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                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             ----------------------
                                   FORM 10-KSB

(Mark One)

|X|    Annual report pursuant to Section 13 or 15(d) of the Securities
       Exchange Act of 1934

For fiscal year ended December 31, 2001
                      -----------------

|_|    Transition report under Section 13 or 15(d) of the Securities Exchange
       Act of 1934

       For the transition period from_____________to___________

       Commission file number       000-24139
                             ----------------

                       DECATUR FIRST BANK GROUP, INC.
                       ------------------------------
                (Name of Small Business Issuer in Its Charter)

            Georgia                                       58-2254289
----------------------------------------    ------------------------------------
       (State or Other Jurisdiction of      (I.R.S. Employer Identification No.)
       Incorporation or Organization)

       1120 Commerce Drive, Decatur,
       Georgia                                               30030
----------------------------------------    ------------------------------------
       (Address of Principal Executive
        Offices)                                          (Zip Code)

              404-373-1000
----------------------------------------
(Issuer's Telephone Number, Including
Area Code)

Securities registered pursuant to Section 12(b) of the Act:  None.

Securities registered pursuant to Section 12(g) of the Act:  Common Stock,
$5.00 Par Value.

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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or a information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. |_|

State issuer's revenues for its most recent fiscal year:    $ 6,131,017
                                                            -----------

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the stock was
sold, or the average bid and asked prices of such common equity, as of a
specified date within the past 60 days: There is no public trading market for
the Company's common stock. The aggregate market value of the Company's common
stock held by non-affiliates is approximately $8,665,056 based on the last sale
of the Company's common stock known to management, which occurred on March 4,
2002 at $13.50 per share.

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date. 944,198 as of March 18,
2002.

         Transitional Small Business Disclosure format
         (check one): Yes          No  X
                         ----        ---

                       DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the Annual Report to Shareholders for the fiscal year ended
December 31, 2001 are incorporated by reference into Part I and II. Portions of
the Proxy Statement for the Annual Meeting of Shareholders, scheduled to be held
May 2, 2002, are incorporated by reference into Part III.

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                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----
PART I........................................................................1
   ITEM 1.     DESCRIPTION OF BUSINESS........................................1
   ITEM 2.     DESCRIPTION OF PROPERTIES.....................................12
   ITEM 3.     LEGAL PROCEEDINGS.............................................13
   ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...........13

PART II......................................................................13
   ITEM 5.     MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
               STOCKHOLDER MATTERS...........................................13
   ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS...........................13
   ITEM 7.     FINANCIAL STATEMENTS..........................................13
   ITEM 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
               ACCOUNTING AND FINANCIAL DISCLOSURE...........................14

PART III.....................................................................14
   ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
               PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT....14
   ITEM 10.    EXECUTIVE COMPENSATION...... .................................14
   ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
               MANAGEMENT....................................................14
   ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................14
   ITEM 13.    EXHIBITS, LISTS AND REPORTS ON FORM 8-K.......................15

                                       -i-

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                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

                                   THE COMPANY

     The Company was incorporated as a Georgia business corporation on August
2, 1996, and became a bank holding company by acquiring all of the Common Stock
of Decatur First Bank (the "Bank"). The Bank is the only subsidiary of the
Company.

     The Company's principal business is the ownership and management of the
Bank. The Company was organized to facilitate the Bank's ability to serve its
customers' requirements for financial services. The holding company structure
provides flexibility for expansion of the Company's banking business through the
possible acquisition of other financial institutions and the provision of
additional capital to the Bank. For example, we may assist the Bank in
maintaining its required capital ratios by borrowing money and contributing the
proceeds of that debt to the Bank as primary capital.

                                    THE BANK

GENERAL

     The Bank was chartered under the laws of the State of Georgia and began
business in the third quarter of 1997 as a full-service commercial bank. The
Bank offers personal and business checking accounts, interest-bearing checking
accounts, savings accounts and various types of certificates of deposit. The
Bank also offers installment loans, real estate loans, construction loans,
second mortgage loans, commercial and Small Business Administration loans and
home equity lines of credit. In addition, the Bank provides such services as
official bank checks and money orders, Mastercard credit cards, safe deposit
boxes, traveler's checks, bank-by-mail, direct deposit of payroll and Social
Security checks and U.S. Savings Bonds.

PHILOSOPHY

     The philosophy of the Bank's management is to emphasize prompt and
responsive personal service to residents of, and businesses located in, Decatur,
Georgia, as well as other communities located in DeKalb County, in order to
attract customers and acquire market share controlled by other financial
institutions in the Bank's market area. Management believes that the Bank offers
residents of Decatur and surrounding counties the benefits associated with a
locally owned and managed community bank. Management has implemented an active
call program, by which officers and directors promote these efforts by
personally describing the products, services and philosophy of the Bank to both
existing customers and new business prospects. The Bank's directors are active
members in the Decatur community and their continued active community
involvement provides them with an opportunity to promote the Bank and its
products and services.

