  ------------

        Total liabilities                                               121,889,014    92,095,115
                                                                       -------------  ------------

Commitments

Shareholders' equity:
  Preferred stock, no par value; 2,000,000 shares
    authorized; no shares issued and outstanding                                  -             -
  Common stock, par value $5; 10,000,000 shares authorized;
    945,616 and 945,057 shares issued in 2004 and 2003, respectively      4,728,080     4,725,285
  Additional paid-in capital                                              4,702,817     4,696,097
  Retained earnings                                                       2,079,137     1,467,580
  Treasury stock, at cost; 20,600 shares in 2004 and 2003                  (259,950)     (259,950)
  Accumulated other comprehensive income (loss)                             (83,724)       61,282
                                                                       -------------  ------------

        Total shareholders' equity                                       11,166,360    10,690,294
                                                                       -------------  ------------

                                                                       $133,055,374   102,785,409
                                                                       =============  ============
</TABLE>

See accompanying notes to consolidated financial statements.


                                       16
<PAGE>
<TABLE>
<CAPTION>
                                DECATUR FIRST BANK GROUP, INC.
                                        AND SUBSIDIARY
                             CONSOLIDATED STATEMENTS OF EARNINGS

                     FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002


                                                                2004       2003       2002
                                                             ----------  ---------  ---------
<S>                                                          <C>         <C>        <C>
Interest income:
  Interest and fees on loans                                 $5,413,701  4,402,324  3,547,850
  Interest on investment securities:
    Taxable                                                     476,123    471,491    900,455
    Nontaxable                                                  112,534    247,237    230,967
  Other interest                                                102,575     83,153    134,294
                                                             ----------  ---------  ---------

        Total interest income                                 6,104,933  5,204,205  4,813,566
                                                             ----------  ---------  ---------

Interest expense:
  Interest on money market and NOW accounts                      92,499    113,969    146,472
  Interest on savings and time deposits                       1,445,641  1,079,511    894,282
  Other                                                         367,204    399,972    410,717
                                                             ----------  ---------  ---------

        Total interest expense                                1,905,344  1,593,452  1,451,471
                                                             ----------  ---------  ---------

        Net interest income                                   4,199,589  3,610,753  3,362,095

Provision for loan losses                                       335,000    185,000    400,000
                                                             ----------  ---------  ---------

        Net interest income after provision for loan losses   3,864,589  3,425,753  2,962,095
                                                             ----------  ---------  ---------

Other income:
  Service charges on deposit accounts                           613,116    400,002    390,254
  Gain on sale of securities                                     26,305    130,934    119,349
  Other income                                                  192,694    300,130    196,789
                                                             ----------  ---------  ---------

        Total other income                                      832,115    831,066    706,392
                                                             ----------  ---------  ---------

Other expenses:
  Salaries and employee benefits                              2,114,764  1,732,193  1,469,693
  Occupancy and equipment                                       335,485    291,252    279,142
  Other operating                                             1,385,310  1,232,884  1,040,194
                                                             ----------  ---------  ---------

        Total other expenses                                  3,835,559  3,256,329  2,789,029
                                                             ----------  ---------  ---------

        Earnings before income taxes                            861,145  1,000,490    879,458

Income tax expense                                              249,588    225,603    246,194
                                                             ----------  ---------  ---------

        Net earnings                                         $  611,557    774,887    633,264
                                                             ==========  =========  =========

        Basic earnings per share                             $      .66        .84        .68
                                                             ==========  =========  =========

        Diluted earnings per share                           $      .63        .82        .66
                                                             ==========  =========  =========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       17
<PAGE>
<TABLE>
<CAPTION>
                                   DECATUR FIRST BANK GROUP, INC.
                                           AND SUBSIDIARY
                           CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                        FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002


                                                                      2004       2003        2002
                                                                   ----------  ---------  ----------
<S>                                                                <C>         <C>        <C>
Net earnings                                                       $ 611,557    774,887     633,264
                                                                   ----------  ---------  ----------

Other comprehensive income (loss), net of tax:
  Unrealized gains (losses) on investment securities
    available-for-sale:
      Unrealized gains (losses) arising during the period, net of
        tax of $78,879, $113,344 and $276,682, respectively         (128,697)  (184,928)    451,429
      Reclassification adjustment for gains included in net
        earnings, net of tax of $9,996, $49,755 and $45,353,
        respectively                                                 (16,309)   (81,179)    (73,996)
                                                                   ----------  ---------  ----------

            Other comprehensive income (loss), net of tax           (145,006)  (266,107)    377,433
                                                                   ----------  ---------  ----------

            Comprehensive income                                   $ 466,551    508,780   1,010,697
                                                                   ==========  =========  ==========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       18
<PAGE>
<TABLE>
<CAPTION>
                                       DECATUR FIRST BANK GROUP, INC.
                                               AND SUBSIDIARY
                         CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

                            FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002


                                                         Retained                 Accumulated
                                           Additional    Earnings                    Other
                                 Common     Paid-in    (Accumulated   Treasury   Comprehensive
                                 Stock      Capital      Deficit)       Stock    Income (Loss)      Total
                               ----------  ----------  -------------  ---------  --------------  -----------
<S>                            <C>         <C>         <C>            <C>        <C>             <C>

Balance, December 31, 2001     $4,719,800   4,686,094         59,429  (151,000)        (50,044)   9,264,279

Issuance of common stock            3,635       6,358              -         -               -        9,993
Purchase of treasury stock,
    8,500 shares                        -           -              -  (107,500)              -     (107,500)
Change in unrealized gain/
 loss on securities available
 for sale, net of tax                   -           -              -         -         377,433      377,433
Net earnings                            -           -        633,264         -               -      633,264
                               ----------  ----------  -------------  ---------  --------------  -----------

Balance, December 31, 2002      4,723,435   4,692,452        692,693  (258,500)        327,389   10,177,469

Issuance of common stock            1,850       3,645              -         -               -        5,495
Purchase of treasury stock,
    100 shares                          -           -              -    (1,450)              -       (1,450)
Change in unrealized gain/
 loss on securities available
 for sale, net of tax                   -           -              -         -        (266,107)    (266,107)
Net earnings                            -           -        774,887         -               -      774,887
                               ----------  ----------  -------------  ---------  --------------  -----------

Balance, December 31, 2003      4,725,285   4,696,097      1,467,580  (259,950)         61,282   10,690,294

Issuance of common stock            2,795       6,720              -         -               -        9,515
Change in unrealized gain/
 loss on securities available
 for sale, net of tax                   -           -              -         -        (145,006)    (145,006)
Net earnings                            -           -        611,557         -               -      611,557
                               ----------  ----------  -------------  ---------  --------------  -----------

Balance, December 31, 2004     $4,728,080   4,702,817      2,079,137  (259,950)        (83,724)  11,166,360
                               ==========  ==========  =============  =========  ==============  ===========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       19
<PAGE>
<TABLE>
<CAPTION>
                                        DECATUR FIRST BANK GROUP, INC.
                                                AND SUBSIDIARY
                                    CONSOLIDATED STATEMENTS OF CASH FLOWS

                             FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002


                                                                        2004           2003          2002
                                                                   --------------  ------------  ------------
<S>                                                                <C>             <C>           <C>
Cash flows from operating activities:
  Net earnings                                                     $     611,557       774,887       633,264
  Adjustments to reconcile net earnings to net
    cash provided by operating activities:
      Depreciation, amortization and accretion                           303,426       367,414       284,886
      Provision for loan losses                                          335,000       185,000       400,000
      Provision for stock awards                                           9,515         5,495         9,993
      Deferred income tax benefit                                        (73,940)      (42,969)         (609)
      Gain on sale of securities                                         (26,305)     (130,934)     (119,349)
      Increase in cash surrender value of life insurance                 (54,000)      (68,782)       (1,442)
      Change in:
        Accrued interest receivable and other assets                    (148,344)      134,393       (77,140)
        Accrued interest payable and other liabilities                   243,440      (150,679)      233,833
                                                                   --------------  ------------  ------------

            Net cash provided by operating activities                  1,200,349     1,073,825     1,363,436
                                                                   --------------  ------------  ------------

Cash flows from investing activities:
  Net change in interest-bearing deposits                               (932,958)       (4,776)      444,013
  Proceeds from calls and maturities of investment securities
    available-for-sale                                                 3,257,909     6,586,095    13,525,088
  Proceeds from sales of investment securities available-for-sale      3,896,955     9,630,133    10,634,518
  Purchases of investment securities available-for-sale               (6,434,034)  (13,132,864)  (17,022,909)
  Proceeds from the sale of other investments                                  -        19,997             -
  Net change in loans                                                (31,371,063)   (8,801,078)  (20,917,886)
  Purchase of bank owned life insurance                                        -             -    (1,300,000)
  Proceeds from the sale of other real estate                                  -        45,000             -
  Purchase of premises and equipment                                  (1,246,674)     (129,810)     (660,764)
                                                                   --------------  ------------  ------------

            Net cash used by investing activities                    (32,829,865)   (5,787,303)  (15,297,940)
                                                                   --------------  ------------  ------------

Cash flows from financing activities:
  Net change in deposits                                              27,550,459     9,302,674     9,785,715
  Net change in federal funds purchased                                2,000,000             -             -
  Net change in other borrowings                                               -             -    (4,650,000)
  Proceeds from Federal Home Loan Bank advances                                -             -     4,980,000
  Repayment of Federal Home Loan Bank advance                                  -    (2,000,000)            -
  Purchase of treasury stock                                                   -        (1,450)     (107,500)
                                                                   --------------  ------------  ------------

            Net cash provided by financing activities                 29,550,459     7,301,224    10,008,215
                                                                   --------------  ------------  ------------

Net change in cash and cash equivalents                               (2,079,057)    2,587,746    (3,926,289)

Cash and cash equivalents at beginning of year                         7,981,089     5,393,343     9,319,632
                                                                   --------------  ------------  ------------

Cash and cash equivalents at end of year                           $   5,902,032     7,981,089     5,393,343
                                                                   ==============  ============  ============

Supplemental schedule of noncash investing and financing
    activities:
  Change in net unrealized gain/loss on investment securities
    available-for-sale, net of tax                                 $    (145,006)     (266,107)      377,433
  Transfer of loans to other real estate                           $     610,656             -             -

Supplemental disclosures of cash flow information:
  Cash paid during the year for interest                           $   1,855,528     1,597,758     1,445,302
  Cash paid during the year for income taxes                       $     284,000       352,230       240,000
</TABLE>

See accompanying notes to consolidated financial statements.


                                       20
<PAGE>
                         DECATUR FIRST BANK GROUP, INC.
                                 AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Basis of Presentation and Nature of Operations
     ----------------------------------------------
     The consolidated financial statements include the accounts of Decatur First
     Bank  Group,  Inc. (the "Company") and its wholly owned subsidiary, Decatur
     First  Bank  (the  "Bank").  All  significant  intercompany  accounts  and
     transactions  have  been  eliminated  in  consolidation.

     The  Bank  commenced  business  on  September  2,  1997 upon receipt of its
     banking  charter  from  the  Georgia Department of Banking and Finance (the
     "DBF").  The Bank is primarily regulated by the DBF and the Federal Deposit
     Insurance  Corporation  and  undergoes  periodic  examinations  by  these
     regulatory  agencies.  The Company is regulated by the Federal Reserve Bank
     of  Atlanta and also is subject to periodic examinations. The Bank provides
     a  full  range  of  commercial and consumer banking services throughout the
     Decatur  and  DeKalb  County  area  in  Georgia.  During  2003, the Company
     established a loan production office in Greene County, Georgia and in 2004,
     converted this facility into a full service branch.

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

     Cash  and  Cash  Equivalents
     ----------------------------
     Cash  equivalents  include  amounts  due from banks and federal funds sold.
     Generally, federal funds are sold for one-day periods.

     Investment  Securities
     ----------------------
     The  Company classifies its securities in one of three categories: trading,
     available-for-sale,  or held-to-maturity. Trading securities are bought and
     held  principally  for  the  purpose  of  selling  them  in  the near term.
     Held-to-maturity  securities are those securities for which the Company has
     the  ability and intent to hold until maturity. All securities not included
     in  trading  or  held-to-maturity  are classified as available-for-sale. At
     December  31,  2004  and  2003,  all  securities  were  classified  as
     available-for-sale.

     Trading  and  available-for-sale  securities  are  recorded  at fair value.
     Held-to-maturity  securities  are  recorded  at  cost,  adjusted  for  the
     amortization  or  accretion  of premiums or discounts. Unrealized gains and
     losses on trading securities are recognized in earnings. Unrealized holding
     gains  and  losses,  net  of  the  related  tax  effect,  on  securities
     available-for-sale  are  excluded  from  earnings  and  are  reported  as a
     separate  component  of  shareholders'  equity until realized. Transfers of
     securities  between  categories  are  recorded at fair value at the date of
     transfer.

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

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

     Other  Investments
     ------------------
     Other  investments  include Federal Home Loan Bank ("FHLB") stock and other
     equity  securities  with  no  readily  determinable  fair  value.  These
     investments are carried at cost, which approximates fair value.

     Loans  and  Allowance  for  Loan  Losses
     ----------------------------------------
     Loans  are stated at principal amount outstanding, net of the allowance for
     loan  losses.  Unearned  interest  on  discounted  loans  is  recognized as
     income  over  the  term  of  the loans using a method, which approximates a
     level  yield.  Interest  on  other  loans is calculated by using the simple
     interest method on daily balances of the principal amount outstanding.


                                       21
<PAGE>
                         DECATUR FIRST BANK GROUP, INC.
                                 AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

     Loans and Allowance for Loan Losses, continued
     ----------------------------------------------
     A  loan  is  considered  impaired  when,  based  on current information and
     events,  it  is  probable  that  all  amounts  due  according  to  the
     contractual  terms  of  the  loan agreement will not be collected. Impaired
     loans are measured based on the present value of expected future cash flows
     discounted  at  the  loan's  effective  interest  rate,  or  at  the loan's
     observable market price, or at the fair value of the collateral of the loan
     if the loan is collateral dependent. Accrual of interest is discontinued on
     a  loan  when  management believes, after considering economic and business
     conditions  and  collection efforts that the borrower's financial condition
     is such that collection of interest is doubtful.

     Servicing  assets  and  liabilities  are  assessed  for  impairment  or
     increased  obligation based upon their fair values. When the Bank sells the
     portion  of  a  loan  guaranteed  by the U.S. Small Business Administration
     ("SBA"),  the  investment  in  the  entire  loan  is  allocated between the
     guaranteed  and unguaranteed portions of the loan, as well as the servicing
     assets and interest-only strip receivable, based upon their respective fair
     market  values  at the date of sale. Gains on sales of loans, calculated by
     taking  the  net  proceeds from the sale less the allocated sold portion of
     the  loan,  are  presented  in the statement of operations net of brokerage
     expenses.

     Servicing  assets  and  interest-only  strips  receivable  recognized  from
     the  sales  of the portion of loans guaranteed by SBA with the retention of
     loan  servicing  are  carried  at the present value of estimated future net
     servicing  income  over  the estimated lives of the related SBA loans, less
     amounts  amortized.  Amortization of these assets is computed using a level
     yield  method  over  the estimated remaining lives of the related SBA loans
     taking into consideration assumed prepayment patterns. Servicing assets and
     interest-only  strips  receivable  are measured for impairment periodically
     via stratification of the assets by predominant risk characteristic such as
     loan  term  and  interest rate. No valuation allowances were required based
     upon  the evaluation for impairment at December 31, 2003. There were no SBA
     loans held-for-sale at December 31, 2004 or 2003.