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MARKET AREA AND COMPETITION

     The Bank is located in Decatur, Georgia. The Bank's primary market area is
defined as the five-mile radius from the center of Decatur, Georgia. Decatur is
the county seat of DeKalb County and is located 12 miles east of downtown
Atlanta, Georgia. The City of Decatur is approximately four square miles in size
and includes over 12 distinct neighborhoods. The Bank competes for deposits and
loan customers with other financial institutions whose resources are equal to or
greater than those available to the Bank and the Company. According to
information provided by the FDIC, as of June 30, 2001, Decatur was serviced by
12 financial institutions with a total of 33 offices in Decatur. As of June 30,
2001, total deposits within Decatur for these institutions were $1.56 billion of
which $69.2 million were held by the Bank. These financial institutions offer
all of the services that the Bank offers. Management believes that the Bank's
local ownership and management as well as its focus on personalized service
helps it to compete with these institutions and to attract deposits and loans in
our market area.

LOAN PORTFOLIO

     Lending Policy. The Bank was established to support Decatur and
surrounding areas of DeKalb County. The Bank aggressively seeks creditworthy
loans within a limited geographic area. The Bank's primary commercial lending
function is to make consumer loans to individuals and commercial loans to small
and medium-sized businesses and professional concerns. In addition, the bank
makes real-estate-related loans, including construction loans for residential
and commercial properties, and primary and secondary mortgage loans for the
acquisition or improvement of personal residences. The Bank avoids
concentrations of loans to a single industry or based on a single type of
collateral.

     The Bank's legal lending limits are 15% of its statutory capital base for
unsecured loans and 25% of its statutory capital base for loans fully secured by
good collateral. The Bank's statutory capital base is the lower of the sum of
its common stock, paid-in capital, appropriated retained earnings, and capital
debt, or the amount of the Bank's net assets. As of December 31, 2001, the
Bank's legal lending limits were approximately $1.2 million for unsecured loans
and approximately $2.0 million for secured loans. While the Bank generally
employs more conservative lending limits, the Board of Directors has discretion
to lend up to the legal lending limits as described above.

     Consumer Loans. The Bank makes consumer loans, consisting primarily of
installment loans to individuals for personal, family and household purposes,
including loans for automobiles, home improvements and investments. Risks
associated with consumer loans include, but are not limited to, fraud,
deteriorated or non-existing collateral, general economic downturn and customer
financial problems.

     Commercial Loans. The Bank's commercial lending is directed principally
toward small to mid-size businesses whose demand for funds falls within the
legal lending limits of the Bank. This category of loans includes loans made to
individual, partnership or corporate borrowers, and obtained for a variety of
business purposes including equipment loans, loans to support working capital
and loans for inventory purchases. Risks associated with these loans can be
significant and include, but are not limited to, fraud, bankruptcy, economic
downturn, deteriorated or non-existing collateral and changes in interest rates.

     Real Estate Loans. The Bank makes and holds real estate loans,
consisting primarily of single-family residential construction loans for
one-to-four unit family structures. The Bank requires a first lien position on
the land associated with the construction project and offers these loans to
professional building contractors and homeowners. Loan disbursements require
on-site inspections to assure the project is on budget and that the loan
proceeds are being used for the construction project and not being diverted to
another project. The loan-to-value ratio for such loans are predominantly 80% of
the lower of the as-built appraised value or project cost, and a maximum of 90%
if the loan is amortized. Loans for construction can present a high degree of
risk to the lender, depending upon, among other things, whether

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the builder can sell the home to a buyer, whether the buyer can obtain permanent
financing, whether the transaction produces income in the interim and the
nature of changing economic conditions.

     Investments. In addition to loans, the Bank makes other investments
primarily in obligations of the United States or obligations guaranteed as to
principal and interest by the United States and other taxable securities. No
investment in any of those instruments exceeds any applicable limitation imposed
by law or regulation.

     Deposits. The Bank offers a wide range of commercial and consumer deposit
accounts, including checking accounts, money market accounts, a variety of
certificates of deposit, and IRA accounts. The Bank employs an aggressive
marketing plan in the overall service area, a broad product line, and
competitive services as its primary means to attract deposits. The primary
sources of deposits are residents of, and businesses and their employees located
in, the Bank's market area. Deposits are obtained through personal solicitation
by the Bank's officers and directors, direct mail solicitations and
advertisements published in the local media. Deposits are generated by offering
a broad array of competitively priced deposit services, including demand
deposits, regular savings accounts, money market deposits (transaction and
investment), certificates of deposit, retirement accounts, and other deposit or
funds transfer services which may be permitted by law or regulation and which
may be offered to remain competitive in the market.

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

                                    EMPLOYEES

     At December 31, 2001, the Company employed 21 full-time employees and two
part-time employees. The Company considers its relationship with its employees
to be excellent.

                           SUPERVISION AND REGULATION

         Both the Company and the Bank are subject to extensive state and
federal banking regulations that impose restrictions on and provide for general
regulatory oversight of their operations. These laws are generally intended to
protect depositors and not shareholders. The following discussion describes the
material elements of the regulatory framework that applies to us.

THE COMPANY

         Since the Company owns all of the capital stock of the Bank, it is a
bank holding company under the federal Bank Holding Company Act of 1956. As a
result, the Company is primarily subject to the supervision, examination, and
reporting requirements of the Bank Holding Company Act and the regulations of
the Federal Reserve.

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

         .  acquiring direct or indirect ownership or control of any voting
            shares of any bank if, after the acquisition, the bank holding
            company will directly or indirectly own or control more than 5% of
            the bank's voting shares;

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         .  acquiring all or substantially all of the assets of any bank; or

         .  merging or consolidating with any other bank holding company.

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

         Under the Bank Holding Company Act, if adequately capitalized and
adequately managed, the Company or any other bank holding company located in
Georgia may purchase a bank located outside of Georgia. Conversely, an
adequately capitalized and adequately managed bank holding company located
outside of Georgia may purchase a bank located inside Georgia. In each case,
however, restrictions may be placed on the acquisition of a bank that has only
been in existence for a limited amount of time or will result in specified
concentrations of deposits.

         For example, Georgia law prohibits a bank holding company from
acquiring control of a financial institution until the target financial
institution has been incorporated for five years. Because the Bank has been
incorporated for more than five years, this limitation does not apply to the
Company or the Bank.

         Change in Bank Control. Subject to various exceptions, the Bank Holding
Company Act and the Change in Bank Control Act, together with related
regulations, require Federal Reserve approval prior to any person or company
acquiring "control" of a bank holding company. Control is conclusively presumed
to exist if an individual or company acquires 25% or more of any class of voting
securities of the bank holding company. Control is rebuttably presumed to exist
if a person or company acquires 10% or more, but less than 25%, of any class of
voting securities and either:

         .  the bank holding company has registered securities under Section 12
            of the Securities Act of 1934; or

         .  no other person owns a greater percentage of that class of voting
            securities immediately after the transaction.

Our common stock is registered under the Securities Exchange Act of 1934. The
regulations provide a procedure for challenge of the rebuttable control
presumption.

         Permitted Activities. Generally, bank holding companies are prohibited
under the Bank Holding Company Act, from engaging in or acquiring direct or
indirect control of more than 5% of the voting shares of any company engaged in
any activity other than:

         .  banking or managing or controlling banks; and

         .  an activity that the Federal Reserve determines to be so closely
            related to banking as to be a proper incident to the business of
            banking.

         Activities that the Federal Reserve has found to be so closely related
to banking as to be a proper incident to the business of banking include:

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         .  factoring accounts receivable;

         .  making, acquiring, brokering or servicing loans and usual related
            activities;

         .  leasing personal or real property;

         .  operating a non-bank depository institution, such as a savings
            association;

         .  trust company functions;

         .  financial and investment advisory activities;

         .  conducting discount securities brokerage activities;

         .  underwriting and dealing in government obligations and money market
            instruments;

         .  providing specified management consulting and counseling activities;

         .  performing selected data processing services and support services;

         .  acting as agent or broker in selling credit life insurance and other
            types of insurance in connection with credit transactions; and

         .  performing selected insurance underwriting activities.

         Despite prior approval, the Federal Reserve may order a bank holding
company or its subsidiaries to terminate any of these activities or to terminate
its ownership or control of any subsidiary when it has reasonable cause to
believe that the bank holding company's continued ownership, activity or control
constitutes a serious risk to the financial safety, soundness, or stability of
it or any of its bank subsidiaries.

         A bank holding company that qualifies and elects to become a financial
holding company is permitted to engage in activities that are financial in
nature or incidental or complementary to financial activity. The Bank Holding
Company Act expressly lists the following activities as financial in nature:

         .  lending, trust and other banking activities;

         .  insuring, guaranteeing, or indemnifying against loss or harm, or
            providing and issuing annuities, and acting as principal, agent,
            or broker for these purposes, in any state;

         .  providing financial, investment, or advisory services;

         .  issuing or selling instruments representing interests in pools of
            assets permissible for a bank to hold directly;

         .  underwriting, dealing in or making a market in securities;

         .  other activities that the Federal Reserve may determine to be so
            closely related to banking or managing or controlling banks as to
            be a proper incident to managing or controlling banks;

         .  foreign activities permitted outside of the United States if the
            Federal Reserve has determined them to be usual in connection with
            banking operations abroad;

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         .  merchant banking through securities or insurance affiliates; and

         .  insurance company portfolio investments.

         To qualify to become a financial holding company, the Bank and any
other depository institution subsidiary of the Company must be well capitalized
and well managed and must have a Community Reinvestment Act rating of at least
satisfactory. Additionally, the Company must file an election with the Federal
Reserve to become a financial holding company and must provide the Federal
Reserve with 30 days' written notice prior to engaging in a permitted financial
activity. Although we are eligible to elect to become a financial holding
company, we currently have no plans to make such an election [confirm].

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

THE BANK

         Since the Bank is a commercial bank chartered under the laws of the
State of Georgia, it is primarily subject to the supervision, examination and
reporting requirements of the FDIC and the Georgia Department of Banking and
Finance. The FDIC and Georgia Department of Banking and Finance regularly
examine the Bank's operations and have the authority to approve or disapprove
mergers, the establishment of branches and similar corporate actions. Both
regulatory agencies have the power to prevent the continuance or development of
unsafe or unsound banking practices or other violations of law. Additionally,
the Bank's deposits are insured by the FDIC to the maximum extent provided by
law. The Bank is also subject to numerous state and federal statutes and
regulations that affect its business, activities and operations.