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

     Management's  judgment  in  determining  the  adequacy  of the allowance is
     based on evaluations of the collectibility of loans. These evaluations take
     into  consideration such factors as changes in the nature and volume of the
     loan  portfolio, current economic conditions that may affect the borrower's
     ability  to  pay,  overall portfolio quality and review of specific problem
     loans.  In  determining  the  adequacy  of  the  allowance  for loan losses
     management  uses four different methods as indicators of the reasonableness
     of  the  allowance.  The methods used include a risk method (using internal
     classifications  along  with  regulatory  classifications),  historical
     charge-offs,  comparison to a peer group, and current classifications based
     on  the  loan grading system. The combination of these results are compared
     quarterly  to the recorded allowance for loan losses for reasonableness and
     material differences are adjusted by increasing or decreasing the provision
     for  loan  losses.  Management  uses  an  external  loan  review program to
     challenge  and  corroborate  the  internal  loan grading system and provide
     additional  analysis  in  determining the adequacy of the allowance and the
     future provisions for estimated loan losses.

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


                                       22
<PAGE>
                         DECATUR FIRST BANK GROUP, INC.
                                 AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

     Premises  and  Equipment
     ------------------------
     Premises  and  equipment  are stated at cost less accumulated depreciation.
     Depreciation  is provided using the straight-line method over the estimated
     useful  lives of the assets. Costs incurred for maintenance and repairs are
     expensed  currently.  Depreciation  expense  is  computed  using  the
     straight-line  method  over  the  following  estimated  useful  lives:

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

     Income  Taxes
     -------------
     Deferred  tax  assets  and  liabilities  are  recognized for the future tax
     consequences  attributable  to  differences between the financial statement
     carrying  amounts  of  existing assets and liabilities and their respective
     tax  bases  and  operating  loss and tax credit carryforwards. Deferred tax
     assets  and  liabilities  are  measured using enacted tax rates expected to
     apply  to  taxable income in the years in which those temporary differences
     are  expected to be recovered or settled. The effect on deferred tax assets
     and  liabilities  of  a  change in tax rates is recognized in income in the
     period  that  includes  the  enactment  date.

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

     Stock-Based  Compensation
     -------------------------
     At December 31, 2004, the Company sponsors a stock-based compensation plan,
     which  is  described  more  fully in Note 10. The Company accounts for this
     plan  under  the  recognition  and  measurement  principles  of  Accounting
     Principles  Board  ("APB")  Opinion  No. 25, Accounting for Stock Issued to
     Employees,  and  related  Interpretations.  No  stock-based  employee
     compensation  cost  is  reflected  in  net earnings, as all options granted
     under  this  plan  had  an  exercise price equal to the market value of the
     underlying  common  stock  on  the  date  of  grant.  The  following  table
     illustrates  the  effect  on  net  earnings  and  earnings per share if the
     Company  had  applied the fair value recognition provisions of Statement of
     Financial Accounting Standards ("SFAS") No. 123, Accounting for Stock-Based
     Compensation,  to  stock-based  employee  compensation  for the years ended
     December  31,  2004,  2003  and  2002.

<TABLE>
<CAPTION>
                                                            December 31,
                                                    ----------------------------
                                                      2004      2003      2002
                                                    --------  ---------  -------
<S>                                                 <C>       <C>        <C>
Net earnings as reported                            $611,557   774,887   633,264
Deduct: Total stock-based employee compensation
  expense determined under fair-value based method
  for all awards                                           -  (137,000)        -
                                                    --------  ---------  -------
Pro forma net earnings                              $611,557   637,887   633,264
                                                    ========  =========  =======
Basic earnings per share:
  As reported                                       $    .66       .84       .68
                                                    ========  =========  =======
  Pro forma                                         $    .66       .69       .68
                                                    ========  =========  =======
Diluted earnings per share:
  As reported                                       $    .63       .82       .66
                                                    ========  =========  =======
  Pro forma                                         $    .63       .68       .66
                                                    ========  =========  =======
</TABLE>

     No  options  were  granted in 2004 or 2002. The weighted average grant-date
     fair  value  of  options  granted in 2003 was $3.79. The fair value of each
     option  is  estimated  on the date of grant using the Minimum Value pricing
     model  with  the  following  assumptions:  dividend  yield of 0%; risk free
     interest  rate  of  4%  and  an  expected  life  of  ten  years.


                                       23
<PAGE>
                         DECATUR FIRST BANK GROUP, INC.
                                 AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

     Net  Earnings  Per  Common  Share
     ---------------------------------
     The  Company  is  required  to  report  earnings  per common share with and
     without  the  dilutive  effects  of  potential  common stock issuances from
     instruments  such  as  options,  convertible securities and warrants on the
     face  of  the  statements  of earnings. Basic earnings per common share are
     based  on  the  weighted average number of common shares outstanding during
     the  period while the effects of potential common shares outstanding during
     the  period  are  included in diluted earnings per share. Additionally, the
     Company  must  reconcile the amounts used in the computation of both "basic
     earnings per share" and "diluted earnings per share". At December 31, 2003,
     a total of 58,275 potential common shares related to stock options were not
     included  in  the  computation  of  diluted earnings per share because they
     would  have  been  antidilutive.  Earnings per common share amounts for the
     years ended December 31, 2004, 2003 and 2002 are as follows:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 2004            Net Earnings   Common Shares    Per Share
                                                (Numerator)    (Denominator)     Amount
                                               --------------  --------------  -----------
<S>                                            <C>             <C>             <C>
Basic earnings per share                       $      611,557         924,779  $      .66
Effect of dilutive securities - stock options               -          40,678        (.03)
                                               --------------  --------------  -----------

Diluted earnings per share                     $      611,557         965,457  $      .63
                                               ==============  ==============  ===========

FOR THE YEAR ENDED DECEMBER 31, 2003            Net Earnings   Common Shares    Per Share
                                                (Numerator)    (Denominator)     Amount
                                               --------------  --------------  -----------

Basic earnings per share                       $      774,887         924,246  $      .84
Effect of dilutive securities - stock options               -          18,507        (.02)
                                               --------------  --------------  -----------

Diluted earnings per share                     $      774,887         942,753  $      .82
                                               ==============  ==============  ===========

FOR THE YEAR ENDED DECEMBER 31, 2002            Net Earnings   Common Shares    Per Share
                                                (Numerator)    (Denominator)     Amount
                                               --------------  --------------  -----------

Basic earnings per share                       $      633,264         932,352  $      .68
Effect of dilutive securities - stock options               -          20,804        (.02)
                                               --------------  --------------  -----------

Diluted earnings per share                     $      633,264         953,156  $      .66
                                               ==============  ==============  ===========
</TABLE>

     Recent  Accounting  Pronouncements
     ----------------------------------
     In December 2004, the Financial Accounting Standards Board ("FASB") adopted
     Statement  of  Financial  Accounting  Standards  No.  123(R),  Share-Based
     Payment  ("SFAS  No.  123(R)"), which revises and amends SFAS No. 123. SFAS
     No.  123(R) requires all share-based payments to employees, including stock
     options,  to  be recognized in the financial statements based on their fair
     values.  Upon adoption, pro forma disclosure is no longer an alternative to
     financial  statement recognition. SFAS No. 123(R) will be effective for the
     Company  for  financial  statements  beginning after December 15, 2005. The
     Company  is  still evaluating the transition provisions allowed by SFAS No.
     123(R)  and  expects  to adopt its provisions in the first quarter of 2006.
     The  Company  has  not yet determined the financial statement impact of the
     pronouncement.