         Branching. Under current Georgia law, the Bank may open branch offices
throughout Georgia with the prior approval of the Georgia Department of Banking
and Finance. In addition, with prior regulatory approval, the Bank may acquire
branches of existing banks located in Georgia. The Bank and any other national
or state-chartered bank generally may branch across state lines by merging with
banks in other states if allowed by the applicable states' laws. Georgia law,
with limited exceptions, currently permits branching across state lines through
interstate mergers.

         Under the Federal Deposit Insurance Act, states may "opt-in" and allow
out-of-state banks to branch into their state by establishing a new start-up
branch in the state. Currently, Georgia has not opted-in to this provision.
Therefore, interstate merger is the only method through which a bank located
outside of Georgia may branch into Georgia. This provides a limited barrier of
entry into the Georgia banking market, which protects us from an important
segment of potential competition. However, because Georgia has elected not to
opt-in, our ability to establish a new start-up branch in another state may be
limited. Many states that have elected to opt-in have done so on a reciprocal
basis, meaning that an out-of-state bank may establish a new start-up branch
only if their home state has also elected to opt-in. Consequently, until Georgia
changes its election, the only way we will be able to branch into states that
have elected to opt-in on a reciprocal basis will be through interstate merger.

         Prompt Corrective Action. The Federal Deposit Insurance Corporation
Improvement Act of 1991 establishes a system of prompt corrective action to
resolve the problems of undercapitalized financial institutions. Under this
system, the federal banking regulators have established five capital
categories--well capitalized, adequately capitalized, undercapitalized,
significantly undercapitalized and

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critically undercapitalized--in which all institutions are placed. The federal
banking agencies have also specified by regulation the relevant capital levels
for each of the other categories. At December 31, 2001, we qualified for the
"well capitalized" category.

         Federal banking regulators are required to take various mandatory
supervisory actions and are authorized to take other discretionary actions with
respect to institutions in the three undercapitalized categories. The severity
of the action depends upon the capital category in which the institution is
placed. Generally, subject to a narrow exception, the banking regulator must
appoint a receiver or conservator for an institution that is critically
undercapitalized.

         An institution in any of the undercapitalized categories is required to
submit an acceptable capital restoration plan to its appropriate federal banking
agency. A bank holding company must guarantee that a subsidiary depository
institution meets its capital restoration plan, subject to various limitations.
The controlling holding company's obligation to fund a capital restoration plan
is limited to the lesser of 5% of an undercapitalized subsidiary's assets at the
time it became undercapitalized or the amount required to meet regulatory
capital requirements. An undercapitalized institution is also generally
prohibited from increasing its average total assets, making acquisitions,
establishing any branches or engaging in any new line of business, except under
an accepted capital restoration plan or with FDIC approval. The regulations also
establish procedures for downgrading an institution to a lower capital category
based on supervisory factors other than capital.

         FDIC Insurance Assessments. The FDIC has adopted a risk-based
assessment system for insured depository institutions that takes into account
the risks attributable to different categories and concentrations of assets and
liabilities. The system assigns an institution to one of three capital
categories: (1) well capitalized; (2) adequately capitalized; and (3)
undercapitalized. These three categories are substantially similar to the prompt
corrective action categories described above, with the "undercapitalized"
category including institutions that are undercapitalized, significantly
undercapitalized, and critically undercapitalized for prompt corrective action
purposes. The FDIC also assigns an institution to one of three supervisory
subgroups based on a supervisory evaluation that the institution's primary
federal regulator provides to the FDIC and information that the FDIC determines
to be relevant to the institution's financial condition and the risk posed to
the deposit insurance funds. Assessments range from 0 to 27 cents per $100 of
deposits, depending on the institution's capital group and supervisory subgroup.
In addition, the FDIC imposes assessments to help pay off the $780 million in
annual interest payments on the $8 billion Financing Corporation bonds issued in
the late 1980s as part of the government rescue of the thrift industry. This
assessment rate is adjusted quarterly and is set at 1.82 cents per $100 of
deposits for the first quarter of 2002.

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

         Community Reinvestment Act. The Community Reinvestment Act requires
that, in connection with examinations of financial institutions within their
respective jurisdictions, the Federal Reserve or the FDIC shall evaluate the
record of each financial institution in meeting the credit needs of its local
community, including low and moderate-income neighborhoods. These facts are also
considered in evaluating mergers, acquisitions, and applications to open a
branch or facility. Failure to adequately meet these criteria could impose
additional requirements and limitations on the Bank and the Company. Since our
aggregate assets are not more than $250 million, under the Gramm-Leach-Bliley
Act, we are subject to a Community Reinvestment Act examination only once every
60 months if we receive an outstanding rating, once every 48 months if we
receive a satisfactory rating and as needed if our rating is less than
satisfactory. Additionally, we must publicly disclose the terms of various
Community Reinvestment Act-related agreements.

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         Other Regulations. Interest and other charges collected or contracted
for by the Bank are subject to state usury laws and federal laws concerning
interest rates. For example, under the Soldiers' and Sailors' Civil Relief Act
of 1940, a lender is generally prohibited from charging an annual interest rate
in excess of 6% on any obligation for which the borrower is a person on active
duty with the United States military.

         The Bank's loan operations are also subject to federal laws applicable
to credit transactions, such as:

         .  The federal Truth-In-Lending Act, governing disclosures of
            credit terms to consumer borrowers;

         .  The Home Mortgage Disclosure Act of 1975, requiring financial
            institutions to provide information to enable the public and
            public officials to determine whether a financial institution
            is fulfilling its obligation to help meet the housing needs of
            the community it serves;

         .  The Equal Credit Opportunity Act, prohibiting discrimination
            on the basis of race, creed or other prohibited factors in
            extending credit;

         .  The Fair Credit Reporting Act of 1978, governing the use and
            provision of information to credit reporting agencies;

         .  The Fair Debt Collection Act, governing the manner in which
            consumer debts may be collected by collection agencies;

         .  Soldiers' and Sailors' Civil Relief Act of 1940, governing the
            repayment terms of, and property rights underlying, secured
            obligations of persons in military service; and

         .  The rules and regulations of the various federal agencies
            charged with the responsibility of implementing these
            federal laws.

The deposit operations of the Bank are subject to:

         .  The Right to Financial Privacy Act, which imposes a duty to
            maintain confidentiality of consumer financial records and
            prescribes procedures for complying with administrative
            subpoenas of financial records; and

         .  The Electronic Funds Transfer Act and Regulation E issued by
            the Federal Reserve to implement that act, which govern
            automatic deposits to and withdrawals from deposit accounts
            and customers' rights and liabilities arising from the use
            of automated teller machines and other electronic banking
            services.

CAPITAL ADEQUACY

         The Company and the Bank are required to comply with the capital
adequacy standards established by the Federal Reserve, in the case of the
Company, and the FDIC and Georgia Department of Banking and Finance, in the case
of the Bank. The Federal Reserve has established a risk-based and a leverage
measure of capital adequacy for bank holding companies. Since the Company's
consolidated total assets are less than $150 million, under the Federal
Reserve's capital guidelines, our capital adequacy is measured on a bank-only
basis, as opposed to a consolidated basis. The Bank is also subject to
risk-based and leverage capital requirements adopted by the FDIC, which are
substantially similar to those adopted by the Federal Reserve for bank holding
companies.

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

         The minimum guideline for the ratio of total capital to risk-weighted
assets is 8%. Total capital consists of two components, Tier 1 Capital and Tier
2 Capital. Tier 1 Capital generally consists of common shareholders' equity,
minority interests in the equity accounts of consolidated subsidiaries,
qualifying noncumulative perpetual preferred stock, and a limited amount of
qualifying cumulative perpetual preferred stock and trust preferred securities,
less goodwill and other specified intangible assets. Tier 1 Capital must equal
at least 4% of risk-weighted assets. Tier 2 Capital generally consists of
subordinated debt, other preferred stock and hybrid capital and a limited amount
of loan loss reserves. The total amount of Tier 2 Capital is limited to 100% of
Tier 1 Capital. At December 31, 2001 our ratio of total capital to risk-weighted
assets was 17.11% and our ratio of Tier 1 Capital to risk-weighted assets was
16.08%.

         In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio of Tier 1 Capital to average assets, less goodwill and other specified
intangible assets, of 3% for bank holding companies that meet specified
criteria, including having the highest regulatory rating and implementing the
Federal Reserve's risk-based capital measure for market risk. All other bank
holding companies generally are required to maintain a leverage ratio of at
least 4%. At December 31, 2001, our leverage ratio was 10.77%. The guidelines
also provide that bank holding companies experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions substantially
above the minimum supervisory levels without reliance on intangible assets. The
Federal Reserve considers the leverage ratio and other indicators of capital
strength in evaluating proposals for expansion or new activities.

         The Bank and the Company are also both subject to leverage capital
guidelines issued by the Georgia Department of Banking and Finance, which
provide for minimum ratios of Tier 1 capital to total assets. These guidelines
are substantially similar to those adopted by the Federal Reserve in the case of
the Company and those adopted by the FDIC in the case of the Bank.

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

PAYMENT OF DIVIDENDS

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

         If, in the opinion of the federal banking regulator, the Bank were
engaged in or about to engage in an unsafe or unsound practice, the federal
banking regulator could require, after notice and a hearing, that it cease and
desist from its practice. The federal banking agencies have indicated that
paying dividends that deplete a depository institution's capital base to an
inadequate level would be an unsafe and unsound banking practice. Under the
Federal Deposit Insurance Corporation Improvement Act of 1991, a

                                        9

<PAGE>

depository institution may not pay any dividend if payment would cause it to
become undercapitalized or if it already is undercapitalized. Moreover, the
federal agencies have issued policy statements that provide that bank holding
companies and insured banks should generally only pay dividends out of current
operating earnings. See "--Prompt Corrective Action" above.

         The Georgia Department of Banking and Finance also regulates the Bank's
dividend payments and must approve dividend payments that would exceed 50% of
the Bank's net income for the prior year. Our payment of dividends may also be
affected or limited by other factors, such as the requirement to maintain
adequate capital above regulatory guidelines.