     In  March  2004,  the  Emerging  Issues  Task  Force  ("EITF")  issued EITF
     03-1,  "The  Meaning of Other-Than-Temporary Impairment and its Application
     to  Certain Investments. EITF 03-1 provides guidance for evaluating whether
     an  investment  is other-than-temporarily impaired. The disclosure guidance
     was  effective for other-than-temporarily impairment evaluation made in the
     reporting periods beginning after June 15, 2004 whereas the recognition and
     measurements  guidance  has been deferred. The disclosures required by EITF
     03-1 are included in Note 2 to the consolidated financial statements.

     Other  accounting  standards  that  have  been  issued  or  proposed by the
     FASB and other standard setting entities that do not require adoption until
     a  future  date are not expected to have a material impact on the Company's
     consolidated financial statements upon adoption.


                                       24
<PAGE>
                         DECATUR FIRST BANK GROUP, INC.
                                 AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(2)  INVESTMENT  SECURITIES

     Investment  securities available-for-sale at December 31, 2004 and 2003 are
     as follows:

<TABLE>
<CAPTION>
                                            December 31, 2004
                              -----------------------------------------------
                                             Gross       Gross     Estimated
                               Amortized   Unrealized  Unrealized     Fair
                                 Cost        Gains       Losses      Value
                              -----------  ----------  ----------  ----------
<S>                           <C>          <C>         <C>         <C>
U.S. Government agencies      $ 9,477,066      31,547      80,983   9,427,630
Mortgage-backed securities      4,647,177       3,043     111,869   4,538,351
State, county and municipals    2,009,040      32,503       9,280   2,032,263
                              -----------  ----------  ----------  ----------

                              $16,133,283      67,093     202,132  15,998,244
                              ===========  ==========  ==========  ==========

                                            December 31, 2003
                              -----------------------------------------------
                                             Gross       Gross     Estimated
                               Amortized   Unrealized  Unrealized     Fair
                                 Cost        Gains       Losses      Value
                              -----------  ----------  ----------  ----------
U.S. Government agencies      $ 5,869,401      97,097      18,982   5,947,516
Mortgage-backed securities      6,540,350      22,476     126,968   6,435,858
State, county and municipals    4,509,950     131,305       6,088   4,635,167
                              -----------  ----------  ----------  ----------

                              $16,919,701     250,878     152,038  17,018,541
                              ===========  ==========  ==========  ==========
</TABLE>

     At  December  31,  2004  and  2003,  unrealized  losses  in  the investment
     portfolio  related  to  debt  securities.  The  unrealized  losses  on  the
     debt  securities arose due to changing interest rates and market conditions
     and  are considered to be temporary because of acceptable investment grades
     where the repayment sources of principal and interest are largely backed by
     the  U.S.  Government.  At  December 31, 2004, fifteen out of nineteen U.S.
     Government  agency securities contained unrealized losses, seven out of ten
     mortgage backed securities contained unrealized losses and one out of eight
     state,  county  and  municipal  securities  contained unrealized losses. At
     December  31,  2003, five out of thirteen U.S. Government agency securities
     contained unrealized losses, seven out of twelve mortgage backed securities
     contained  unrealized  losses  and  one  out  of  twelve  state, county and
     municipal securities contained unrealized losses.

     The  following  tables  show  the gross unrealized losses and fair value of
     securities,  aggregated  by  category  and  length  of time that individual
     securities  have  been  in  a  continuous  unrealized  loss position, as of
     December 31, 2004 and 2003.

<TABLE>
<CAPTION>
                                                         December 31, 2004
                             -----------------------------------------------------------------------
                                Less Than 12 Months      12 Months or More            Total
                             ------------------------  ---------------------  ----------------------
                                 Fair      Unrealized    Fair     Unrealized     Fair     Unrealized
                                Value         Loss       Value       Loss       Value       Losses
                             ------------  ----------  ---------  ----------  ----------  ----------
<S>                          <C>           <C>         <C>        <C>         <C>         <C>
U.S Government agencies      $  7,504,670      80,983          -           -   7,504,670      80,983
Mortgage-backed securities        271,234       1,585  4,078,355     110,284   4,349,589     111,869
State county and municipals       390,720       9,280          -           -     390,720       9,280
                             ------------  ----------  ---------  ----------  ----------  ----------

                             $  8,166,624      91,848  4,078,355     110,284  12,244,979     202,132
                             ============  ==========  =========  ==========  ==========  ==========
</TABLE>


                                       25
<PAGE>
                         DECATUR FIRST BANK GROUP, INC.
                                 AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(2)  INVESTMENT  SECURITIES,  CONTINUED

<TABLE>
<CAPTION>
                                                         December 31, 2003
                             ---------------------------------------------------------------------
                                Less Than 12 Months      12 Months or More          Total
                             ------------------------  --------------------  ---------------------
                                 Fair      Unrealized    Fair    Unrealized    Fair     Unrealized
                                Value         Loss      Value       Loss       Value      Losses
                             ------------  ----------  --------  ----------  ---------  ----------
<S>                          <C>           <C>         <C>       <C>         <C>        <C>
U.S Government agencies      $  2,655,659      18,982         -           -  2,655,659      18,982
Mortgage-backed securities      5,771,864     126,968         -           -  5,771,864     126,968
State county and municipals       393,912       6,088         -           -    393,912       6,088
                             ------------  ----------  --------  ----------  ---------  ----------

                             $  8,821,435     152,038         -           -  8,821,435     152,038
                             ============  ==========  ========  ==========  =========  ==========
</TABLE>

     The  amortized  cost  and  estimated  fair  value  of investment securities
     available-for-sale  at  December  31,  2004,  by  contractual maturity, are
     shown  below.  Expected  maturities will differ from contractual maturities
     because  borrowers  have  the  right  to call or prepay obligations with or
     without call or prepayment penalties.

<TABLE>
<CAPTION>
                                                             Amortized   Estimated
                                                               Cost      Fair Value
                                                            -----------  ----------
<S>                                                         <C>          <C>
U.S. Government agencies and state, county and municipals:
    1 to 5 years                                            $ 7,577,288   7,559,593
    6 to 10 years                                             3,523,006   3,504,490
    More than 10 years                                          385,812     395,810
Mortgage-backed securities                                    4,647,177   4,538,351
                                                            -----------  ----------

                                                            $16,133,283  15,998,244
                                                            ===========  ==========
</TABLE>

     The  following  summarizes  investment  securities sales activities for the
     years ended December 31, 2004, 2003 and 2002:

<TABLE>
<CAPTION>
                                                 2004       2003        2002
                                              ----------  ---------  ----------
<S>                                           <C>         <C>        <C>
Proceeds from sales of securities             $3,896,955  9,630,133  10,634,518
                                              ==========  =========  ==========
Gross gains on sales and calls of securities      63,384    206,439     119,349
Gross losses on sales of securities               37,079     75,505           -
                                              ----------  ---------  ----------
Net gains on sales of securities              $   26,305    130,934     119,349
                                              ==========  =========  ==========
</TABLE>

     Securities  with  a  carrying  value  of  approximately  $4,005,000  and
     $10,098,000 as of December 31, 2004 and 2003, respectively, were pledged to
     secure  public deposits as required by law as well as the Federal Home Loan
     Bank  advances.

(3)  LOANS

     Major classifications of loans at December 31, 2004 and 2003 are summarized
     as follows:

<TABLE>
<CAPTION>
                                            2004         2003
                                        ------------  ----------
<S>                                     <C>           <C>
Commercial, financial and agricultural  $ 10,459,001  10,957,599
Real estate - construction                18,348,562  11,905,865
Real estate - mortgage                    70,240,763  46,404,071
Consumer                                   3,591,884   2,643,140
                                        ------------  ----------

                                         102,640,210  71,910,675

Less allowance for loan losses             1,203,279     899,151
                                        ------------  ----------

                                        $101,436,931  71,011,524
                                        ============  ==========
</TABLE>


                                       26
<PAGE>
                         DECATUR FIRST BANK GROUP, INC.
                                 AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(3)  LOANS,  CONTINUED

     The Bank grants loans and extensions of credit to individuals and a variety
     of  businesses  and  corporations  located  in  its  general  trade area of
     the  City of Decatur, DeKalb County, Georgia and Greene County, Georgia and
     adjoining  counties.  Although the Bank has a diversified loan portfolio, a
     substantial portion of the loan portfolio is collateralized by improved and
     unimproved real estate and is dependent upon the real estate market.