         At December 31, 2001, the Bank was able to pay approximately $181,841
in dividends to the Company without prior regulatory approval.

RESTRICTIONS ON TRANSACTIONS WITH AFFILIATES

         The Company and the Bank are subject to the provisions of Section 23A
of the Federal Reserve Act. Section 23A places limits on the amount of:

         .  loans or extensions of credit to affiliates;

         .  investment in affiliates;

         .  the purchase of assets from affiliates, except for real and personal
            property exempted by the Federal Reserve;

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

         .  any guarantee, acceptance or letter of credit issued on behalf of an
            affiliate.

         The total amount of the above transactions is limited in amount, as to
any one affiliate, to 10% of a bank's capital and surplus and, as to all
affiliates combined, to 20% of a bank's capital and surplus. In addition to the
limitation on the amount of these transactions, each of the above transactions
must also meet specified collateral requirements. The Company must also comply
with other provisions designed to avoid the taking of low-quality assets.

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

         The Bank is also subject to restrictions on extensions of credit to its
executive officers, directors, principal shareholders and their related
interests. These extensions of credit (1) must be made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with third parties, and (2) must not involve more
than the normal risk of repayment or present other unfavorable features.

PRIVACY

         Financial institutions are required to disclose their policies for
collecting and protecting confidential information. Customers generally may
prevent financial institutions from sharing nonpublic personal financial
information with nonaffiliated third parties except under narrow circumstances,
such as

                                       10

<PAGE>

the processing of transactions requested by the consumer. Additionally,
financial institutions generally may not disclose consumer account numbers to
any nonaffiliated third party for use in telemarketing, direct mail marketing
or other marketing to consumers.

ANTI-TERRORISM LEGISLATION

         In the wake of the tragic events of September 11/th/, on October 26,
2001, the President signed the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act
of 2001. Under the USA PATRIOT Act, financial institutions are subject to
prohibitions against specified financial transactions and account relationships
as well as enhanced due diligence and "know your customer" standards in their
dealings with foreign financial institutions and foreign customers. For example,
the enhanced due diligence policies, procedures, and controls generally require
financial institutions to take reasonable steps--

         .  to conduct enhanced scrutiny of account relationships to guard
            against money laundering and report any suspicious transaction;

         .  to ascertain the identity of the nominal and beneficial owners of,
            and the source of funds deposited into, each account as needed
            to guard against money laundering and report any suspicious
            transactions;

         .  to ascertain for any foreign bank, the shares of which are not
            publicly traded, the identity of the owners of the foreign bank,
            and the nature and extent of the ownership interest of each such
            owner; and

         .  to ascertain whether any foreign bank provides correspondent
            accounts to other foreign banks and, if so, the identity of
            those foreign banks and related due diligence information.

         Under the USA PATRIOT Act, financial institutions have 180 days from
enactment (or until April 25, 2002) to establish anti-money laundering programs.
The USA PATRIOT Act sets forth minimum standards for these programs, including:

         .  the development of internal policies, procedures, and controls;

         .  the designation of a compliance officer;

         .  an ongoing employee training program; and

         .  an independent audit function to test the programs.

Before the 180-day grace period expires, the Secretary of the Treasury will
prescribe regulations that consider the extent to which these new requirements
are commensurate with the size, location, and activities of financial
institutions subject to the Act.

         In addition, the USA PATRIOT Act authorizes the Secretary of the
Treasury to adopt rules increasing the cooperation and information sharing
between financial institutions, regulators, and law enforcement authorities
regarding individuals, entities and organizations engaged in, or reasonably
suspected based on credible evidence of engaging in, terrorist acts or money
laundering activities. Any financial institution complying with these rules will
not be deemed to have violated the privacy provisions of the Gramm-Leach-Bliley
Act, as discussed above.

                                       11

<PAGE>

PROPOSED LEGISLATION AND REGULATORY ACTION

         New regulations and statutes are regularly proposed that contain
wide-ranging proposals for altering the structures, regulations and competitive
relationships of the nation's financial institutions operating in the United
States. We cannot predict whether or in what form any proposed regulation or
statute will be adopted or the extent to which our business may be affected by
any new regulation or statute.

EFFECT OF GOVERNMENTAL MONETARY POLICES

         Our earnings are affected by domestic economic conditions and the
monetary and fiscal policies of the United States government and its agencies.
The Federal Reserve Bank's monetary policies have had, and are likely to
continue to have, an important impact on the operating results of commercial
banks through its power to implement national monetary policy in order, among
other things, to curb inflation or combat a recession. The monetary policies of
the Federal Reserve affect the levels of bank loans, investments and deposits
through its control over the issuance of United States government securities,
its regulation of the discount rate applicable to member banks and its influence
over reserve requirements to which member banks are subject. We cannot predict
the nature or impact of future changes in monetary and fiscal policies.

                        SELECTED STATISTICAL INFORMATION

     The responses to this section of Item I are included in the Company's
Annual Report to Shareholders under the heading "Selected Statistical
Information," at pages 25 through 30, and are incorporated herein by reference.