     An  analysis  of  the  activity  in  the  allowance for loan losses for the
     years ended December 31, 2004, 2003 and 2002 is presented below:

<TABLE>
<CAPTION>
                                    2004        2003       2002
                                 -----------  ---------  ---------
<S>                              <C>          <C>        <C>
Balance at beginning of year     $  899,151    812,507    595,279
Provision charged to operations     335,000    185,000    400,000
Loans charged off                   (63,562)  (116,612)  (183,036)
Recoveries                           32,690     18,256        264
                                 -----------  ---------  ---------

Balance at end of year           $1,203,279    899,151    812,507
                                 ===========  =========  =========
</TABLE>

     Mortgage  loans  totaling  approximately  $21,051,000  and  $2,178,000 were
     pledged  as  collateral  for  outstanding  Federal  Home Loan Bank advances
     as of December 31, 2004 and 2003, respectively.

(4)  PREMISES  AND  EQUIPMENT

     Major classifications of premises and equipment are summarized as follows:

<TABLE>
<CAPTION>
                                  2004       2003
                               ----------  ---------
<S>                            <C>         <C>
Land                           $  931,681    442,053
Building and improvements       2,481,896  1,972,497
Furniture and equipment         1,095,142    895,168
Construction in process            47,673          -
                               ----------  ---------

                                4,556,392  3,309,718
Less accumulated depreciation   1,152,988    941,454
                               ----------  ---------

                               $3,403,404  2,368,264
                               ==========  =========
</TABLE>

     Depreciation  expense  amounted  to  approximately  $212,000,  $186,000 and
     $189,000 in 2004, 2003 and 2002, respectively.

(5)  DEPOSITS

     Maturities of time deposits at December 31, 2004 are as follows:

<TABLE>
<CAPTION>
Maturing in:
<S>           <C>
  2005        $42,838,557
  2006          5,554,352
  2007         12,746,511
  2008            307,428
  2009          1,796,868
              -----------

              $63,243,716
              ===========
</TABLE>


                                       27
<PAGE>
                         DECATUR FIRST BANK GROUP, INC.
                                 AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(6)  OTHER  BORROWINGS

     In  December  2004,  the  Company  entered  into  a  credit facility with a
     correspondent  bank  that  provides  for  borrowings  of  up to $2,000,000.
     The  credit  facility  bears interest at the prime interest rate less 1.00%
     payable  quarterly  and  matures on December 22, 2016. Borrowings under the
     facility  are  collateralized  by  the  stock  of  the Bank. The Company is
     subject  to  certain covenants that include minimum tangible capital levels
     and  capital  ratios,  return on asset ratios, non-performing asset limits,
     and  allowance  for  loan  loss levels. At December 31, 2004, there were no
     outstanding borrowings under this credit facility.

(7)  FEDERAL  HOME  LOAN  BANK  ADVANCES

     The  Federal  Home  Loan  Bank  advances  at December 31, 2004 and 2003 are
     summarized  as  follows:

<TABLE>
<CAPTION>
                                                                         2004       2003
                                                                      ----------  ---------
<S>                                                                   <C>         <C>
Due on demand, interest is paid monthly at the stated FHLB rate.      $2,500,000  2,500,000
Advance maturing May 6, 2008. Interest is paid monthly at 5.45%.         480,000    480,000
Advance maturing March 1, 2010. Interest is paid quarterly at 5.29%.   5,000,000  5,000,000
                                                                      ----------  ---------
                                                                      $7,980,000  7,980,000
                                                                      ==========  =========
</TABLE>

     The  advances  are  collateralized  by  a pledge of certain mortgage loans,
     securities  and  the  Bank's  Federal  Home  Loan  Bank  stock.

(8)  INCOME  TAXES

     The components of income tax expense for the years ended December 31, 2004,
     2003  and  2002  are  as  follows:

<TABLE>
<CAPTION>
            2004       2003      2002
          ---------  --------  --------
<S>       <C>        <C>       <C>
Current   $323,528   268,572   246,803
Deferred   (73,940)  (42,969)     (609)
          ---------  --------  --------

          $249,588   225,603   246,194
          =========  ========  ========
</TABLE>

     The  differences  between  income  tax  expense  and the amount computed by
     applying the statutory federal income tax rate to earnings before taxes for
     the years ended December 31, 2004, 2003 and 2002 are as follows:

<TABLE>
<CAPTION>
                                                          2004       2003      2002
                                                        ---------  --------  --------
<S>                                                     <C>        <C>       <C>
Pretax income at statutory rate                         $292,789   340,167   299,016
Add (deduct):
    Tax-exempt interest income                           (29,676)  (67,742)  (58,078)
    Increase in cash surrender value of life insurance   (16,659)  (22,604)        -
    Non-deductible interest expense                        2,531     5,807     4,911
    Other                                                    603   (30,025)      345
                                                        ---------  --------  --------

                                                        $249,588   225,603   246,194
                                                        =========  ========  ========
</TABLE>


                                       28
<PAGE>
                         DECATUR FIRST BANK GROUP, INC.
                                 AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(8)  INCOME  TAXES,  CONTINUED

     The  following  summarizes the components of deferred taxes at December 31,
     2004 and 2003.

<TABLE>
<CAPTION>
                                                            2004     2003
                                                          --------  -------
<S>                                                       <C>       <C>
Deferred income tax assets:
  Allowance for loan losses                               $370,800  243,635
  Deferred compensation                                     46,315   22,769
  Operating loss carryforwards and credits                       -   20,467
  Discount on SBA loans, net                                   208      343
  Net unrealized losses on securities available-for-sale    51,315        -
  Other                                                      7,578        -
                                                          --------  -------

Total gross deferred income tax assets                     476,216  287,214
                                                          --------  -------

Deferred income tax liabilities:
  Premises and equipment                                   104,172   28,582
  Net unrealized gains on securities available-for-sale          -   37,560
  Other                                                          -   11,843
                                                          --------  -------
Total gross deferred income tax liabilities                104,172   77,985
                                                          --------  -------
Net deferred tax assets                                   $372,044  209,229
                                                          ========  =======
</TABLE>

(9)  COMMITMENTS

     The Bank 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.  Those  instruments  involve, to varying
     degrees,  elements of credit risk in excess of the amount recognized in the
     consolidated  balance  sheet.  The contractual amounts of those instruments
     reflect  the  extent  of  involvement the Bank has in particular classes of
     financial instruments.

     Commitments  to  extend  credit  are  agreements  to  lend to a customer as
     long as there is no violation of any condition established in the contract.
     Commitments  generally  have  fixed  expiration  dates or other termination
     clauses and may require payment of a fee. Since many of the commitments are
     expected  to  expire without being drawn upon, the total commitment amounts
     do  not  necessarily represent future cash requirements. The Bank evaluates
     each  customer's  creditworthiness  on  a case-by-case basis. The amount of
     collateral  obtained,  if  deemed  necessary  by the Bank upon extension of
     credit, is based on management's credit evaluation of the counterparty. The
     Bank's  loans  are  primarily  collateralized by residential and other real
     properties,  automobiles,  savings deposits, accounts receivable, inventory
     and equipment.