ITEM 2.  DESCRIPTION OF PROPERTIES

     The Company and the Bank are located at 1120 Commerce Drive, Decatur,
Georgia. The Company owns this landmark site in the financial district of
downtown Decatur.

     The Company entered into an Agreement to Lease, dated August 20, 1996,
with Daniel B. Pattillo, pursuant to which the Company leased the building from
Mr. Pattillo. The Agreement to Lease provided the Company an option to purchase
the building under certain conditions. On January 7, 2002, the Company exercised
its option to purchase the building at a purchase price of $498,566.

     The building currently contains 9,200 square feet of usable space. Prior
to opening the Bank, the Company renovated the building, and during fiscal year
1999 the Company completed additional renovations to the building. The top floor
contains 6,613 square feet and was converted into the banking lobby and
executive offices. The lower level, which contains 2,587 square feet, is used
for operation offices. Most of the operations and back-room work is outsourced
so less space is needed. Video drive-ups are used instead of physical drive-ups.
The lower parking lot has sufficient room for two drive-up lanes in addition to
employee parking. The property fronts Commerce Drive, which is a main
thoroughfare in Decatur, and backs up to a retail area and residential property.
Access to the drive-ups is available through a side street off of Commerce
Drive. The main parking lot is accessible from Commerce Drive.

     Other than normal real estate lending activities of the Bank, the Company
does not invest in real estate, interests in real estate, real estate mortgages,
or securities of or interests in persons primarily engaged in real estate
activities.

                                       12

<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

      There are no material pending legal proceedings to which the Company is a
party or of which any of its properties are subject; nor are there material
proceedings known to the Company to be contemplated by any governmental
authority; nor are there material proceedings known to the Company, pending or
contemplated, in which any director, officer or affiliate or any principal
security holder of the Company or any associate of any of the foregoing, is a
party or has an interest adverse to the Company.

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

     None.

                                     PART II

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

      The response to this Item is partially included in the Company's Annual
Report to Shareholders at page 1 and is incorporated herein by reference.

         The Company issued no unregistered securities during the fiscal year
ended December 31, 2001.

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

      The response to this Item is included in the Company's Annual Report to
Shareholders under the heading, "Management's Discussion and Analysis of
Financial Condition and Results of Operations," at pages 4 through 7, and is
incorporated herein by reference.

ITEM 7.  FINANCIAL STATEMENTS

      The following financial statements are included in the Company's Annual
Report to Shareholders at pages 8 through 24, and are incorporated herein by
reference.

      Report of Independent Certified Public Accountants

      Consolidated Balance Sheets as of December 31, 2001 and 2000

      Consolidated Statements of Earnings for the years ended December 31,
      2001, 2000 and 1999

      Consolidated Statements of Comprehensive Income for the years ended
      December 31, 2001, 2000 and 1999

      Consolidated Statements of Changes in Shareholders' Equity for the
      years ended December 31, 2001, 2000, and 1999

      Consolidated Statements of Cash Flows for the years ended December 31,
      2001, 2000 and 1999

      Notes to Consolidated Financial Statements

                                       13

<PAGE>

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

         Not Applicable.

                                    PART III

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

     The responses to this Item are included in the Company's Proxy
Statement for the Annual Meeting of Shareholders to be held May 2, 2002, under
the following headings, and are incorporated herein by reference.

     "Proposal One: Election of Directors - Class I Director Nominees, -
     Class II Continuing Directors, and - Class III Continuing Directors,"
     at pages 3 through 4.

     "Executive Officers," at page 5.

     "Section 16(a) Beneficial Ownership Reporting Compliance," at page 10.

ITEM 10. EXECUTIVE COMPENSATION

     The responses to this Item are included in the Company's Proxy
Statement for the Annual Meeting of Shareholders to be held May 2, 2002, under
the heading, "Executive Compensation," at pages 6 through 7, and are
incorporated herein by reference.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The responses to this Item are included in the Company's Proxy
Statement for the Annual Meeting of Shareholders to be held May 2, 2002, under
the headings, "Security Ownership of Certain Beneficial Owners," at pages 8
through 9, and are incorporated herein by reference.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The responses to this Item are included in the Company's Proxy
Statement for the Annual Meeting of Shareholders to be held May 2, 2002, under
the headings, "Related Party Transactions," at page 10, and "Executive
Compensation," at pages 6 through 7, and are incorporated herein by reference.

                                       14

<PAGE>

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

(a)      Exhibits

        Exhibit
        Number             Exhibit
        ------             -------

        3.1         Articles of Incorporation./1//

        3.2         Bylaws/1//

        4.1         Instruments Defining the Rights of Security Holders.  See
                    Articles of Incorporation at Exhibit 3.1 hereto and
                    Bylaws at Exhibit 3.2 hereto.

        10.1        Agreement to Lease, dated August 20, 1996 between Daniel B
                    Pattillo and Decatur First Bank Group, Inc./1//

        10.3*       Employment Agreement, dated as of June 1, 2001 among Decatur
                    First Bank, Decatur First Bank Group, Inc and Judy B.
                    Turner.