     Standby  letters  of  credit  are  written  conditional  commitments issued
     by  the  Bank  to guarantee the performance of a customer to a third party.
     Those  guarantees  are  primarily  issued  to  support  public  and private
     borrowing  arrangements.  Most  letters  of credit extend for less than one
     year.  The credit risk involved in issuing letters of credit is essentially
     the same as that involved in extending loan facilities to customers.

     The  Bank's  exposure  to  credit  loss  in the event of non-performance 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  Bank uses the same credit policies in
     making  commitments  and  conditional  obligations  as  it  does  for
     on-balance-sheet  instruments.  In most cases, the Bank requires collateral
     to support financial instruments with credit risk.

<TABLE>
<CAPTION>
                                                 2004         2003
                                              -----------  ----------
<S>                                           <C>          <C>
Financial instruments whose contract amounts
  represent credit risk:
    Commitments to extend credit              $19,377,000  18,795,000
    Standby letters of credit                 $ 1,416,000      61,000
</TABLE>


                                       29
<PAGE>
                         DECATUR FIRST BANK GROUP, INC.
                                 AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(9)  COMMITMENTS,  CONTINUED

     The  Company  maintains  relationships  with  correspondent  banks that can
     provide  funds  to  it  on  short notice, if needed. Presently, the Company
     has arrangements with commercial banks for short term unsecured advances up
     to $7,200,000.

(10) EMPLOYEE  BENEFIT  PROGRAMS

     Defined  Contribution  Plan
     ---------------------------
     The Company sponsors a 401(k) plan for the benefit of its employees subject
     to  certain  minimum  age  and  service  requirements.  The  Company's
     contributions  to  the  plan  are  discretionary  and totaled approximately
     $18,000,  $14,000  and  $17,000 for the years ended December 31, 2004, 2003
     and  2002,  respectively.

     Director  Deferred  Compensation  Agreement
     -------------------------------------------
     During  2002,  the  Bank  established  a  Director  Deferred  Compensation
     Agreement  with  each  director  that  allows  the  directors  to defer the
     fees  that they receive for services that they provide as a director. These
     deferred  fees  will  accumulate  interest  at the prime interest rate less
     three  quarters  of  one percent annually. Deferral of these fees is at the
     discretion  of  each  director  and will accumulate until retirement of the
     director  at  which  time  the deferred fees plus interest will be paid out
     over  a  period  of  ten  years. The Bank accrued approximately $52,000 and
     $60,000  in  deferred  fees under this plan during the years ended December
     31, 2004 and 2003, respectively.

     The  Bank  is  also  the  owner  and beneficiary of life insurance policies
     on  the  lives  of its directors. The Bank intends to use these policies to
     fund  the  benefit plan described above. The carrying value of the policies
     was  approximately $1,424,000 and $1,370,000 at December 31, 2004 and 2003,
     respectively. The Bank accrued income of approximately $54,000, $69,000 and
     $1,000, for the years ended December 31, 2004, 2003 and 2002, respectively,
     for the increase in the cash surrender value of these policies.

     Stock  Incentive  Plan
     ----------------------
     The  Company  adopted a Stock Incentive Plan in 1998, that has subsequently
     been  amended,  covering  up  to  193,000  shares  of  the Company's common
     stock.  The  Plan  is administered by a committee of the Board of Directors
     and  provides  for  the  granting  of  shares  of  common stock, options to
     purchase  shares  of  common  stock  and  other  stock-based  incentives to
     officers, directors and key employees of the Company and Bank. The exercise
     price  of each option granted under the Plan will not be less than the fair
     market  value  of  the  shares of common stock subject to the option on the
     date  of  grant  as  determined  by  the  Board  of  Directors. Options are
     exercisable in whole or in part upon such terms as may be determined by the
     committee,  and  are  exercisable no later than ten years after the date of
     grant.

     During  2004,  2003  and  2002,  the Board awarded 559, 185 and 727 shares,
     respectively,  to  certain  employees based upon their tenure with the Bank
     under  the  Stock Incentive Plan. The fair value of these shares of $9,515,
     $5,495 and $9,993, respectively, was charged to operations upon issuance of
     the shares.


                                       30
<PAGE>
                         DECATUR FIRST BANK GROUP, INC.
                                 AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(10) EMPLOYEE BENEFIT PROGRAMS, CONTINUED

     Stock Incentive Plan, continued
     -------------------------------

     A  summary  status  of  the  Company's stock option plan as of December 31,
     2004,  2003  and  2002,  and changes during the years, are presented below:

<TABLE>
<CAPTION>
                                        2004               2003               2002
                                 ------------------  ------------------  -----------------
                                          Weighted            Weighted           Weighted
                                           Average             Average            Average
                                          Exercise            Exercise           Exercise
                                 Shares     Price    Shares     Price    Shares    Price
                                 -------  ---------  -------  ---------  ------  ---------
<S>                              <C>      <C>        <C>      <C>        <C>     <C>
Outstanding, beginning of year   138,806  $   12.11   80,531  $   10.00  80,531  $   10.01
Granted during the year                -          -   58,275      15.00       -          -
                                 -------  ---------  -------  ---------  ------  ---------

Outstanding, end of year         138,806  $   12.11  138,806  $   12.11  80,531  $   10.01
                                 =======  =========  =======  =========  ======  =========

Options exercisable at year end  138,806  $   12.11  138,606  $   12.11  64,225  $   10.00
                                 =======  =========  =======  =========  ======  =========
</TABLE>

     The  weighted average remaining contractual life of these stock options was
     approximately five years as of December 31, 2004.

(11) RELATED  PARTY  TRANSACTIONS

     The  Bank  conducts transactions with its directors and executive officers,
     including  companies  in  which  they  have  beneficial  interest,  in  the
     normal  course  of  business.  It  is  the  policy  of  the  Bank that loan
     transactions with directors and executive officers be made on substantially
     the  same  terms  as  those  prevailing at the time for comparable loans to
     other  persons.  The  following  is a summary of activity for related party
     loans for 2004.

<TABLE>
<CAPTION>
<S>                           <C>
Balance at December 31, 2003  $  525,268
New loans                      1,642,886
Repayments                       114,077
                              ----------

Balance at December 31, 2004  $2,054,077
                              ==========
</TABLE>

     At  December 31, 2004 and 2003, deposits from directors, executive officers
     and  their  related  interests  aggregated  $3,203,613  and  $3,479,185,
     respectively. These deposits were taken in the normal course of business at
     market  interest  rates.

(12) MISCELLANEOUS  OPERATING  INCOME  AND  EXPENSES

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

<TABLE>
<CAPTION>
                                                                   2004     2003     2002
                                                                 --------  -------  -------
<S>                                                              <C>       <C>      <C>
Other income:
  Increase in cash surrender value of bank owned life insurance  $ 54,000   68,782    1,442

Other expenses:
  ATM surcharge                                                  $ 81,336   77,955   72,708
  Data processing                                                $231,500  226,141  198,277
  Professional fees                                              $135,319  154,421  158,791
  Stationery & supplies                                          $ 87,663   60,444   51,718
  Other taxes & licenses                                         $ 85,330   53,600   41,886
</TABLE>


                                       31
<PAGE>
                         DECATUR FIRST BANK GROUP, INC.
                                 AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(13) REGULATORY  MATTERS

     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 certain adequacy guidelines and the regulatory framework
     for  prompt  corrective  action,  specific  capital guidelines that involve
     quantitative  measures  of the assets, liabilities, and certain off-balance
     sheet  items  as  calculated  under regulatory accounting practices must be
     met. The capital amounts and classification are also subject to qualitative
     judgments  by  the  regulators about components, risk weightings, and other
     factors.

     Quantitative  measures  established  by  regulation  to  ensure  capital
     adequacy  require  the Company and the Bank to maintain minimum amounts and
     ratios  (set  forth  in  the  table  below) of Total and Tier 1 Capital (as
     defined  in  the  regulations) to risk-weighted assets (as defined), and of
     Tier  1  Capital  (as  defined)  to average assets (as defined). Management
     believes,  as  of December 31, 2004 and 2003, that the Company and the Bank
     meet all capital adequacy requirements to which they are subject.

     As  of  December  31,  2004  and  2003,  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  1  risk-based and Tier 1 leverage ratios as set forth in
     the  table.  There are no conditions or events since that notification that
     management believes have changed the Bank's category.

     The actual capital amounts and ratios are also presented in the table.

<TABLE>
<CAPTION>
                                                                               To Be Well
                                                                            Capitalized Under
                                                       For Capital          Prompt Corrective
                                     Actual         Adequacy Purposes       Action Provisions
                             -------------------  ---------------------  -----------------------
                               Amount     Ratio     Amount      Ratio      Amount       Ratio
                             -----------  ------  ----------  ---------  -----------  ----------
<S>                          <C>          <C>     <C>         <C>        <C>          <C>
AS OF DECEMBER 31, 2004:
Total Capital
  (to Risk Weighted Assets)
    Consolidated             $12,452,000  11.52%  $8,647,000       8.0%      N/A            N/A
    Bank                     $12,302,000  11.39%  $8,642,000       8.0%  $10,803,000       10.0%
Tier 1 Capital
  (to Risk Weighted Assets)
    Consolidated             $11,249,000  10.41%  $4,323,000      4.00%      N/A            N/A
    Bank                     $11,099,000  10.27%  $4,321,000      4.00%  $ 6,482,000       6.00%
Tier 1 Capital
  (to Average Assets)
    Consolidated             $11,249,000   8.70%  $5,171,000      4.00%      N/A            N/A
    Bank                     $11,099,000   8.63%  $5,146,000      4.00%  $ 6,433,000       5.00%

AS OF DECEMBER 31, 2003:
Total Capital
  (to Risk Weighted Assets)
    Consolidated             $11,648,000   13.8%  $6,767,000      8.00%      N/A            N/A
    Bank                     $ 9,653,000   11.4%  $6,761,000      8.00%  $ 8,452,000      10.00%
Tier 1 Capital
  (to Risk Weighted Assets)
    Consolidated             $10,749,000   12.7%  $3,383,000      4.00%      N/A            N/A
    Bank                     $ 8,754,000   10.4%  $3,381,000      4.00%  $ 5,071,000       6.00%
Tier 1 Capital
  (to Average Assets)
    Consolidated             $10,749,000   10.7%  $4,021,000      4.00%      N/A            N/A
    Bank                     $ 8,754,000    9.6%  $3,658,000      4.00%  $ 4,573,000       5.00%
</TABLE>


                                       32
<PAGE>
                         DECATUR FIRST BANK GROUP, INC.
                                 AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(13) REGULATORY  MATTERS,  CONTINUED

     Dividends paid by the Bank are the primary source of funds available to the
     Company.  Banking  regulations  limit  the  amount of dividends that may be
     paid  without  prior  approval  of  the  regulatory  authorities.  These
     restrictions  are  based  on the level of regulatory classified assets, the
     prior years' net earnings, and the ratio of equity capital to total assets.
     In  2005, the Bank can pay dividends totaling approximately $323,000 to the
     Company without prior regulatory approval.

(14) FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS

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

     Cash  and  Cash  Equivalents
     ----------------------------
     For  cash,  due from banks and federal funds sold, the carrying amount is a
     reasonable estimate of fair value.

     Interest-bearing  Deposits  with  Other  Banks
     ----------------------------------------------
     The  carrying  value  of  interest-bearing  deposits  with other banks is a
     reasonable estimate of fair value.

     Investment  Securities  Available-for-sale
     ------------------------------------------
     Fair  values  for  securities available-for-sale are based on quoted market
     prices.

     Other  Investments
     ------------------
     The carrying amount of other investments approximates fair value.

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

     Cash  Surrender  Value  of  Life  Insurance
     -------------------------------------------
     The  carrying  value of cash surrender value of life insurance approximates
     fair value.

     Deposits
     --------
     The  fair  value  of  demand  deposits,  savings  accounts and money market
     deposits  is  the  amount  payable  on  demand  at  the reporting date. The
     fair  value  of  fixed  maturity  certificates  of  deposit is estimated by
     discounting  the  future  cash  flows using the rates currently offered for
     deposits of similar remaining maturities.

     Federal  Funds  Purchased
     -------------------------
     The carrying value of federal funds purchased approximates fair value.

     Federal  Home  Loan  Bank  Advances
     -----------------------------------
     The  fair  value  of  the  Federal Home Loan Bank fixed rate borrowings are
     estimated  using  discounted  cash  flows, based on the current incremental
     borrowing rates for similar types of borrowing arrangements.

     Commitments to Extend Credit and Standby Letters of Credit
     ----------------------------------------------------------
     Commitments  to  extend  credit and standby letters of credit are generally
     short-term  and  at  variable  interest rates. Therefore, both the carrying
     value  and  estimated  fair  value  associated  with  these instruments are
     immaterial.


                                       33
<PAGE>
                         DECATUR FIRST BANK GROUP, INC.
                                 AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(14) FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS,  CONTINUED

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

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

     The  carrying  amount  and  estimated  fair  values  of  the  Company's
     financial  instruments  as  of  December  31,  2004 and 2003 are as follows
     (amounts in thousands):

<TABLE>
<CAPTION>
                                                       2004                 2003
                                              ---------------------  --------------------
                                              Carrying   Estimated   Carrying  Estimated
                                               Amount    Fair Value   Amount   Fair Value
                                              ---------  ----------  --------  ----------
<S>                                           <C>        <C>         <C>       <C>
Assets:
  Cash and cash equivalents                   $   5,902       5,902     7,981       7,981
  Interest-bearing deposits with other banks      2,688       2,688     1,755       1,755
  Investment securities available-for-sale       15,998      15,998    17,019      17,019
  Other investments                                 610         610       574         574
  Loans, net                                    101,437     100,552    71,012      71,232
  Cash surrender value of life insurance          1,424       1,424     1,370       1,370
Liabilities:
  Deposits                                    $ 111,298     113,535    83,748      85,102
  Federal funds purchased                         2,000       2,000         -           -
  Federal Home Loan Bank advances                 7,980       8,390     7,980       8,782
</TABLE>

(15) STOCKHOLDERS'  EQUITY

     Shares  of  preferred  stock may be issued from time to time in one or more
     series  as  established  by  resolution  of  the  Board of Directors of the
     Company, up to a maximum of 2,000,000 shares. Each resolution shall include
     the number of shares issued, preferences, special rights and limitations as
     determined by the Board.

(16) PENDING  RE-ORGANIZATION

     On  February 9, 2005, the Company's Board of Directors unanimously approved
     a  plan  providing primarily for the termination of the Company's reporting
     obligations  under  the  Securities  and  Exchange Act of 1934 (the "Act").
     Under  the  plan,  record  holders of 500 or fewer shares of Company common
     stock  will receive cash in exchange for their shares in an amount equal to
     $17.50  per  share. Shares held by shareholders owning more than 500 shares
     of  record  (including,  for  purposes  of  the  plan,  any

     IRA account that holds more than 500 shares) will remain outstanding and be
     unaffected  by  the  plan.

     Based  on  the Company's current shareholder census, management anticipates
     that  the plan will reduce the number of shareholders below 300, which will
     enable  the  Company  to notify the Securities and Exchange Commission (the
     "SEC")  that  it  is entitled to cease filing annual, quarterly and current
     reports,  proxy  statements  and  other  reports  under  the  Exchange Act.
     Management estimates that the cessation of these reporting obligations will
     result  in  significant  savings  in  legal,  accounting and administrative
     expenses.

     The  plan  is  subject  to  various  conditions,  including the approval by
     the Company's shareholders following the distribution of a definitive proxy
     statement describing the terms and effects of the plan. The Company expects
     to complete the transaction during the second quarter of 2005.