        10.4*       1998 Stock Incentive Plan/2//

        10.5        Purchase and Sale Closing Statement, dated January 7, 2002,
                    between Daniel B. Pattillo and Decatur First Bank.

        13.1        Decatur First Bank Group, Inc. 2001 Annual Report to
                    Shareholders. Except with respect to those portions
                    specifically incorporated by reference into this Report,
                    the Company's 2001 Annual Report to Shareholders is not
                    deemed to be filed as part of this Report.

        22.1        Subsidiaries of Decatur First Bank Group, Inc./2//

        24.1        Power of Attorney (appears on the signature pages to this
                    Annual Report on 10-KSB).

(b)      Reports on Form 8-K filed in the fourth quarter of 2001: None.

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

*    Compensatory plan or arrangement.

/1// Incorporated herein by reference to exhibit of same number to the Company's
     Registration Statement on Form SB-2, Registration No. 333-14355, filed
     October 18, 1996.

/2// Incorporated herein by reference to exhibit of same number in the Company's
     Annual Report on Form 10-KSB for the year ended December 31, 1997.

                                       15

<PAGE>

                                   SIGNATURES

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

                              DECATUR FIRST BANK GROUP, INC.

                              By:    /s/ Judy B. Turner
                                     -------------------------------------------
                                     Judy B. Turner
                                     President and Chief
                                     Executive Officer

                              Date:  March 19, 2002

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears on the signature page to this Report constitutes and appoints Judy B.
Turner and Merriell Autrey, Jr., his or her true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him or her and in
his or her name, place, and stead, in any and all capacities, to sign any and
all amendments to this Report, and to file the same, with all exhibits hereto,
and other documents in connection herewith with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as
they might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or their substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.

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

<TABLE>
<CAPTION>
                Signature                                 Title                     Date
                ---------                                 -----                     ----
<S>                                                      <C>                   <C>
/s/ John L. Adams, Jr.                                   Director              March 19, 2002
------------------------------------
John L. Adams, Jr.

/s/ Merriell Autrey, Jr.                                 Director              March 19, 2002
------------------------------------
Merriell Autrey, Jr.

/s/ Mary Bobbie Bailey                                   Director              March 19, 2002
------------------------------------
Mary Bobbie Bailey
</TABLE>

                                       16

<PAGE>

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

/s/ James A. Baskett                                     Director              March 19, 2002
------------------------------------
James A. Baskett

/s/ John Walter Drake                                    Director              March 19, 2002
------------------------------------
John Walter Drake

                                                         Director              March 19, 2002
------------------------------------
William F. Floyd

/s/ Robert E. Lanier                                     Director              March 19, 2002
------------------------------------
Robert E. Lanier

/s/ Carol G. Nickola                                     Director              March 19, 2002
------------------------------------
Carol G. Nickola

/s/ Lynn Pasqualetti                                     Director              March 19, 2002
------------------------------------
Lynn Pasqualetti

/s/ Roger K. Quillen                                     Director              March 19, 2002
------------------------------------
Roger K. Quillen

/s/ James T. Smith, III                                  Director              March 19, 2002
------------------------------------
James T. Smith, III

                                                         Director              March 19, 2002
------------------------------------
Kirby A. Thompson

/s/ Judy B. Turner                          Director, President and            March 19, 2002
------------------------------------
Judy B. Turner                           Chief Executive Officer (Principal
                                        Executive, Financial and Accounting
                                                    Officer)
</TABLE>

                                       17

<PAGE>



                                EXHIBIT INDEX
                                -------------

Exhibit
Number             Exhibit
------             -------

3.1       Articles of Incorporation. /1//

3.2       Bylaws/1//

4.1       Instruments Defining the Rights of Security Holders.  See
          Articles of Incorporation at Exhibit 3.1 hereto and Bylaws at
          Exhibit 3.2 hereto.

10.1      Agreement to Lease, dated August 20, 1996 between Daniel B.
          Pattillo and Decatur First Bank Group, Inc./1//

10.3*     Employment Agreement, dated as of June 1, 2001 among Decatur
          First Bank, Decatur First Bank Group, Inc and Judy B. Turner.

10.4*     1998 Stock Incentive Plan/2//

10.5      Purchase and Sale Closing Statement, dated January 7, 2002,
          between Daniel B. Pattillo and Decatur First Bank.

13.1      Decatur First Bank Group, Inc. 2001 Annual Report to
          Shareholders. Except with respect to those portions specifically
          incorporated by reference into this Report, the Company's 2001
          Annual Report to Shareholders is not deemed to be filed as part
          of this Report.

22.1      Subsidiaries of Decatur First Bank Group, Inc. /2//

24.1      Power of Attorney (appears on the signature pages to this Annual
          Report on 10-KSB).

(c)  Reports on Form 8-K filed in the fourth quarter of 2001: None.
--------------------------------

*     Compensatory plan or arrangement.

/1//  Incorporated herein by reference to exhibit of same number to the
      Company's Registration Statement on Form SB-2, Registration No.
      333-14355, filed October 18, 1996.

/2//  Incorporated herein by reference to exhibit of same number in the
      Company's Annual Report on Form 10-KSB for the year ended December 31,
      1997.