                                       34
<PAGE>
<TABLE>
<CAPTION>
                         DECATUR FIRST BANK GROUP, INC.
                                 AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(17) DECATUR FIRST BANK GROUP, INC. (PARENT COMPANY ONLY) FINANCIAL INFORMATION

                                 Balance Sheets

                           December 31, 2004 and 2003

                                     Assets
                                     ------

                                                          2004         2003
                                                      ------------  -----------
<S>                                                   <C>           <C>
Cash and cash equivalents                             $    85,917      119,097
Interest-bearing deposit                                    7,181      105,377
Investment in Bank                                     11,017,640    9,712,214
Investment securities available-for-sale                        -      721,594
Other assets                                               55,622       32,012
                                                      ------------  -----------

                                                      $11,166,360   10,690,294
                                                      ============  ===========

                      Liabilities and Shareholders' Equity
                      ------------------------------------

Shareholders' equity                                  $11,166,360   10,690,294
                                                      ============  ===========


                                  Statements of Earnings

                   For the Years Ended December 31, 2004, 2003 and 2002

                                                          2004          2003       2002
                                                      ------------  -----------  --------
Income:
  Interest income                                     $    17,349       31,262    40,889
                                                      ------------  -----------  --------

Expenses:
  Salaries and employee benefits                            9,515        5,495     9,993
  Loss on sale of securities                                1,902            -         -
  Other operating                                          61,016       76,330    49,927
                                                      ------------  -----------  --------

    Total expenses                                         72,433       81,825    59,920
                                                      ------------  -----------  --------

    Loss before equity in undistributed earnings
      of Bank and income tax benefit                      (55,084)     (50,563)  (19,031)

Equity in undistributed earnings of Bank                  645,709      806,237   645,063

Income tax benefit                                         20,932       19,213     7,232
                                                      ------------  -----------  --------

      Net earnings                                    $   611,557      774,887   633,264
                                                      ============  ===========  ========
</TABLE>


                                       35
<PAGE>
<TABLE>
<CAPTION>
                         DECATUR FIRST BANK GROUP, INC.
                                 AND SUBSIDIARY
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

(17) DECATUR  FIRST  BANK  GROUP,  INC.  (PARENT  COMPANY  ONLY)  FINANCIAL
     INFORMATION, CONTINUED

                                       Statements of Cash Flows

                         For the Years Ended December 31, 2004, 2003 and 2002

                                                                        2004       2003       2002
                                                                     ----------  ---------  ---------
<S>                                                                  <C>         <C>        <C>
Cash flows from operating activities:
  Net earnings                                                       $ 611,557    774,887    633,264
  Adjustments to reconcile net earnings to net cash (used) provided
    by operating activities:
      Equity in undistributed earnings of Bank                        (645,709)  (806,237)  (645,063)
      Provision for stock awards                                         9,515      5,495      9,993
      Loss on sale of securities                                         1,902          -          -
      Change in other assets                                           (17,141)    42,760      5,698
                                                                     ----------  ---------  ---------

          Net cash (used) provided by operating activities             (39,876)    16,905      3,892
                                                                     ----------  ---------  ---------

Cash flows from investing activities:
  Net change in interest-bearing deposits                               98,196     (2,676)  (102,701)
  Investment in Bank                                                  (800,000)         -          -
  Proceeds from sales, maturities and calls of securities
      available-for-sale                                               708,500    400,000    202,219
  Purchase of securities available-for-sale                                  -   (408,396)         -
                                                                     ----------  ---------  ---------

          Net cash provided (used) by investing activities               6,696    (11,072)    99,518
                                                                     ----------  ---------  ---------

Cash flows from financing activities:
  Purchase of treasury stock                                                 -     (1,450)  (107,500)
                                                                     ----------  ---------  ---------

          Net cash used in financing  activities                             -     (1,450)  (107,500)
                                                                     ----------  ---------  ---------

Net change in cash and cash equivalents                                (33,180)     4,383     (4,090)

Cash and cash equivalents at beginning of year                         119,097    114,714    118,804
                                                                     ----------  ---------  ---------

Cash and cash equivalents at end of year                             $  85,917    119,097    114,714
                                                                     ==========  =========  =========
</TABLE>


                                       36
<PAGE>
<TABLE>
<CAPTION>
                                CORPORATE AND SHAREHOLDER INFORMATION
-----------------------------------------------------------------------------------------------------
                                    DECATUR FIRST BANK GROUP, INC.
                                              DIRECTORS
-----------------------------------------------------------------------------------------------------

<S>                                    <C>                             <C>
JOHN L. ADAMS, JR.                     MERRIELL AUTREY                 JAMES A. BASKETT
President & Managing Broker            Retired Banker                  Business Owner
Columbia Asset Mgmt. Corp.                                             Prolific Impressions, Inc.

M. BOBBIE BAILEY                       JOHN WALTER DRAKE               WILLIAM F. FLOYD
Business Owner                         Attorney                        President
Entertainment Resources, Inc.          McCurdy & Candler, LLC          W.F. Floyd Construction., Inc.
  & Bailey Design Co.

ROBERT E. LANIER                       CAROL NICKOLA                   LYNN PASQUALETTI
President                              Chief Nursing Officer           President and Co-Owner
REL Properties, Inc.                   Atlanta Medical Center          HLM Accounting & Tax, Inc.

ROGER K. QUILLEN                       JAMES T. SMITH, III             KIRBY A. THOMPSON
Attorney                               Business Owner                  Vice President
                                       Rutland Contracting Co.         Equifax

JUDY B. TURNER
President and Chief Executive Officer
Decatur First Bank Group, Inc.

-----------------------------------------------------------------------------------------------------
                                         DECATUR FIRST BANK
                                         OFFICERS AND STAFF
-----------------------------------------------------------------------------------------------------
OFFICERS

JUDY B. TURNER                         GREG M. AUTREY                  ANN S. RANDALL
President and Chief Executive Officer  Executive Vice President &      Executive Vice President &
                                       Senior Lender                   Cashier

DAVID E. SENIOR                        JAMIE ENSLEY                    JACK REGAN
Executive Vice President               Vice President/                 Vice President/
Senior Credit Manager                  Commercial Lender               Commercial Lender

KENNETH W. HORNE                       DORIS M. SHELTON                JUANITA MARZETTE
Vice President/                        Assistant Corporate Secretary   Human Resources Coordinator
Credit Analyst

WILBUR (BILL) G. KURTZ, III            LARRY WOMACK                    PAM BRADLEY
Division President                     Vice President                  Retail Manager
Lake Oconee Community Bank             Lake Oconee Community Bank

STAFF

MARIA BERRY                            ANGELA CARTER                   RAY MCDONALD
Assistant Retail Manager               Head Teller                     Operations Specialist

CALE RANDALL                           RON RICE                        MARY JACKSON
Receptionist                           Courier                         Operations Specialist

LISA THOMPSON                          ARLIA SLOTKIN                   DEIDRE WILLIAMS
Teller/Cust Service Specialist         Teller/Cust Service Specialist  Teller/Cust Service Specialist

RENE  WILSON                           TERRI WILLIAMS                  YVONNE REEVES
Loan Administrator                     Loan Administrator              Loan Administrator I

CASSANDRA RUFFIN                       ANTHONY KEMP                    SANDRA WILLIAMS
Teller/Cust Service Specialist         Teller/Cust Service Specialist  Assistant Retail Manager

ORLENE SKEETE                          JESSICA JOHNSON                 BRANDY ODUM
Teller/Cust Service Specialist         Teller/Cust Service Specialist  Teller/Cust Service Specialist

STEPHANIE LEWIS                        ANDREA HOGAN
Teller/Cust Service Specialist         Teller/Cust Service Specialist
</TABLE>